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Dalié Jiménez
New England
Law professor @UCILaw, formerly @CFPB. I write about debt collection, debt settlement, bankruptcy, student loan, and credit reporting issues.
Recent Activity
On Friday, January 4 from 10:30-12:15 pm, the section on Commercial & Related Consumer Law and the section on Creditors’ and Debtors’ Rights are hosting a joint panel at the 2019 AALS Annual Meeting in New Orleans. We are also... Continue reading
Posted May 6, 2018 at Credit Slips
Great idea Jeff! Would love to hear what everyone else has to say (and thanks for including me). I made a list on Twitter that has most of the consumer law people I follow. Anyone can subscribe and/or pick and choose who to follow from the list here: https://twitter.com/daliejimenez/lists/consumer-law-tweeters
I'm trying something new this year. My consumer bankruptcy policy seminar students will read many great articles by many wonderful academics on this blog, as well as others, but this year, their "reading" will also include a great deal of... Continue reading
Posted Aug 22, 2016 at Credit Slips
Are tuition payments for an adult child's education, while the parents are insolvent, constructively fraudulent? As the WSJ reported this week, Bankruptcy Judge Hoffman (D. Mass.) recently held that they are not. But other courts have disagreed. In fact, there... Continue reading
Posted Aug 13, 2016 at Credit Slips
For the past four years, Jim Greiner, Lois Lupica, and I have been working on the Financial Distress Research Project (FDRP)*, a large randomized control trial trying to find out what works to help individuals in financial distress. As part... Continue reading
Posted Aug 1, 2016 at Credit Slips
If the financing is attractive enough (relative to what looks like would be recovered without it), those who opt out might be liable to their shareholders (or partners, etc.) for rejecting this deal.
Toggle Commented Mar 3, 2016 on PR: Let's start with financing... at Credit Slips
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On Friday, Tara Siegel Bernard reported in the New York Times that some bankruptcy judges think that the onerous Brunner standard for discharging student loans should change. Commenting on the article, reader "alma" writes: As someone who recently filed for... Continue reading
Posted Jul 20, 2015 at Credit Slips
Great point, Ken. Going even further, if we assume a more reasonable work-life of 4 weeks of vacation/holidays/sick days per year and 5 days of work per week with 9 hours of billables per day (2160 hours per year), the numbers are even more stark: 1,438 complaints per week, 287 per day, 32 per hour, or 1 every minute. This starts to look a lot like the Bock v. Pressler & Pressler case in New Jersey where the judge looked at the attorney's review of a particular case and found that it was only 4 seconds long. That attorney reviewed on average 300-400 cases per day (but much more on that day). The court said: "The case law is sparse, and it is possible for reasonable people to disagree as to what constitutes reasonable attorney review. But whatever reasonable attorney review may be, a four-second scan is not it." See: http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/2:2011cv07593/268761/59/
Toggle Commented Jul 16, 2015 on Big Win for CFPB on Debt Collection at Credit Slips
Yesterday, Judge Amy Totenberg of the Northern District of Georgia issued a very cogent 70-page opinion in the case of the CFPB v. Frederick Hanna & Associates, a large collection law firm with offices in Georgia, Florida, and South Carolina.... Continue reading
Posted Jul 15, 2015 at Credit Slips
The court actually went further on opt-out clauses, Jeff. One plaintiff was only bound by a subsequent (2014) agreement, which provided a much more reasonable opportunity to opt-out (incidentally, one designed by another court in a different case). In examining that agreement, the court cited a 2007 California Supreme Court decision (Gentry) and found that the 2014 agreement was procedurally unconscionable because the explanation of benefits of arbitration was "markedly one-sided" and because it wasn't clear that someone in the plaintiff's position would have felt free to opt out. In the court's words: ".. with respect to the delegation clause, the first portion of the Gentry test is met because the 2014 agreements utterly failed to notify drivers of a specific drawback presented by the delegation clause – namely, that drivers may be required to pay considerable forum fees to arbitrate arbitrability, whereas they would not be required to pay such fees if they opted-out of arbitration (and thus the delegation clause) ... like the employee in Gentry, Uber drivers here could reasonably assume that Uber prefers arbitration because 'arbitration was the default dispute resolution procedure from which the employee had to opt out.' ... Ultimately, while acknowledging that it is an extremely close question, the Court concludes that the second element of the Gentry test is met. Consequently, the Court finds that despite the conspicuous opt-out provisions in the 2014 agreements, the Court cannot conclude that the 2014 delegation clauses are without procedural unconscionability altogether; Mohamed’s ability to opt-out of the delegation clause was not sufficiently meaningful to eliminate all oppression from the contract."
