HAs anyone heard of the CUSIP # defense?

[dabradshaws]

Most of us know how these credit card debts are created out of thin air by our simple signature. I've heard some companies are using a defense for summons and court action using a CUSIP number. From my understanding this # is assigned to any instrument that is created and then traded in any form on wall street. If "your" funds are actively traded then, "you" would actually have a claim to some or all of those funds. From what I understand the attorneys steer clear away from any this situation as to not draw attention to it. Even original creditors for obvious reasons.Is this true? Anyone know anything about this? I can only get limited information from the source on this. You fellow members are such an invaluable wealth of information, I just wanted to know if anyone else has heard of this. This guys is claiming he can stop lawsuits dead in their tracks with this. Its expensive though. Thanks for any input.

[WhoCares1000]

Stick with the tried and true methods. Deny the debt and make them prove that the debt is yours and that they have the right to collect on the debt. The Wall Street issue is one reason so many creditors have problems providing the evidence required to win a judgment should the defendant fight. Why they do it is because 97% - 98% of the defendants do not put up more than a token fight and the other 2% - 3% can simply be dismissed.

[FL4answer58]

I've heard some companies are using a defense - using a CUSIP number... "funds are actively traded then, "you" would actually have a claim to some or all of those funds.

Attorneys stear clear of many schemes and theories like these based on conjecture alone. CUSIP [Committee on Uniform Security Identification Procedures]. The CUSIP defense is not an 'established' legal matter and has no legal grounds (any party in a claim would have to go through far to many hurdles to overcome the body of evidence).

CUSIP is owned by American Bankers Association, CUSIP Service Bureau acts as the National Numbering Association (NNA) for US, CUSIP serves as the National Securities Identification Number for products issued in US. The purposes of CUSIP code are 'facilitating clearing and settlement of trades'.

Yes banks and stock trade on CUSIP, you have a SS number, your checks have a bank routing code, your Credit Card has an ANSI number, etc ... - All of which are a settled legal matter aside from errors, not difficult to confirm with limited expert testimony.

Think of it as a small part of the complete material facts of the case, you would not defend a JDB breach of contract case by 'unjust enrichment' alone would you?

Take note of a recent quote titled "Did You Know That Prisoners Are Bonded & Given A Cusip Number?" from one of these CUSIP theory pages:

"The prisoner is released when the bond matures, and they have finished earning their profits (interest). It is rumoured that a prisoner can be released if a bond is issued to cover the cost and cancel/satisfy the obligation. We are the self loading baggage in a commercial transaction of international trade and securities exchange".

Would you care to cite 'rumour' to a judge at trial?

Aside from this defense method being just another 'conspiracy' theory - this one is busted.

"funds are actively traded then, "you" have a claim to some ... of those funds" --> Its called a stock purchase.

Edited September 19, 2010 by FL4answer58

[dabradshaws]

Thanks for the input. I believe the guy I am talking about is referring to the threat to use this information as a deterrent against lawsuits that are filed. Does any one know HOW to find out if your debt instrument ( credit card application) is being traded and indeed if it is possible to prove it through a cusip number? Does anyone know how to get that cusip number? Wouldn't this be a great basis for a countersuit if you could get that information? You guys have made some real valid points. Thanks for the input. You definitely wouldn't want to go into court trying to argue this point as a response to a summons or motion for default judgement. The guy I'm dealing with says he can get the cusip number for a very high fee ( around $3K) and it can be used as a countersuit to get an original lawsuit or even a threat of a lawsuit dropped. It would make sense if it A. were true B. the debt was a high amount. Thoughts? I'm just skeptical you could even prove they are trading anywhere by actually finding the debt trading somewhere.

