Home > ADVOCACY > Where We Stand > CFPA Letter

March 15, 2010


Hon. Charles Schumer (also sent to Senator Kristen Gillibrand)
United States Senate
313 Hart Senate Office Bldg.
Washington, DC 20510

Dear Senator Schumer:

On behalf of the 2,500 employer members of the Buffalo Niagara Partnership, I urge your close scrutiny of the plan to a form an independent Consumer Financial Protection Agency (CFPA) as proposed in H.R. 4173, the “Wall Street Reform and Consumer Protection Act” and in the Senate version, “Restoring American Financial Stability.” This legislation, if enacted, will have a deleterious effect on the Buffalo Niagara region’s economy and workforce.

The Partnership strongly agrees that responsibility and accountability must be restored to the financial system. However, the specific proposal establishing the CFPA entails expansive powers over numerous industries that are currently creating sustainable jobs in our region.  Collections companies sector is part of a lively back office/financial services industry in Buffalo Niagara and is one of our targeted industry sectors. We are home to approximately 110 collection agencies, and the New York State Department of Labor estimates that there are 5,200 collectors working in our region. These are well-paying jobs, with the average collections professional earning $35K-$40K. In addition, collections work supports a number of other industries in Buffalo Niagara, including IT, legal support, data processing, direct mail, security and telecommunications.

The effects of punitive changes designed to mitigate illegal practices by “bad actors” on legitimate job creation and retention must be kept at the forefront of the debate. A specific area of great concern to us is the power given to the CFPA to prescribe rules governing employers’ compensation practices regardless of the wide array of businesses in a vast number of jurisdictions that would fall under CFPA’s oversight. This constitutes another instance of overregulation, as ample state and federal laws already regulate compensation practices. Moreover, restrictions on compensation will further diminish expanded opportunities for job creation in the credit and collections industry, as well as personal financial growth opportunities for properly licensed, bonded and trained individual workers engaged in legitimate, ethical, collections operations.

The proposed legislation also grants the CFPA the authority to exact civil penalties with exceptionally high caps– $5,000 for an unknowing violation and up to $1 million per knowing violation per day. These penalties and fines are more than excessive – they will be crippling for the entire industry.   

The Partnership applauds your efforts to protect consumers from risky financial practices but, we also feel consumer protection laws must be carefully crafted in a way that enhances consumer protection without allowing the credit and collections industry and the hard-working individuals they employ to become collateral damage.  I encourage you to bring the dangers of creating a Consumer Financial Protection Agency with excessively broad authority to the attention of your colleagues on the Senate Banking Committee.

Sincerely,

Andrew J. Rudnick