Walter Zalenski Quoted in Law360 Article, "CFPB's Debt Collection Push Will Force Changes at Banks"Walter E. Zalenski
Walter Zalenski was quoted in Evan Weinberger's Law360 article, "CFPB's Debt Collection Push Will Force Changes at Banks," on Thursday, July 28, 2016.
But even though banks won't be directly affected by the CFPB's outlined proposals, they are likely to feel at least a pinch, said Walter Zalenski, a partner at Buckley Sandler LLP.
"We're not losing sight of the fact that the ultimate impact falls directly on creditors," he said.
And even though there is no direct liability for banks for problems at debt collectors once they sell off debt under the FDCPA, the CFPB's power to bring enforcement actions for unfair, deceptive or abusive acts or practices, which Congress granted in the 2010 Dodd-Frank Act, means that banks could still be on the hook for bad data, Zalenski added.
"The overlay in recent years, emanating from the prudential regulators as well as the CFPB, is that the degree of vendor management supervision that is now expected of creditors raises concerns regarding whether creditors can maintain the requisite distance to preclude direct civil liability for FDCPA violations by third-party debt collectors," he said.
And because of that, any celebration at banks over being left out of the CFPB's existing outline for new debt collection rules is likely to be short-lived.
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