All posts in Current Events

By Danielle Douglas 

http://www.washingtonpost.com/business/economy/cfpb-proposes-new-rule-to-govern-debt-collectors/2013/11/05/ef920b86-462a-11e3-bf0c-cebf37c6f484_story.html?hpid=z5

The government is preparing restrictions on debt collectors, a loosely regulated industry under increasing scrutiny over complaints of abusive tactics.

On Wednesday, the Consumer Financial Protection Bureau is slated to issue a notice of proposed rulemaking to modernize the legal framework governing debt collection. The government watchdog is seeking public and business comment before formally proposing the rules, which are expected to be finalized by next year.

The bureau is asking Americans whether creditors and collection agencies are providing accurate information about their outstanding debts. It also wants to know whether people are receiving threatening calls at all hours of the night or being dragged into court for money they do not owe.

“Collection of consumer debts serves an important role in the proper functioning of consumer credit markets,” CFPB Director Richard Cordray said Tuesday on a call with reporters. “But certain debt collection practices have long been a source of frustration for many consumers.”

Cordray noted that since the bureau began accepting debt collection complaints in July, it has received about 5,000 consumer grievances. The most-common complaints involve harassing phone calls, lack of verification of the debt and people becoming aware of a collection account only through their credit report.

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FOR IMMEDIATE RELEASE:
August 28, 2013

CONSUMER FINANCIAL PROTECTION BUREAU LAUNCHES TOOLKIT TO HELP TEACHERS AND OTHER PUBLIC SERVANTS TACKLE STUDENT DEBT
One in Four American Workers May Be Eligible For Student Debt Forgiveness

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) launched a toolkit to empower school districts and other public service organizations to help their employees pay off student loan debt. The CFPB is asking these employers to make a pledge to inform their employees of their options. Up to a quarter of the U.S. workforce is in public service and may be eligible for existing student loan debt forgiveness programs, according to a CFPB report also released today.

“Our young people should not be mired in debt because they stir themselves to the call of public service. They deserve to know all their options,” said CFPB Director Richard Cordray. “Our toolkit and pledge can be a win-win for employers, the public they serve, and their employees who are facing student debt loads that are imposing unprecedented burdens upon this generation.”

According to a report released today, the CFPB estimates that more than 25 percent of the U.S. labor force is in public service. This includes teachers, librarians, firefighters, military personnel, law enforcement, first responders, nurses, and social workers. There are a number of special loan programs to assist these workers. For example, in 2007, Congress created the Public Service Loan Forgiveness program for public servants who pay their federal loans on time for ten years. People working at a nonprofit or those working for a federal, state, or local government are eligible for the program.

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By Martha Neil

From http://www.abajournal.com

Although Detroit is short of money to run the city, its Chapter 9 bankruptcy filing is expected to ring up business for multiple law firms.

Jones Day is representing the city, and bondholders, creditors, insurers, pension funds and retirees are expected to lawyer up, too, as big-bucks issues, such as responsibility for repaying some $8 billion in bond debt owed by Detroit, as well as another $5.7 billion in unfunded health care and retirement benefits to former workers, are negotiated, Reuters reports.

Opportunities for lucrative legal work abound. The Detroit Institute of Arts, for instance, retained partner Richard Levin of Cravath Swaine & Moore to represent its museum in a dispute over the city’s power, or lack thereof, to sell the museum’s art collection.

And Arent Fox, Kirkland & Ellis, Sidley Austin, Weil Gotshal & Manges and Winston & Strawn are also among the law firms either already hired or thought to be in the pipeline to represent entities caught up in the municipal maelstrom.

Already at issue is whether the state governor had the power to file for bankruptcy, under the Michigan state constitution, when doing so puts protected retirement benefits for public workers at risk. A state-court judge last week ordered the city’s emergency manager to withdraw the bankruptcy petition he filed on Thursday; however, the state attorney general has filed an appeal of that order, recounts another Reuters article.

Observers say they expect the bankruptcy judge to put the state-court case on pause, so that the city’s eligibility to file for bankruptcy can be dealt with in federal court. Also likely to be contested is whether Detroit made sufficient efforts to negotiate with creditors before filing.