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Press Release: Towards Justice Responds to the Consumer Financial Protection Bureau’s Employer-Driven Debt Report

Denver, Colorado – Last week, the Consumer Financial Protection Bureau (CFPB) released a critical report following a yearlong investigation into employer-driven debt, which has proliferated across the labor market as employers seek to use debt and credit products to keep workers trapped in their jobs and shift business costs onto workers.

The Bureau’s report highlights how employer-driven debt harms workers by stripping them of power and control while increasing workers’ financial precarity in service of the profits of employers and third parties.

“We at Towards Justice are thrilled to see the CFPB take a leadership role on the intersection of debt and work,” said Towards Justice’s Executive Director David Seligman. “The CFPB’s leadership helps level the playing field, and will be critical to changing the landscape of employer-driven debt and Training Repayment Agreement Provisions (TRAPs). The Bureau demonstrates, once again, that it is on the front-lines of the fight to make our marketplace fairer and more equitable.”

In its report, the CFPB highlights a number of ways that employer-driven debt harms workers. Through its litigation and advocacy across the country, Towards Justice’s work highlights how these harms can implicate a wide swath of legal protections.

Employer-driven debt isn’t just a workplace law problem, a consumer law problem, or a competition law problem. Advocates and agencies like the CFPB must act in concert to address the problem with all the legal and policy tools available. 

Employer-driven debt:

  • Can amount to modern-day peonage that keeps workers trapped in their jobs in violation of trafficking laws, as alleged in our case against Health Carousel;
  • Burdens workers with debt from fraudulent and unlicensed training problems and misrepresents the true costs and nature of predatory student loans, as alleged in our case against PetSmart, in violation of consumer lending and fraud laws;
  • Involves unfair competition by impeding worker mobility, triggering antitrust and competition claims, as we allege in our case against Ameriflight;
  • And puts business costs onto workers in violation of minimum wage laws, as we allege in cases against Ameriflight, Advanced Care Staffing, and PetSmart.

Through its litigation, advocacy before state and federal agencies, and testimony, like Seligman’s to the Senate Banking Committee last year, Towards Justice has been working to help its clients attack employer-driven debt and hold corporations accountable for locking workers into unhealthy, unsafe, and unfair working conditions as a way to increase their own profits.

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