Trump's Bizarro CFPB Wants To Let Debt Collectors Hound You About Money You No Longer Owe

Don't answer any numbers you don't know.

One of the hallmarks of the Trump administration has been turning all of the agencies and bureaus meant to help and protect American citizens into bizarro versions that do the exact opposite of what they were intended to do. The Environmental Protection Agency's purpose now to help destroy the environment, the Secretary of Education is Betsy DeVos, a woman who wants all of our public schools to be replaced by for-profit charter schools, the Labor Department is now anti-labor and pro-management, and so on.

A particularly crushing example of this is what he's done to the Consumer Financial Protection Bureau, which Elizabeth Warren fought so damn hard to establish. Not only does it no longer do what it was supposed to do at all, but in September, Trump and the new CFPB itself went to the Supreme Court and asked them to declare the bureau unconstitutional , claiming that it infringes on the president's executive authority. Arguments will be heard on that case on March 3rd, and strangely enough, Trump's own Department of Justice is asking the Court to rule against him. 

For now, however, the Bizarro Consumer Financial Protection Bureau is trying to do everything it can to erode the rights of consumers in favor of corporations, banks and debt collectors. This week, it proposed a new rule that would allow debt collectors to call people about old bills that they technically no longer owe. Surely, this will be a very popular proposal, given how much people just love getting calls from debt collectors.

In many states, once a debt reaches the statute of limitations — usually over three years — and you haven't made a payment on it, debt collectors lose their right to sue you for it. This changes, however, if you do make a payment on it, effectively resetting the clock. This is called zombie debt.

So! Say you get a call from a debt collector, and they scare you into making a payment on debt you can no longer be sued for. You reset the statute of limitations and can, again, be sued for the whole amount. This can really, really suck for people. Debt collectors make millions of these calls each year, scaring the pants off of people about debts they technically no longer owe.

Rather than banning the practice entirely, as they would if they were still actually a Consumer Financial Protection Bureau, they are allowing it to keep happening, but making a rule that debt collectors have to tell people that their debt has passed the statute of limitations.

This comes, by the way, on the heels of the Bizarro CFPB making a real horrifying new rule last year that debt collectors can call up to seven times a week and send unlimited texts and emails.

 Via   the Washington Post :  

Those proposed rules, which haven't been finalized, have received more than 14,000 public comments, many of which raised the issue of zombie debt. One Oregon man wrote that he had settled a 10-year-old medical bill he received for an MRI his son needed after a fall during a gymnastics tournament but was still getting phone calls.

But consumer advocates say the CFPB proposals don't go far enough in protecting consumers.

It is "disappointing," said Linda Jun, senior policy counsel for Americans for Financial Reform. The CFPB should bar the collection of debts that have passed their statute of limitations altogether, he said.

"The whole point of statute of limitations is that the government has decided that the debt is no longer collectible," Jun said. "If you can't be sued on it, why are you getting mail on it?"

Yeah. It's not good.

People need to be better aware of their rights in general when it comes to debt, but also of rights they don't have. Recently, I encountered, in the wild, a Trumpster who really loved The Spin Doctors and hated the idea of Medicare For All and would not stop talking loudly about both of those things to anyone who would listen, while sitting by himself at the bar. His opposition to it was twofold. (Not sure if his love for The Spin Doctors was also twofold.) Number one, he didn't think it was fair for his money to go to cover other people's medical care (which, for the record, is also how regular health insurance works) and that everyone should be responsible for themselves. Number two, when he got hit by a car while riding his bike, he got a completely insane hospital bill and just didn't pay it (this also means that other people will have to pay for your medical care). He insisted to me, over and over again, that everyone could just do that and it would be fine, because legally, hospitals cannot sue you for medical debt. This, I hope everyone knows, is definitely not true. 

In fact, because medical bills are so astronomically high now due to high deductibles and co-pays, more and more hospitals are suing patients to collect debt, and then the debt they can't collect means they have to increase prices all around to get that money from people who can pay, and everything will just get more and more horrifying, on into infinity, until we finally get it together to do something about it.

[ Washington Post ]

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