Same day loan industry stands against rogue debt collectors
The Community Financial Services Association of America (CFSA), a national organization dedicated to the promotion of responsible regulation of the personal loans industry, has issued a press release that denounces aggressive debt collection practices that violate consumer rights, reports the Wall Street Journal. According to the newspaper, more than 5,000 arrest warrants were issued against defaulted borrowers last year in more than a third of U.S. states. The CFSA is lobbying to eliminate this legal practice as used by rogue debt collectors, which the organization considers an affront to consumers in dire financial straits.
The industry stands up for same day loan customers
CFSA board chair D. Lynn DeVault envisions a U.S. same day loans industry that will stand together to put unscrupulous debt collectors out of business.
“It is simply wrong to pursue criminal complaints against consumers who have defaulted on personal debt,” said DeVault. “Lenders should be working with their customers to figure out a solution. Our members offer borrowers an extended payment plan at no extra cost to the borrower and adhere to CFSA Best Practices, which prohibit any criminal recourse.”
A key provision of the CFSA’s Best Practices is that no member personal loans company will threaten borrowers or pursue criminal action against them in relation to a customer’s check or account going unpaid.
“We stand ready to work with regulators and policymakers to block rogue lenders and debt collectors from pursuing criminal complaints,” said DeVault.
Washington State House bill requires debt collectors to provide proof
In early March, the Washington state House of Representatives unanimously passed a bill that would require debt collectors to provide indisputable proof that a borrower has been notified of a potential lawsuit before an arrest warrant can be issued. The bill is expected to pass the state Senate and meet the approval of Gov. Christine Gregoire. A trade group representing debt collectors has also come out in support of the legislation in light of the fact that some rogue debt collectors have abused existing laws.
Nationally, the Federal Trade Commission is currently investigating aggressive debt collection practices.