Call Us Today For A Free Quote | 866.940.1101
Professionals Insuring Professionals

The Consumer Financial Protection Bureau (CFPB) was formed by the Dodd-Frank Act.  The main intent of the CFPB was to help consumers that were having issues with Banks, Lenders and other Financial Institutions.  CFPB jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors and other financial companies operating in the United States. 

By extension, it has also taken action against law firms that represent clients in these industries.  In particular law firms that are engaged in collection of debt.  The conundrum for law firms is that when the CFPB accuses a law firm of misdeeds, there is not insurance coverage.  Attorney Malpractice polices generally have exclusions for fines and sanctions levied against a law firm.  I have had conversations with a number of law firms that are concerned about the lack of insurance protection, as a CFPB action could be the one thing that puts a law firm out of business, especially sense they believe that likely would have done nothing wrong.  This has left many law firms in the precarious position of having to accept a consent order against them that could be in the Millions of dollars or fight the consent order and possibly lose.

Without any insurance protection, most law firms have accepted the consent order and the penalties that go with it rather than risk losing and possibly bankrupting the law firm.  Because in addition to no indemnity payment, there is also no attorney malpractice coverage for defense costs.

The Ohio based law firm of Weltman Weinberg & Reis (WWR) did not accede to the consent order.  CFPB has now filed suit against WWR.

Only time will tell how fighting CFPB works out for WWR.  Law Firms that are representing and/or performing services for any client or service that falls within the purview of the CFPB, needs to be aware of the consequences if the CFPB feels that a firm has violated the law.

Share |

No Comments

Post a Comment
Required (Not Displayed)

All comments are moderated and stripped of HTML.
Submission Validation
Change the CAPTCHA codeSpeak the CAPTCHA code
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2013
  • 2011

View Mobile Version
Quick Contact
We love referrals! And thank you even more for your continued business.
Customer Service
Self policy service any time of the day, directly from our website.
Join Our Newsletter
Stay in touch with the latest events, news and offers we have.
From Our Blog From Our Customers
Read More Read More
Facebook Twitter LinkedIn Google Maps
Stay In Touch With Us Helpful Site Links Contact Us
Sign up now to receive new and updates 5075 Cascade Rd. SE, Ste. E
Grand Rapids, MI 49546

Local: 616.940.1101
Toll Free: 866.940.1101
We have the expertise to find you the right coverage at the right price 
Powered by Insurance Website Builder