I didn’t expect insight on our national political upheaval at a bar association holiday luncheon.
But the more I think, the more I believe bankruptcy specialist Norma Hammes hit on something in her remarks.
In consumer bankruptcy, she pointed out that we see endlessly the consumer getting screwed by laws written by and for big business.
- Banks flaunt the regulations on home loan modifications.
- Private student loans, made at market interest rates, are non dischargeable.
- Debt buyers collect on ancient accounts without supporting documents or even actual service of process.
- Exemptions are out of touch with economic reality.
- Creditors violate the automatic stay and the discharge injunction without meaningful sanctions
No wonder the average Joe is disheartened. Disheartened enough to see billionaire Donald Trump as the antidote to their troubles.
That’s really disheartened, and disheartening.
Law tempers markets
Consumer law has grown up around the idea that there should be safeguards for the little guy in his dealings with big business.
The idea that the little guy will have an array of market choices that will incentivize consumer friendly behavior from corporations is hopelessly romantic.
Or unremittingly self serving on the part of big business.
Consumer law draws some boundaries and imposes some remedies when the market fails to deal fairly with the consumer.
Only the law is created by Congress, and Congress is in thrall to big money, and big money benefits when business is unimpeded by consumer protection.
So we see this in our bankruptcy courts, where the least resilient consumers continue to get eaten alive by creditors.
Powerless despite the law
At the personal level, I see this when clients ask why creditors get away with continuing to attempt collection on discharged debts. Why creditors don’t have systems that keep them from shrugging off the mandates of the law? Why creditors get to add their attorneys fees to the client’s mortgage account, but the client doesn’t get their fees when they prevail?
And the “why” is plain and simple that it’s cheaper for creditors to break the law and pay paltry sanctions than it is to respect the law and their customers by compliance.
Norma recounted with pain the retort of Jamie Dimon, Chase Bank president, to Senator Warren’s charge that the bank was breaking the law: “So hit me with a fine. We can afford it.”
Any surprise that folks want change?
