A group of Senate Democrats have written a letter to Rohit Chopra, the Director of the Consumer Financial Protection Bureau, calling on the agency to investigate the use of Training Repayment Agreements (TRAs) which some companies use to require employees to pay a pre-determined amount of money if they leave their jobs within a certain period of time, as a means of offsetting the money that was invested in not only training the employee, but that will have to be invested to train the employee’s replacement. TRAs can turn employees into debtors, the Senators allege in their letter, and allow companies to obtain judgments that may violate consumer protection laws.
A copy of the letter, written by Sen. Sherrod Brown [D-Ohio], the chairman of the Senate Banking Committee, along with Sen. Elizabeth Warren [D-Mass.], Sen. Bernie Sanders [I-Vt.], Sen. Dick Durbin [D-Ill.], Sen. Patty Murray [D-Wash.], Sen. Tina Smith [D-Minn.], and Sen. Robert Casey [D-Penn.] can be accessed by clicking here.
Some of those debts have been placed with third-party collection agencies, according to a published report that confirmed the CFPB will be launching an investigation into the practice.
The letter spotlights anecdotal evidence of how employers have tried to collect sums ranging as high as $100,000 from employees who leave their jobs before the TRA period expires. In some states, where non-compete agreements have been limited or restricted, TRAs are being used as a means of limiting employee turnover, the Senators allege.
“…using your existing authority, please consider reviewing the collections practices regarding TRAs, especially with regard to the frequency with which TRA-created debts are referred to collection agencies or enforced in court and how they impact middle- and low-income workers and workers of color,” the Senators wrote. “It is imperative that Americans benefit from the full range of consumer protections when assuming and paying off these obligations, including the protections of the Truth in Lending Act, the Fair Debt Collection Practices Act, and prohibitions on unfair, deceptive, and abusive acts and practices.”