[Massive]

Thanks for the input. I believe the guy I am talking about is referring to the threat to use this information as a deterrent against lawsuits that are filed. Does any one know HOW to find out if your debt instrument ( credit card application) is being traded and indeed if it is possible to prove it through a cusip number? Does anyone know how to get that cusip number? Wouldn't this be a great basis for a countersuit if you could get that information? You guys have made some real valid points. Thanks for the input. You definitely wouldn't want to go into court trying to argue this point as a response to a summons or motion for default judgement. The guy I'm dealing with says he can get the cusip number for a very high fee ( around $3K) and it can be used as a countersuit to get an original lawsuit or even a threat of a lawsuit dropped. It would make sense if it A. were true B. the debt was a high amount. Thoughts? I'm just skeptical you could even prove they are trading anywhere by actually finding the debt trading somewhere.

Money is being made on all the credit card accounts, it is called securitization and you use it as an affirmative defense if you are ever sued. I know of no credit cardmember who was ever told there would be active trading on their alleged credit card account, also known as credit default swaps. That is one reason you will see posts from me telling consumers that they don't owe so and so any money. Because in reality and pursuant to the actual facts, they don't!!

[nobk4me]

Securitization in a nutshell: what the banks did with mortgages, they also did with credit cards. Pooled them and sold them off to investors. All the credit card companies are doing is collecting money that they then turn over to the investors.

It's a very complicated subject, but I think this may be the issue that will break their backs, if pleaded correctly. Look at the Securities and Exchange Commission website, www.sec.gov, and search for your creditor. Look at the prospectus, which will be lengthy. They all did it. They lost NO money when you stopped paying them.

[FL4answer58]

Securitization in a nutshell: what the banks did with mortgages, they also did with credit cards. Pooled them and sold them off to investors. All the credit card companies are doing is collecting money that they then turn over to the investors.

It's a very complicated subject, but I think this may be the issue that will break their backs, if pleaded correctly. Look at the Securities and Exchange Commission website, www.sec.gov, and search for your creditor. Look at the prospectus, which will be lengthy. They all did it. They lost NO money when you stopped paying them.

Good citation for my files - thanks nobk4me

[Massive]

Securitization in a nutshell: what the banks did with mortgages, they also did with credit cards. Pooled them and sold them off to investors. All the credit card companies are doing is collecting money that they then turn over to the investors.

It's a very complicated subject, but I think this may be the issue that will break their backs, if pleaded correctly. Look at the Securities and Exchange Commission website, www.sec.gov, and search for your creditor. Look at the prospectus, which will be lengthy. They all did it. They lost NO money when you stopped paying them.

Great post!!

[colormeruby]

@nobk4me, Massive,

What is it specifically that I am looking for in all this SEC paperwork? I have already seen some of these. I have used some of it, however, what is the specific information you are referring to? And am I looking up the JDB or the OC? or both,y'all have made me curious. Could y'all please just elaborate a little more? THANKS!!!

@massive, about to amend my answer, how would you plead the securitization? is there some law for this I can add into my pleading? would this go into ultra-vires as we had discussed before on this site?

Thanks y'all!

[FL4answer58]

@nobk4me, Massive,

What is it specifically that I am looking for in all this SEC paperwork? I have already seen some of these. I have used some of it, however, what is the specific information you are referring to? And am I looking up the JDB or the OC? or both,y'all have made me curious. Could y'all please just elaborate a little more? THANKS!!!

@massive, about to amend my answer, how would you plead the securitization? is there some law for this I can add into my pleading? would this go into ultra-vires as we had discussed before on this site?

Thanks y'all!

SEC paperwork on JDB company or bank?

