While some lawmakers on Capitol Hill continue to work toward a major restructuring or perhaps even a complete dismantling of the Consumer Financial Protection Bureau, one of the leaders of the American Recovery Association cautioned the industry about developments this summer in Pennsylvania by the attorney general to establish a division similar to this federal agency.
In fact, the individual appointed to lead this unit within the Keystone State’s attorney general’s office actually was the fourth employee ever to come aboard at the CFPB.
To recap, back in July, Pennsylvania attorney general Josh Shapiro created what he called a consumer financial protection unit. Leading this operation is Nicholas Smyth, who before joining the CFPB was part of a team at the U.S. Treasury Department that drafted and revised the CFPB’s enabling act, the Consumer Financial Protection Act of 2010 (Title X of the Dodd-Frank Act).
Smyth brings significant expertise in auto finance to this post in Pennsylvania. At the CFPB, Smyth led the investigation of Drivetime Automotive Group, which resulted in an $8 million settlement related to allegations associated with what the bureau deemed to be harassing debt collection calls and providing inaccurate credit information to credit reporting agencies.
“Protecting the public from financial scams is a key priority of mine, and Nick Smyth will help us expand our capacity to bring complex cases against financial companies that try to rip off Pennsylvanians,” Shapiro said.
“I am honored to join the attorney general’s terrific consumer protection team,” Smyth added. “The Consumer Protection Bureau saves Pennsylvania families millions of dollars each year, and I am excited to contribute to this great work.”
All of the developments caught the attention of David Kennedy, who is vice president and director of compliance at the American Recovery Association. Kennedy, who also is the chief executive officer of First Credit Resources, cautioned how this new enforcement unit could impact repossession agencies and other third-party providers that participate in recoveries.
“A lot of you thought you would never see an agent from the CFPB or a CFPB-type agency because of your size. Well, I can assure you now, if you are located in Pennsylvania, your chances just went from zero to ‘see you next year,’ maybe even late this year,” Kennedy said in a message distributed by ARA and obtained by SubPrime Auto Finance News.
“We all know how this is going to go,” he continued. “When one state does it, the other states will watch to gauge the success and then jump on the band wagon. All your small clients who have not placed the same importance on compliance as ARA has done and have continued to use off-duty police, constables, sheriffs, or just unlicensed repossessors, have much to fear.
“Our loyal members who have taken advantage of the ARA webinars and compliance testing, have instituted the policies and procedures we have been going over for at least three years, have taught their street-level employees the information, and have created the culture of compliance that we as an association have been constantly and consistently talking about, have nothing to fear,” Kennedy went on to say.
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