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Who's Killing the CFPB? We Are.

Unfortunately, just as time waits for no man, many of the abuses that the CFPB was created to address continue unabated, and in fact, by all indications, seem to be accelerating. So, as we approach November 6, 2012, there are a few things you should ponder before reflexively casting a ballot for the guy whose name seems most familiar. First, let's look at the numbers.

There are two kinds of statistics: the kind you look up, and the kind you make up. Let's deal with the first kind, and let's stick to only one broad area of Bureau responsibility that is today largely unregulated -- debt collection abuse and debt collection fraud. Because of the persistently vegetative state of the economy, the debt collection industry is booming. In 2010, approximately $150 billion worth of problematic debt was bought from its originators. In the same year the Federal Trade Commission received 140,036 consumer complaints about attempts made to collect that debt, up 17% from 2009. There was only one consumer fraud category for which more complaints were registered with the FTC--and that was, of course, identity theft. The FTC does not keep count of complaints made to state consumer protection agencies, police departments, or law firms--so the number of actual consumer complaints about debt collection practices was likely geometrically larger.

The FTC regulates many things, including things like large-scale mergers between multinational oil companies, and Verizon's proposed $3.6 billion deal with the cable companies. It seems unlikely that your complaint about getting that 3 a.m. phone call will get much attention, doesn't it? Worse, the agency is statutorily unable to do much. It enforces the Fair Debt Collection Practices Act, a 1978 statute that is good as far as it goes, but since it was written before things like cell phones and computers, it leaves a lot to be desired. Moreover, the FTC has no authority to issue rules or regulations pursuant to the act, which is one of the principal reasons that the CFPB was created in the first place.

Looking at the kinds of abuses that have been reported is enough to make anyone lose sleep, even if you are pathologically punctual about paying your bills. Late-night calls, robo-calls, calls to neighbors and friends, threats of lawsuits and much worse are commonplace. Then there are the out-and-out frauds.

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