Lawsuit Alleges ‘Abusive Practices’ by CFPB (July 23, 2013)
July 23, 2013
Kimberly Pisinski, a Connecticut-based attorney, yesterday filed a lawsuit against the Consumer Financial Protection Bureau (CFPB) in the U.S. District Court for the District of Columbia claiming that the federal agency engaged in “abusive practices, including attempts to regulate the practice of law, attempts to collect attorney-client protected material and overreaching demands for . . . personal financial information of American citizens.”
Pisinski, along with fellow plaintiff Morgan Drexen Inc., is seeking orders declaring the CFPB’s structure and the provisions of the Dodd-Frank Act that created the bureau unconstitutional, as well as other requests for relief. Morgan Drexen, a Costa Mesa, Calif.-based provider of legal support services, including paralegal personnel and proprietary software, provides its services to Pisinski.
The lawsuit stems from a CFPB investigation of Morgan Drexen, in which the bureau allegedly is seeking, among other information, thousands of personally identifiable documents pertaining to Pisinski’s bankruptcy clients.
“At some point, this agency, which has expansive powers to write its own rules, needs to be reeled in,” said Pisinski. “Americans facing bankruptcy have enough to deal with without having the personal, privileged details of their financial troubles seized by the federal government for an unknown purpose.”
Pisinski and Morgan Drexen have rejected the CFPB’s “investigative demand” to provide what they say are confidential communications and financial records of thousands of consumers who are considering filing for bankruptcy.
“We believe this work is within our authority and consistent with the ordinary course of a government investigation,” a CFPB spokesperson tells Paybefore. “Our goal is to determine whether companies are complying with the law and seek appropriate remedies where that’s not the case.”