A number of lawyers start out as English majors. So the way Victorian novelist Charles Dickens chronicled the pain of the economic upheaval of the Industrial Age is embedded in their collective memory bank. Especially vivid is the way debtors were treated.
Back in those days debtors were put in prison until they could satisfy their creditors. Although that tactic seems counterproductive - how could they earn money in prison - it wasn't, not all the time. The shame of prison could motivate those in the loop to pay up the debts and spring the relative or business partner loose.
Now, of course, collection is more and more often put in the hands of law firms. Those firms contend that collection business does not constitute practicing law. However, the transactions are being conducted by members of the state bar associations. Also, attorney-client privilege can be involved. Lawyers fear that any federal regulation of that relationship could intrude on that.
No surprise, both individual lawyers and the trade associations such as the American Bar Association which represent them decry the new regulations from the Consumer Financial Protection Bureau (CFPB). As THE NATIONAL LAW JOURNAL reports, CFPB head Richard Cordray has announced that law firms handling $10 million or more in collections annually will be under its federal supervision. CFPB can review the law firm's procedures, evaluate how well it is complying with the federal regulations, and what are the risks, if any, for debtors.
Of course, this can undermine the authority of state bar associations. It can also discourage creditors from giving their business to a law firm to collect since the attorney-client privilege could become a porous entity.