July 1, 2020 – Regulatory Alert

CFPB Regulatory Update

On June 26, 2020 the CFPB issued an alert to consumers which included one alert focused on the debt relief industry. The article the CFPB attached to the alert was called “Coronavirus and dealing with debt: Tips to help ease the impact” to which the CFPB added that “[w]e have resources you can use to address issues related to debt collection during the coronavirus pandemic.”

The article was originally posted on March 20, 2020 at the beginning of the COVID-19 outbreak in the United States but has been updated as of June 17, 2020. In the article the CFPB lays out information for consumers dealing with debt and they discuss options consumers can pursue to help manage their debt appropriately during these stressful times. Included in the information from the CFPB is advice for consumers to contact their lenders directly if they know they will miss payments; what to do if a debt collector contacts you; to consider working with a credit counselor; to be careful when looking into debt relief; to be wary of scams regarding debt relief companies; and to consider legal representation or bankruptcy. 

In the designated sections “Be careful when looking into debt relief” and “Be wary of scams” the CFPB discusses debt settlement companies at length. For more information, and to see what the CFPB specifically advises to consumers who plan on working with debt settlement companies, please click this link: 

https://www.consumerfinance.gov/about-us/blog/coronavirus-and-dealing-debt-tips-help-ease impact/?utm_source=newsletter&utm_medium=email&utm_campaign=wc&utm_term=June2620

North Carolina Regulatory Update

Additionally, on June 26, 2020, the North Carolina Justice Center confirmed via a press release that the North Carolina Senate will refuse to bring the “Debt Modernization Act” to the floor for a vote thus effectively “killing” the Bill. The North Carolina Justice Center were large supporters of the Bill, which they make very clear through their media release, and they seem interested in eventually reviving the Bill, or a bill similar to this one, in the future. The Bill had previously passed the North Carolina House and the Senate Finance, Judiciary, and Rules Committees unopposed, but after weeks of meetings with various government relations and legislative teams, State Senators agreed to table the Bill. Though, since there was such large support for the Bill at the outset, it will be important to continue to keep an eye on the North Carolina State Legislature to see whether a similar bill is introduced in the future. We will be sure to update you if any such new piece of proposed legislation arises. 

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