Another State Prepares to Step in Where CFPB Leaves Void

The New Jersey Attorney General recently announced that the state’s Governor will nominate Paul R. Rodriguez to serve as the Director of the New Jersey Division of Consumer Affairs. The Attorney General said that this appointment will help to “fill the void left by the Trump Administration’s pullback of the Consumer Financial Protection Bureau (CFPB), and fulfill one of Governor Murphy’s promises to create a state-level CFPB in New Jersey.”

The Division of Consumer Affairs is responsible for protecting consumers’ rights, regulating the securities industry, and overseeing 47 professional boards.

Rodriguez is currently Acting Counsel to New York City Mayor Bill de Blasio. Previously, he was an associate at Simpson Thacher & Bartlett LLP in New York City where he worked on financial transactions, securities regulation and intellectual property.

The Division of Consumer Affairs is responsible for enforcing laws designed to ensure the fairness and integrity in New Jersey’s commercial and investment marketplaces, and for assisting consumers with complaints or questions about particular professionals, businesses, vendors, or service providers. The Division includes the Office of Consumer Protection and the Bureau of Securities.

The Office of Consumer Protection (OCP) is the primary investigative section for consumer complaints. The main responsibility of the OCP is to enforce the Consumer Fraud Act and its regulations.

Rodriguez will begin serving as Acting Director of the Division of Consumer Affairs on June 1. Governor Murphy will formally nominate Rodriguez to the position, which is subject to the advice and consent of the State Senate.

insideARM Perspective

New Jersey does not currently require collection agencies to be licensed. A search for “debt collection” on the Attorney General website produces this educational handbook for consumers, explaining their rights. Notably, in addition to what you’d expect to see (standard rights afforded by the FDCPA), the following good advice is prominent:

DO NOT HIDE OR AVOID THE DEBT COLLECTOR. If a collector contacts you about a debt, you should talk to him or her at least once to see if you can resolve the matter. Even if you do not believe that you owe the debt, or know that you cannot repay the debt immediately, or think that the collector is contacting you by mistake - do not ignore the debt collector.

NOTE: Sending such a letter to a debt collector to whom you owe money does not rid you of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.

In a related move, last fall the Pennsylvania Attorney General created a Consumer Financial Protection Unit, and named Nicholas Smyth to lead it. Smyth, a seasoned consumer protection attorney, was one of the first hires at the (federal) CFPB.

Acting CFPB Director Mick Mulvaney has set expectations that the Bureau is currently working on a debt collection rule. Those tasked with consumer protection at the state level are likely watching closely to see what this rule will cover; and are likely prepared to step into the space if they don’t like what they see.