Would New Federal Controls On Credit Card Debt Collection Help Consumers?

As a result of increasing public pressure for governmental support of debt relief measures (spearheaded by the ever more powerful advocacy groups tackling the basest tendencies of the credit card debt industry), commentators and pundits familiar with the goings on around Capitol Hill agree that our elected officials may soon have no choice but to bow to popular opinion and create a wholly separate branch of the Federal Trade Commission specifically designed to constrain the abusive practices of the burgeoning credit card debt collection market.  At the same time, however, the fairly explosive political landscape concerning interest bearing consumer debt loads raises very real fears that the implementation of any substantive changes may actually do more harm than good.

The prospective Department of Consumer Financial Protection (one of several possible titles currently being tossed around Congressional back rooms) would not necessarily effect a notable improvement within the legislative oversight of the creditors, and, according to a certain school of thought among the more progressive observers of the electoral scene, may even damage the dwindling shields that the American people yet rely upon.  So long as the Federal Reserve and the administrators of our central bank hold the purse strings to any enforcement activities, there’s an obvious conflict of interest as the macroeconomic preoccupations of the Fed shall always prioritize the bottom lines of the corporate creditors well above those of the average American family’s credit card debt relief.

For that matter, even if the new CFP bureau attains some semblance of legitimacy and independence with regards to the implementation of regulatory strictures intended to prevent lender strong arm tactics and help consumers avoid bankruptcy, the more conservative arm of the national body politic has increasingly demanded that any such division of the Federal Trade Commission apply for monetary appropriation annually, under the clear threat of denial should their actions interfere with the creditors’ larger concerns.  In other words, if the proposed Consumer Finance Protection agency representatives should somehow manage to actualize any substantial change within the more obviously unjust collection practices of the super banks controlling so much of the country’s wealth through personal credit card debt account balances, our elected officials (at least those tied inextricably to the hip of the brimming coffers of Big Lending political action committees) would effectively kill any further efforts by cutting all funding support.

In the bleakest of all possible scenarios, the more progressive minded legislators may force through the creation of such an organization at the expense of eliminating all of the existing regulations controlling unsecured debt settlement and reclamation only to see the bureau’s powers immediately neutered by the withdrawal of fiduciary resources.  Under such a nightmare envisioning, creditors could essentially do whatever they wanted to force the collection of past debts, and ordinary citizens would not even have the capacity to file a lawsuit for gross misapplication of duress or the most egregious examples of harassment.  To be honest, given the current pro business climate of the political landscape – both sides of the ideological aisle wishing to avoid a return to the recessionary markets as dearly as their constituency wishes to avoid bankruptcy protection for their own credit card debt bills – the national legislature has hardly shown signs of following through with the populist claims of evening out the playing field in favor of the borrowers, and any superficial nods toward governmental debt relief aid must be thoroughly scrutinized for fear things could grow even worse in the coming years.

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