For an article that illustrates, among other things, how the purchaser of distressed debt at a steep discount (and which does not provide any funds or relief to the debtor) should be in a legal position different from the original lender, see the NYT of June 26, 2016:

“To prevent potential conflicts, (the company) said it keeps its servicing employees separate from the auction staff. They work in different buildings and use separate email systems, the company said.”

This so-called legal independence need not be pondered for long to identify its ineffectiveness. In this age of globalization (at a minimum, see What’s App) one need not obtain oodles of empirical data to conceive of the structural weakness of defining independence so loosely and fecklessly. Regulation needs information linking all of the related parties to a given entity, including and especially the benefiting individuals, such that the economic enterprise is accurately defined and captured (cf. regulatory capture). The ability to fragment and isolate economic activity in entities unlinked to the directing mind(s) results in regulators chasing the arm of the octopus (q.v. autotomy). Thus, the persistence of regulatory failure that itself breeds further shrinking of confidence in the public mind of the benefits of regulation.