I have SEC paperwork from JDB's and report from studies on secondary portfilio market - exception to trading [NY, Legial Aid Orgs and Regulatory commision] that may help.

see:

a) Collecting Consumer Debts: The Challenges of Change. A Workshop Report

February 2009 Federal Trade Commission

Nat'l Consumer Law Center. DEBT COLLECTION ABUSES WIDESPREAD

FOR IMMEDIATE RELEASE: JULY 15, 2010

c) Comments To the Federal Trade Commission Regarding the Fair Debt Collection Practices Act Protecting Consumers in Debt Collection Litigation and Arbitration: A Round table, August 1, 2009

d) United States Government Accountability Office, Testimony Before the Committee on Commerce, Science, and Transportation, U.S. Senate

DEBT SETTLEMENT Fraudulent, Abusive, and Deceptive Practices Pose Risk to Consumers, April 2010

e) H.R.5387 - Debt Settlement Consumer Protection Act of 2010

f) Gerry Spence's book entitled, "Win Your Case", some part on this subject.

g) Case; PORTFOLIO ACQUISITIONS, LLC, v. Randy Feldman, Mentions "Dangers often lay hidden in secondary market debt portfolio offerings". IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT. BRIEF OF AMICI CURIAE LEGAL ASSISTANCE FOUNDATION OF METROPOLITAN CHICAGO, NATIONAL ASSOCIATION OF CONSUMER ADVOCATES, AND AARP IN SUPPORT OF DEFENDANT-APPELLEE.

h) Ed Combs letter to Federal Trade Commission Office of the Secretary

Re: Debt Collection Roundtable - Comment, Project No. P094806, refers to the same portfoio market. "More collection agencies are turning to the debt resale market as a place to pick up accounts to collect on. Too small to buy portfolios directly from major credit issuers, they look to the secondary market where portfolios are resold in smaller chunks that they can handle."

i) Debt Deception How Debt Buyers Abuse the Legal System to Prey on Lower-Income New Yorkers May 2010.

Also see USF, Subprime Mortgage Market Turmoil: Examining the Role of Securitization – A hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investment . Written Testimony of Christopher L. Peterson Associate Professor of Law University of Florida.

Edited September 23, 2010 by FL4answer58

[FL4answer58]

I forgot another major reference: Its been a long time since I last visited this site...but very informative. When I went back today...ending up a few hours reading.

FDIC, Credit Card Securitization Manual http://www.fdic.gov/regulations/examinations/credit_card_securitization/ch1.html

Edited September 23, 2010 by FL4answer58

[admin]

It's a very complicated subject, but I think this may be the issue that will break their backs, if pleaded correctly. Look at the Securities and Exchange Commission website, www.sec.gov, and search for your creditor. Look at the prospectus, which will be lengthy. They all did it. They lost NO money when you stopped paying them.

I'm no more fan than you of the banks, but telling a judge they lost no money isn't going to make any difference, if that's what you are imply -> to use it as a defense.

The ruling will be based on law.

[WhoCares1000]

All you are going to end up doing is confuse a bunch of people and in the end, you would probably only be able to prove that the organization suing you has not standing which would lead to a dismissal w/o prejudice while the OC finds the investors who really own the debt and as such, have a loss to come and sue you.

Also, realize that the organizations that do own this debt are places like Government and Non-Government unions. Do you really want a Jimmy Hoffa like organization coming after you for a bad credit card debt?

[Massive]

I'm no more fan than you of the banks, but telling a judge they lost no money isn't going to make any difference, if that's what you are imply -> to use it as a defense.

The ruling will be based on law.

GOD forbid a material fact be allowed on the record in a debt collection case.

[Massive]

I'm no more fan than you of the banks, but telling a judge they lost no money isn't going to make any difference, if that's what you are imply -> to use it as a defense.

The ruling will be based on law.

In LAW, the proper owner must be the one filing suit. Not some entity who long ago transferred or was a seller in the transaction.

[FL4answer58]

In LAW, the proper owner must be the one filing suit. Not some entity who long ago transferred or was a seller in the transaction.

Similar debate in the mortgage foreclosure industry - comparable defense - complexity of the note when portfolios exist, partitioned off and are traded on that note.

However, I agree with Admin 'unjust enrichment' just won't stand alone - for the sake of argument - how would we define the defense?

What procedural rules, court opinions or cases do we have?

Edited September 23, 2010 by FL4answer58

[nobk4me]

Similar debate in the mortgage foreclosure industry - comparable defense - complexity of the note when portfolios exist, partitioned off and are traded on that note.