Should liability under the Fair Debt Collection Practices Act (FDCPA) lie against a creditor who submits a proof of claim past the statute of limitations in a consumer bankruptcy case? That is the question the Supreme Court declined to review... Continue reading
Posted May 7, 2015 at Credit Slips
I'd be curious to see what your attorneys said about Q&A sites like Avvo and LawGuru. I've heard some consumer attorney (consumer law, not bankruptcy per se) talking about using those to get "their name out there" as well as to increase their "ratings" on some sites (like Avvo).
Adam, I see a couple of unfair/deceptive issues. First, in the credit report itself, if creditor reports a debt as "Charged-Off" when they know it's been included in the bankruptcy I think there's a good argument you are misleading the debtor and anyone who reads that credit report. That seems to also come within the "unfairness" definition in Dodd-Frank. I disagree that the furnishers do not know how the information will show up on the credit report: that is exactly what the METRO 2 format does. It is the creditor who chooses to report "charged-off" or "in bankruptcy." The credit bureau (per the METRO 2 standard) just displays that (in different formats depending on the end user but with the same substantive information). They should know exactly what will happen here. The hardest task the plaintiffs are going to have to prove here is the pattern-and-practice. Even in their own production of the plaintiff's credit score they showed two GE cards, one reported as "Charged-off" and the other as "in bankruptcy." (Maybe she paid one? Unclear). So maybe it's just carelessness? Or it's a P&P that wasn't well executed? From my own review of a small number of bankrupt credit reports, I have seen this happen a number of times after a bankruptcy. If there is a P&P, the violation of the discharge injunction should turn on what the court thinks was the creditor's intent/purpose in implementing this practice. What is the purpose of not reporting the most accurate information on the credit report? (and violating the FCRA's requirement of having "reasonable procedures to ensure maximum possible accuracy"?). There's no private right of action under the FCRA but I don't see why the bankruptcy court can't take the FCRA violation (and contractual violation with the credit bureaus) into account when trying to figure out the purpose. The second deceptive issue has to do with what the creditor is telling the consumer will happen when they pay the bill. Are they saying they will remove the item? that the debt buyer will also remove it? This seems like another contractual violations (the credit bureaus and CDIA should be very upset if that's happening systematically). If they don't remove it, are they saying that the credit score will improve? The CFPB has warned collectors that making statements about what will happen to a consumer's credit score when they pay a debt may be deceptive (http://files.consumerfinance.gov/f/201307_cfpb_bulletin_collections-consumer-credit.pdf). Finally, I want to dig in more, because the plaintiffs seem to be alleging that the contracts between the creditors and debt buyers allude indirectly to this nefarious intent. The documents GE filed in court actually included one of the contracts (bringing my database of these contracts to 86, http://dalie.org/contracts/). I haven't had a chance to dig into it yet though.
Last week, Adam pointed us to a NYT's story on "zombie debt" after bankruptcy. I did a bit more research into the story because I had a hard time understanding the problem from the article. There are a few lawsuits... Continue reading
Posted Nov 18, 2014 at Credit Slips
I think we crashed the site: NHTSA is experiencing intermittent network issues that are making some functions on SaferCar.gov temporarily unavailable. These include our recall search by the VIN look-up tool, searching for complaints and recalls, and filing a complaint. We apologize for the inconvenience and encourage you to try back later. I hope they fix it soon.
Adam - take a look at the video game version of the NYT piece (which is actually an excerpt from a forthcoming book). I linked to it in the post just below. I agree with you that these are all big issues, and there are more too (like although I do see debt registries becoming a bigger deal. There are at least two companies that have been playing in this space for a while: Global Debt Registry, which the NYT mentions, and Convoke Systems. They market themselves as not providing conclusive legal evidence of anything other than (perhaps) evidence of the chain-of-title of an account. The idea is that one of their representatives can talk about how, say, Chase is their client and as part of a transaction where Chase sold 10k accounts to Midland, they deposited account documents and other evidence (the contract, etc.) with the registry system. They then kept these records and can produce a witness who can say that these are (now) their business records which they have "incorporated/adopted" into their systems. The incorporation doctrine is not universal, but a number of courts have either adopted it explicitly, or seem to when they allow debt buyers to prove that they own an account with an affidavit from their own representative. There are tons of problems with this, least of which is that it's completely unclear where the incorporation doctrine stops. It started as a way to let in evidence about business records acquired in a merger, but when you're talking about a select group of records of a company that still continues things get murky. Peter Holland (consumer lawyer who also used to run the UMaryland debt collection clinic) has a hilarious example pointing out the absurdity of the doctrine. As law professors, we might say we're in the business of downloading documents and papers from the internet, and then incorporating them into our own records to examine/process etc. That's really a big part of our "business." Well, one