Ayanna Pressley says the Consumer Financial Protection Bureau is not doing what it was set up to do.
The federal watchdog — conceived by Sen. Elizabeth Warren, a fellow Massachusetts Democrat, to protect consumers from exploitation by financial companies — has increasingly rolled back regulations and enforcement under the control of President Donald Trump’s administration. And in May, the agency proposed a rule that Pressley’s office says opens the door to abusive debt collection, the practice in which third-party companies are paid by other businesses to pursue overdue payments, from rent to electric bills, from consumers.
It’s an issue she says her family knows too well.
“My mother took pride in paying her bills on time, but after several life-disrupting events, there came a point where she no longer could afford it,” Pressley said in a statement Friday.
Last month, the Massachusetts congresswoman shared during a Capitol Hill hearing how her mother became trapped in an endless cycle of work, after a major surgery and the unexpected death of her own mother resulted in the family falling behind on bills.
“No matter how hard she worked, we owed everybody — the utility company, the landlord, the bank, the car company — and we were frequently harassed by debt collectors,” Pressley said Friday.
From an early age, she said she learned to manage “heavy-handed knocks” at their apartment door and debt collector calls. Pressley says she also internalized feelings of “fear, vulnerability, judgement, and shame” from her mother. While they ultimately were able to escape the cycle through her mother working multiple jobs, Pressley believes her mother, who died in 2011 at the age of 63, “worked her way to a premature death.”
Pressley says their story is not unique and, on Friday, introduced a bill to “curb the aggressive tactics and psychological harassment that debt collectors are all too quick to employ.” In response to the CFPB’s recently proposed rule, The Monitoring and Curbing Abusive Debt Collection Practices Act would specifically prohibit the agency’s director issuing rules allowing debt collectors to send unlimited email and text messages to consumers.
In May, the CFPB disputed reports that the rule would allow debt collectors to engage in such practices. While the proposal clarifies that “newer communication technologies, such as emails and text messages, may be used in debt collection,” it also says companies would have to give consumers an option to unsubscribe from future messages. The rule also prohibits collection practices that constitute harassment and holds companies liable if they are found to have intentionally violated the law.
CFPB Director Kathy Kraninger says the proposal — for which the public comment period closed last month — “moves to modernize the legal regime for debt collection.”
Still, without clear limits on the number of emails and texts that debt collectors can send or consumer consent requirements, Pressley and other House Democrats say the rule will “fail to constrain collectors’ harmful behaviors in any meaningful way — and may make them worse.” Concerns have also been raised about a part of the rule that would require consumers to click on hyperlinks in unfamiliar emails, something most savvy internet users have been taught against.
“The Bureau’s decision to implement rules that will weaken or eliminate existing protections is wrong,” more than 60 members of Congress wrote to Kraninger last month.
Pressley worries the proposed rule could further contribute to the phenomenon known as debt despair, in which individuals are overcome by hopelessness and shame. In Massachusetts, communities of color could be disproportionately impacted; according to the National Consumer Law Center, 18 percent of Bay State residents living in predominantly white areas have debt in collections, compared to 46 percent of those living in predominantly nonwhite areas.
According to Pressley’s office, more than 62,000 Americans have submitted unfair debt collection complaints to the CFPB since the beginning of the Trump administration. And in 2018 alone, the agency received 81,500 complaints about debt collection, while the Federal Trade Commission received 483,200 complaints on the subject, according to government data. As a category, debt collection was the second-biggest source of FTC complaints, behind only imposter scams and ahead of identity theft.
Pressley’s bill would also require the CFPB to issue quarterly reports on both debt collection-related complaints and any enforcement actions taken during the previous year, amid worries from consumer advocacy groups that the agency is neglecting its responsibilities under Trump’s control.
According to a report in March by the Consumer Federation of America, the CFPB’s overall enforcement activity had dropped 80 percent from its “peak productivity” in 2015 and the monetary relief that the agency provides had dropped 96 percent. The report found that, since Trump’s appointees took control of the CFPB, consumers had filed more than 27,512 complaints claiming that debt collectors were attempting to collect debts that they did not owe — and more than 30,000 other complaints related to debt collectors’ tactics.
According to the report, the Trump administration had announced just one case enforcing the Fair Debt Collection Practices Act, the law protecting consumers from abusive debt collection practices, and awarded no monetary relief in the case. Under the previous director, Richard Cordray, who was appointed by President Barack Obama, the CFPB took action on 20 FDCPA cases and returned an average of $39 million in consumer restitution per case, the report said.