Harshbarger, who supports the DA programs, has no such reluctance, saying he believes they should be licensed by the state. “Of course I do,” he said. “I think it is appropriate there . . . be responsible state regulation and oversight.’’
After a strong lobbying effort by proponents of the bad-check programs, and despite the opposition of prominent consumer advocacy organizations such as Public Citizen and the National Consumer Law Center, an exemption was added to the federal law for debt-collections companies working on behalf of district attorneys.
Former US representative Barney Frank, who was on the House Financial Services Committee at the time, supported the exemption because, he said, he was sold on the notion that the program would allow people to avoid a criminal record, and the National District Attorneys Association lobbied hard for the exemption. ProPublica reported that Corrective Solutions also fought for the exemption, spending over $660,000 lobbying Congress.
That exemption, however, is contingent upon the programs meeting certain criteria. The companies must not be able to decide which people likely violated the law and which cases should be pursued. This function, known as prosecutorial discretion, is deemed to be the role of the district attorney.
But in Massachusetts, most bad-check cases were not prescreened by the district attorneys.
Stewart, the Suffolk County assistant district attorney, conceded that he reviewed only 20 to 30 percent of the cases at various stages after merchants submitted them to Corrective Solutions. Bristol County reported that it reviewed “some of the individual cases,” but did not provide data. The Northwestern district attorney’s office says it did an “initial review” of each case for probable cause, but also did not provide data. The other district attorneys did not respond to a request for information about prescreening.
These types of bad-check programs may be poised to face increasing scrutiny.
There are many who believe that the newly formed federal Consumer Protection Finance Bureau should take a look at them. “This is the very sort of thing that the agency was created to deal with,” said Deepak Gupta, a former attorney with Public Citizen in Washington, D.C., where he was director of the Consumer Justice Project.
Cohen of Greater Boston Legal Services is concerned about the legislation the district attorneys will be filing. “If they continue the programs in their current form, we would, on behalf of low-income consumers, strongly oppose the legislation,” she said. “And if we have clients who were harmed by past behavior we would consider seeking redress.”
Colman Herman can be reached at Colman@verizon.net