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Repo Man Rebuff

August 8, 2013

The East Bay Community Law Center—founded in 1988 by Berkeley (Boalt) Law School students—garnered some effusive kudos when Gov. Jerry Brown signed the Fair Debt Buying Practices Act last month. The center was instrumental in the passage of the bill, which strengthens consumer protections against coercive debt collection.

As the law school reported, the center was directly involved in drafting the bill and unrelentingly lobbied legislators for its passage, emerging as its prime advocates along with California Attorney General Kamala Harris. Among the law’s requirements: that debt collectors verify they are pursuing the right person, and for the correct amount of debt.

Which got us thinking:  does the bill—and the law center’s grass-roots advocacy—mark a return to the ebullient consumer activism of the 1960s and ’70s? Or is it an anomaly, a bump in the broad freeway that leads to deregulation and global laissez-faire capitalism?

We queried Jeff Selbin, the center’s Faculty Director, and Megan Ryan, a staff attorney at its Neighborhood Justice Clinic, for their take.

Selbin expressed measured optimism that consumer power is ascendant. “I don’t think it’s a straight line, but yes, I think things may be turning around,” he said. “And I think the economic recession had a lot to do with it. Three things have hit people very hard—the mortgage foreclosure crisis, the consumer debt crisis, and the educational debt crisis.”

Those three blows didn’t just affect low-income people, Selbin noted. “It also hit the middle class, which is why [consumer protection] may be gaining real traction. We had this decades-long period of deregulation by law and lax enforcement of existing regulations by practice, and it ended up putting millions of people at risk. There’s increasing recognition of that.” He acknowledges that consumers share culpability:  “People were only too happy to borrow heavily on their homes and max out their credit cards. But no matter how you look at it, the situation was unsustainable, and the predatory practices that followed just made things worse.”

Selbin says the Fair Debt Buying Practices Act is but the latest in a series of laws California has enacted in recent years to protect consumers from aggressive debt collectors. Other states have also passed more robust consumer safeguards. And collectively, Ryan said, this is all packing a punch.

“I really think the situation is better than it was four or five years ago,” Ryan said.  “Litigation has also helped…. A lot of the people who were engaged in these ugly practices—trying to collect on time-barred debt or unsubstantiated debt, harassing or threatening people, even ID theft—were successfully taken to court. There has been a sense of outrage across most of society due to the financial crisis, and it has registered in the courts and on lawmakers. People were seeing the financial institutions walk away scot free, while they were losing their homes and jobs, and going bankrupt from medical bills. It made them angry. It created pressure.”

Selbin observed that interest in consumerism isn’t restricted to the financially stressed hoi polloi—it’s rising in academe as well. “Five years ago, you didn’t seen many [academics] thinking and writing about these issues,” he said. “On the corporate side, sure—lots of thought and effort went into corporate bankruptcy, for example.  But consumer bankruptcy?  Very little. That’s changing now.  The number of younger scholars who are investigating these issues is growing, and they’re producing some very compelling work.”

Who at Cal would qualify for that company?  Selbin paused.  “Let’s just say we would love to see some young scholars at the university who specialize in these subjects,” he said. “We recognize the importance of this work, and we very much want to be part of it.”

—Glen Martin

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