The 'Sophisticated Judge' Standard: A New Approach to Judicial Deception Under the Fair Debt Collection Practices Act

2012 ◽  
Author(s):  
Caleb J. Halberg
Keyword(s):  
New Approach ◽  
Collection Practices ◽  
Debt Collection

scholarly journals Regulatory Arbitrage and Non-Judicial Debt Collection in Central and Eastern Europe - Tax Sheltering and Potential Money Laundering

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Catalin-Gabriel Stanescu ◽  
Camelia Bogdan
Keyword(s):  
Eastern Europe ◽  
Money Laundering ◽  
Central And Eastern Europe ◽  
Regulatory Arbitrage ◽  
Legal Provisions ◽  
Regulatory Standards ◽  
Debt Collectors ◽  
Illegal Activities ◽  
Collection Practices ◽  
Debt Collection

AbstractNon-judicial recovery of debts is now rampant in Central and Eastern Europe (CEE). The reason is two-fold. On the one hand, the significant number of defaults in the poorer areas of Europe makes the CEE region a very attractive market for debt-collection. On the other hand, the activity is almost entirely unregulated, especially regarding abusive debt collection practices. The CEE region still lacks mature, strong, and experienced supervisory agencies that could tackle borderline activities. This enables companies involved in debt collection to comply easily with the minimal legal provisions and to circumvent the actual purpose of the law, including through tax sheltering and money laundering. The main argument developed in the paper is that the debt collection system it is designed to maximize profits, minimize tax base and, potentially, can serve as money laundering mechanism. The system functions in a triadic relationship: the debt-seller (a credit institution), the debt-buyer (usually an investment company), and the debt-administrator (a debt-collection agency, either fully owned by, or under the control of the debt-buyer), where debt portfolios are purchased at huge discounts (varying between 90 and 95% of face value). By revealing the mechanism used by debt-collectors, the paper calls for legislative intervention to seal the gap and ensure adequate taxation of debt-collection activities. The nature of regulatory arbitrage involved relates both to tax law as well as to regulatory standards, such as licensing requirements. Debt buyers benefit from the EU passport rule, make high returns on their 'investments' and optimize their taxes on profits obtained. Debt administrators perform their activity at almost no liability and no tax payable to the state. This mechanism creates favorable premises for money laundering and financing of illegal activities, as the web of offshore companies behind the debt-buyer renders the verification of the origin of their investment money extremely difficult. Using Romania as a case study, the paper addresses not only the aforementioned practices and risks, but also the potential reasons behind the state's inability either to adopt adequate legislation, or to enforce it. In doing so, the paper employs empirical evidence regarding the activity of ten Romanian debt collection agencies and relevant case law thereof. The paper concludes with the authors' proposal for a potential solution, which can be extended beyond Romania.

scholarly journals AN ANALYSIS OF THE EFFECT OF CREDIT RISK MANAGEMENT ON PROFITABILITY OF COMMERCIAL BANKS IN KENYA

2016 ◽  
Vol 1 (3) ◽  
pp. 38
Author(s):  
ANTHONY WANJOHI ◽  
MR. BERNARD BAIMWERA
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Secondary Data ◽  
Risk Governance ◽  
Credit Risk Management ◽  
Governance Practices ◽  
Collection Practices ◽  
Debt Collection ◽  
Finance Department

Purpose: The purpose of this study was to analyse the effect of credit risk management on profitability of commercial banks in Kenya.Methodology: This study adopted a descriptive design. The study targeted a population of all the 44 commercial banks with the exception of Charterhouse bank which is under statutory management. The sample of this study was 86 employees out of a possible 30,056 employees from the 43 commercial banks. The sample of 86 was generated by purposively sampling two employees from each bank.  One employee was a manager from the finance department while the other employee was a manager from the credit risk department. The questionnaire comprised of closed ended questions. Secondary data for ROA was identified. SPSS was used to produce frequencies, descriptive and inferential statistics which was used to derive conclusions and generalizations regarding the population. Regression analysis was also used to show the sensitivity of profitability, ROA to various independent variables.Results: The study findings indicated that credit department had various checks during loan credit review. The credit department always checked at the character of the borrower, collateral of the borrower, capacity of the borrower, capital of the borrower, conditions and controls during credit review. Results indicated that the banks had credit appraisal practices, credit monitoring practices, debt collection practices and credit risk governance practices in place. Regression results indicated that there was a positive and significant relationship between credit appraisal, credit monitoring, debt collection and credit risk governance practices and profitability of commercial banks.Unique contribution to theory, practice and policy: The study concluded that credit appraisal, credit monitoring, debt collection and credit risk governance practices had a positive effect on the profitability of commercial banks. The study recommends that the banks should continue emphasizing on the effective credit appraisal, credit monitoring, debt collection and credit risk governance practices so as to enhance maximum profits in banks.

scholarly journals The First Thing We Do…Let’s Kill the Kill Switches (With Apologies to William Shakespeare)

2019 ◽  
Vol 2 (3) ◽  
pp. p198
Author(s):  
Sharlene A. McEvoy
Keyword(s):  
William Shakespeare ◽  
Collection Practices ◽  
Debt Collection

A device used by lenders to assure payment of debt may endanger lives and be a violation of the Fair Debt Collection Practices Act. This paper examines the use of “kill switches” on vehicles and laws designed to eliminate or curb them.

scholarly journals A Critical Assessment of the Need for Harmonization of the Legal Framework Concerning Abusive Informal Debt Collection Practices in the European Union

2021 ◽  
Author(s):  
C.-G. Stănescu
Keyword(s):  
Financial Services ◽  
Legal Framework ◽  
The European Union ◽  
Financial Industry ◽  
Drastic Increase ◽  
The 2008 Financial Crisis ◽  
Collection Practices ◽  
Debt Collection ◽  
The Stability ◽  
The Eu

AbstractThe loss of jobs and the decline in real incomes caused by the 2008 financial crisis and the COVID-19 pandemic have affected consumers’ ability to repay their debts. These have led to high ratios of non-performing loans (NPLs), which affect the stability of the financial industry and undermine economic recovery. The result has been a need for faster debt enforcement and a drastic increase in abusive informal debt collection practices (IDCPs). In the EU, the need to regulate and harmonize abusive IDCPs surfaced in 2018 in connection to the Proposal for a Directive on Credit Servicers, Credit Purchasers and the Recovery of Collateral (CSDP). The directive would enable banks to outsource the servicing of NPLs to a specialized debt collector, but it contained no protection rules against abusive IDCPs. In this article, the researcher critically assesses the need for harmonization of the legal framework concerning abusive IDCPs in the EU, mainly from the standpoint of the initial and current text of the CSDP. Where necessary, the researcher will refer to both historical and comparative law perspectives. The researcher focuses on the legal character of informal debt collection, its relation to financial services, and its potential sui generis character. After that, the researcher will address the arguments for and against establishing pan-EU sector-specific legislation dedicated to IDCPs. Next, the researcher discusses the constitutional authority of the EU to regulate abusive IDCPs. Finally, the researcher will examine the interaction of the CSDP with other consumer (financial) protection instruments to identify the best solution for harmonizing abusive IDCPs at the EU level. The researcher will juxtapose several dichotomies: general versus sector-specific, procedural versus substantive, minimum versus maximum harmonization, and hard versus soft regulation. In the conclusion, the researcher shall synthesize the core problems and suggest an approach.

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