day, while investigating some legal issue around what would happen if President Obama was actually born in Kenya, I downloaded from the internet a copy of Obama's Kenyan birth certificate. I incorporated into my records (saved it on my computer) and I am now ready to sign an affidavit saying that I have records that say that Barack Obama was born in Kenya because (paraphrasing from one of many debt buyer affidavits): I am a custodian of records, this record was kept in the regular course of business, and it was the regular course of business for me to make these types of records, etc. Anyway, it's a bit absurd but these kinds of affidavits are filed in courts every day and most of the time are deemed sufficient (not saying anyone reads them, but they carry the day). The debt registry might actually be *slightly* different in that it would seem more reliable (maybe) than the way the incorporation doctrine is currently being used (by debt buyers' agents testifying as to their own records). At *least* we'd have some kind of certification from the bank to the registry. But that doesn't speak at ALL about data accuracy (though I fear that courts would take it as if it does, because, "bank records are inherently reliable" some courts have said). And the issue with accuracy and integrity of the data is that we have all these systems (even within the banks sometimes) that don't talk to each other. And when you add multiple debt buyers and debt collectors hired by debt buyers you're really in trouble if everyone is using their own "system of record" (and I put it in quotes because it's not a given that everyone has the data management capability to run a proper system of record that is *the* authoritative source of information). So why do I think there'll be more use of registries? Because the OCC has already told banks they better start giving account documents when they sell debts, and the CFPB is likely headed in that direction with draft rules later this year, and I think there'll be a number of buyers who will be happy to outsource the data management part. If the CFPB holds the banks to a higher standard than the OCC has indicated it would, then even banks would have an incentive to use a registry so that they can have only one vendor to really deal with.
Toggle Commented Aug 17, 2014 on A National Debt Registry? at Credit Slips
I'd also recommend trying out the web-based (text and images) "video game" based on the book. You can play as a debtor or a debt collector: http://fusion.net/justice/story/bad-papers-prelim-941107#launch
That's the name of a new book by Jake Halpern coming out in October. The New York Times has an excerpt on their site. If the excerpt is anything like the book, it's going to be gripping. What's even cooler... Continue reading
Posted Aug 15, 2014 at Credit Slips
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This week the CFPB announced it's seeking public comments on a proposed policy that would allow consumers who file a complaint with the agency to share all of the (non-personally identifying) details of that complaint with the public as part... Continue reading
Posted Jul 18, 2014 at Credit Slips
General Mills decided to reverse direction on its recent change to its terms of service purporting to mandate arbitration and ban class actions for anyone who 'liked' them (among other things). Perhaps they were threatened by Adam Levitin's counter-proposal, or... Continue reading
Posted Apr 20, 2014 at Credit Slips
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I had the pleasure of participating in this weekend's very successful Research Symposium on Student Loans organized by Kathleen Engel of Suffolk Law School and Deanne Loonin of the National Consumer Law Center (NCLC) (NCLC, by the way, is looking... Continue reading
Posted Apr 15, 2014 at Credit Slips
Today is your last chance to comment on the CFPB's Advanced Notice of Proposed Rulemaking on Regulation F, regarding debt collection. I had the pleasure of working with Pat McCoy on a joint comment to the ANPR. Our comment addresses... Continue reading
Posted Feb 28, 2014 at Credit Slips
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CapOne's taken a lot of flack today over its apparent desire to check what's in your wallet by visiting you at home and at work. The LA Times story got even bigger when it made it to Twitter and great... Continue reading
Posted Feb 18, 2014 at Credit Slips
Raymond - There will always be people who get in over their heads or have their life situations change and suddenly they are unable to pay their bills. I firmly believe most people want to repay their obligations and most collectors I've talked to agree. However, sometimes they just don't have the money. If you are barely scraping by rate adjustments aren't going to help you. I do agree that consumers who are not in the most dire circumstances (have some money to repay) and who have the wherewithal to help themselves and negotiate with their creditors will be able to get great deals. But this assumes that they have income to put towards their debt and that they overcome the shame/embarrassment/anxiety that is associated with having failed to pay in the first place. Those feelings are real for a lot of people and I think they explain why some people avoid talking to collectors or showing up in court when they are sued.
SYSM - I definitely encourage you to make a comment to the CFPB either formally or through regulationroom.org (those comments get aggregated by Cornell students and submitted on the public record). Below are some of the questions the CFPB asked that you might want to specifically comment on. They relate to your experiences in litigation and to the documentation debt buyers/collectors have available: http://regulationroom.org/rules/consumer-debt-collection-practices/discussion/debt-collection-litigation#nid-189 http://regulationroom.org/rules/consumer-debt-collection-practices/discussion/making-sure-debt-collectors-buyers-have-info#nid-131