| Volume 128 Number 5 |
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The People’s Lawyer’s Tip of the Day
Are over-eager salespeople still calling you? Maybe you forget to sign up for the National Do Not Call List. Click here for more.
Court Rules that Consumer Agency Structure is Unconstitional
Yesterday, a federal appeals court ruled that the structure of the Consumer Financial Protection Bureau is unconstitutional. The CFPB has been in the news recently for uncovering the Wells Fargo scandal. The agency is under leadership by one single director loosely accountable to the U.S. president and only removable for good cause. The three judge panel found that this violates constitutional precedents. The decision also overturned a $109 million CFPB enforcement action against a mortgage lender that filed the action. Although the judges denied mortgage lender's demand that the CFPB be shut down, the ruling requires an amendment of the statute that created the agency. The president must have the power to remove the director by will. Noting that the court allowed the agency to continue its oversight functions, the CFPB said the decision "will not dampen our efforts or affect our focus on the mission of the agency.” Click here for more.
Your Money
According to a recent study from Experian, the average new car payment reached $499 per month last quarter. This amount doesn’t include the money consumers pay for auto insurance. Not all car payments are bad. There may be situations where you needed a new car under warranty and saved up a large down payment. Or you planned on buying a new car with cash, but chose financing to secure a 0% APR offer. While each situation is unique, the majority of people don't benefit from a large car payment. When consumers are willing to forgo a new car every year, it becomes much easier to save money and invest. For example, you could increase contributions to your work-sponsored 401(k) account by $415 per month (the $499 car payment – $5,988 per year – minus $1,000 per year for car replacement). Add an additional $415 per month to your SEP IRA or Solo 401(k) if you’re self-employed. Or open a Roth IRA with $415 per month for thirty years. Next time you consider financing a new car, consider whether you could put that money to better use. Click here for more.
For the Lawyers
Filing proof of claim in bankruptcy on a stale debt does not violate FDCPA. The Seventh Circuit, recognizing a split among the circuits, held that filing a proof of claim for a debt barred by limitations does not violate the Fair Debt Collection Practices Act. The court recognized possible harm that could be caused to the consumer and other creditors, but stated, “the risk of this outcome in such cases is not sufficient to support a FDCPA claim in the cases currently before us, where plaintiffs’ attorneys successfully objected to proofs of claim that were neither false nor misleading.” Owens v. LVNV Funding, LLC (7th Cir). Click here for more.