CFPB Retaliatory Complaint Filing Against Morgan Drexen

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On Tuesday, August 20, 2013, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Morgan Drexen and company CEO Walter Ledda.  The complaint, filed in California federal court, accused the company of violating consumer finance protection laws.  Morgan Drexen views this lawsuit as a retaliatory move against a company that is questioning the agency’s very authority.

“We think there are some scurrilous allegations in this complaint,” said Randall K. Miller, the lawyer representing Morgan Drexen. “Our business happens to be supporting lawyers who are practicing law, and we think the CFPB is trying to regulate lawyers. By running 3,000 miles away and starting a brand-new lawsuit, they’re leapfrogging the question of whether they’re a valid agency. It’s disruptive and it’s inefficient.”

In July, Morgan Drexen filed a lawsuit challenging the constitutionality of the CFPB, alleging the agency lacks the proper checks and balances required of a government agency.  That case is being heard by a judge in Washington, DC.

The CFPB’s lawsuit against Morgan Drexen centers on the fee structure for services performed by attorneys.  Morgan Drexen does not charge any fees to consumers. The attorneys who hire Morgan Drexen charge fees for their work, which is not out of line for their industry. The attorneys who provide debt relief — even though they’re not obligated to — do so in compliance with the Telemarking Sales Rule, and those attorneys who provide bankruptcy services do so in compliance with the U.S. Bankruptcy Code.


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