To All SLG Clients and Affiliates.
From: Spencer Scheer
Date: October 18, 2016
Client Alert: From the Scheer Law Group:
Subject: CFPB Consent Order with Navy Federal Credit Union is a “Shot across the Bow” for Collection Managers.
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Under a “Consent Order filed by the CFPB on October 11, 2016, the CFPB required Navy Federal Credit Union to pay $28.5 Million dollars in compensation and fines .This was based on findings of unfair debt collection practices, including findings that the NFCU:
Credit Unions are allowed statutory liens and a right of offset under both state and federal law. Using this remedy in conjunction with denying a member electronic access to accounts can be a recipe for disaster, when undertaken in conjunction with questionable collection practices.
While, the CFPB does not directly regulate “smaller credit unions” state regulators will likely take a cue from the CFPB. Every credit union Collections Manager or Loan Service Manager should review the Order and the practices found to be deceptive or abusive, and the CFPB analysis of what training or reprimands should occur.
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