However, I agree with Admin 'unjust enrichment' just won't stand alone - for the sake of argument - how would we define the defense?

What procedural rules, court opinions or cases do we have?

Not sure of any precedent, but the mortage issue of "produce the note" is comparable and well-known at this point, so the analogous conduct can be argued.

Best strategy is a MTD as plaintiff is not the real party in interest.

Remember, Motions Cost Them Money. They have to respond or the movant (should) win by default. The basic strategy for most of us here is not winning on the evidence, but changing the dynamics and cost-benefit analysis of debt collection, such that someone will eventually say, "This isn't worth it."

Yes, the securitization issue may be a novel strategy, but that is how new law is made, by being creative, thinking outside the box, and pushing the limits.

[dabradshaws]

I was gone for a week and I came back to read all of your great replies. Thanks for the information. A lot of helpful things to look into. Looks like their is an opportunity to further zero in on a company that is looking to "unjustly enrich" themselves in any case. Thanks again for the sharp minds that contribute to this site.

[FL4answer58]

Remember, Motions Cost Them Money. They have to respond or the movant (should) win by default. The basic strategy for most of us here is not winning on the evidence, but changing the dynamics and cost-benefit analysis of debt collection, such that someone will eventually say, "This isn't worth it."

Good point - CC debt collection is often less then $5000 - not a mortgage at over $100k.

I don't think there are many JDB's or OC who would push it past an acceptable cost-analysis of collection on debt.

Eventually, some lawyer will establish the precedent by asking the courts to decide the securitization question.

The same question in mortgage 'produce the note' defense is pressing the courts now.

Edited September 28, 2010 by FL4answer58

[FL4answer58]

SEC Proposed Rule Changes

http://www.sec.gov/rules/proposed/2010/33-9117fr.pdf

“This financing technique makes it easier for lenders to exchange payment streams coming from the loans for cash so that they can make additional loans or credit available to a wide range of borrowers and companies seeking financing. Some of the types of assets that are financed today through securitization include residential and commercial mortgages, agricultural equipment leases, automobile loans and leases, student loans and credit card receivables.”

“At its inception, securitization primarily served as a vehicle for mortgage financing. Since then, asset-backed securities have played a significant role in both the U.S. and global economy. At the end of 2007, there were more than $7 trillion of both agency and non-agency 24 mortgage-backed securities and nearly $2.5 trillion of asset-backed securities outstanding.”

Risk Retention

“Risk retention requirements have been discussed by some market participants as one potential way to improve the quality of asset-backed securities by better aligning the incentives of the sponsors and originators of the pool assets with investors’ incentives. A chain of securitization may involve multiple participants that may serve the function of originator, sponsor, servicer, or trustee. One concern that has been debated is whether the model of securitization where loan originators do not hold the loans they originate but instead repackage and sell them as securities.”

“In addition, in its January 2009 framework, a working group on financial reform in the Group of Thirty recommended that regulated financial institutions be required to retain a meaningful portion of the credit risk of the financial assets they are packaging into securitized and other structured credit products.”

See also H.R. 4173, 111th Cong., (bill that would require a creditor or securitizer to retain five percent of the credit risk on any loan that is transferred, sold, or conveyed);

“However, we are primarily concerned with the risks that are under the direct or indirect control of the sponsor (such as the quality of the originator’s underwriting standards and the extent of the review undertaken to verify the information regarding the assets).”

“Would the proposal have an impact on the true sale at law of the assets or on the rights of ABS investors as a result of conservatorship, receivership or bankruptcy of the originator or sponsor? If so, how can we revise the proposed risk retention condition to require risk retention without jeopardizing the transfer of assets as a true sale at law or the remoteness of those assets in the event of any bankruptcy, conservatorship, or receivership of the sponsor or originator? “

Proposed Coded Responses

“Consistent with our efforts to standardize asset-level disclosure, we are proposing that issuers provide responses to the asset-level disclosure requirements as a date, a number, text or a coded response.”

“We are sensitive to the possibility that certain asset-level disclosure may raise concerns about the personal privacy of the underlying obligors. In particular, we are aware that data points requiring disclosure about the geographic location of the obligor or the collateralized property, credit scores, income and debt may raise privacy concerns.”

“We also realize that a situation may arise where an appropriate code for disclosure may not be currently available in the technical specifications. To accommodate those situations, our proposals provide a coded response for ‘‘not applicable,’’ ‘‘unknown’’ or ‘‘other.’’ However, ‘‘not applicable,’’ ‘‘unknown’’ or ‘‘other’’ would not be appropriate responses to a significant number of data points and registrants should be mindful of their responsibilities to provide all of the disclosures required in the prospectus and other reports.”

“For instance, asset number types that would satisfy the requirements could be generated by CUSIP Global Services (CUSIP); the American Securitization Forum (ASF Universal Link); MERS (Mortgage Identification Number); by the registrant; or by using the convention ‘‘[CIK-number]-[sequential asset number]’’;

1. Whether the asset is designated to a particular collateral group. Some asset pools designate assets to particular groups in order to determine how cash flows will be passed on to investors;

2. Information regarding origination, such as origination date, original amount of the loan or contract, original term of the asset in number of months;

3. The asset maturity date, which is the month the final payment on the asset is scheduled to be made;

4. The original amortization term, which is the number of months in which the asset would be retired if the amortizing principal and interest were to be paid each month;

5. Information regarding interest rate, such as the original interest rate, amortization type which means whether the interest rate is fixed or adjustable;

6. If the asset has an interest only term, the number of months in which the obligor is permitted to pay only interest on the asset;

7. Whether the interest calculation is simple or actuarial. A simple interest calculation is always based on the original principal, thus interest on interest is not included. An actuarial calculation is based on principal plus accrued interest;

8. The identity of the primary servicer that has the right to service the asset, either by name or by the MERS organization number (in the case of RMBS);

-------------------------------------------------

As an example of how this may effect CC consumers; consider WAMU debacle to CHASE and its credit card receivables. Part of these assets went to CHASE and part sold by WAMU to debt buyers. Who can tell which went where and at what time, before, during or after receivership? We just don’t have regulation on this type of paper trail.

Edited September 28, 2010 by FL4answer58

[Massive]

This is why you haunt "Original Creditors" by using securitization as one of your affirmative defenses. Make them prove they own the debt and watch the Law Firm squirm. You also question whether any of the BIG Banks have Standing to file suit in your State. Once again MAKE THEM PROVE IT!!

[FL4answer58]

This is why you haunt "Original Creditors" by using securitization as one of your affirmative defenses. Make them prove they own the debt and watch the Law Firm squirm. You also question whether any of the BIG Banks have Standing to file suit in your State. Once again MAKE THEM PROVE IT!!

Thanks Massive

I for one, will add it into my Affirm Defs from now on, ....

[MagnusTheDestroyer]

I'm bumping this to see what kind of successes people may be having with a securitization affirmative defense. I just heard of this CUSIP thing tonight in a chat room where someone claimed it had a 100% kill rate on any lawsuit. He mentioned something about the original application, that it would have the CUSIP number on it(?) I couldn't get anymore details out of him as it was a pretty busy chat room and he stopped responding.

I'm thinking of amending my complaint to include this as an affirmative defense. Do I have to request permission to take leave to amend in California?

[1stStep]

CUSIP is a security identifier - North American stocks, bonds, mutual funds are assigned them by an arm of Standard and Poors.

///

Your credit card account is unlikely to have one - unless it was sold as part of an asset backed security - and even then, you better know securities law down pat in order to convince a judge that your argument holds water.

[legaleagle]

You'd be better off pleading insanity. None of this stuff works. I've looked at over 1,000 credit card cases on line; not one time did anybody succeed with securitization. In fact, I only remember one or two people who even tried it.