Current Industry News
Opinion analysis: An extremely narrow Fair Debt Collection Practices Act ruling
On Wednesday, the Supreme Court unanimously affirmed the U.S. Court of Appeals for the 10th Circuit in Obduskey v. McCarthy & Holthus LLP, holding that parties who enforce security interests are not debt collectors within the meaning of the Fair Debt Collection Practices Act provided that they do no more than the bare minimum required by state law to enforce the security interest. Justice Stephen Breyer’s opinion for the court is short and primarily focused on the text of the statute. After the argument, in which the justices sounded skeptical about the petitioner’s reading of the text, this outcome is hardly surprising. Indeed, the most notable thing about this case is probably Justice Sonia Sotomayor’s concurrence.
NEW DEBT SALES ROUNDTABLE ANNOUNCED FOR COLLECTION AND RECOVERY SOLUTIONS 2019 IN LAS VEGAS, NV
Resource Management Services, Inc. is pleased to announce Marian Sangalang, Vice President of The Bureaus, Inc. and currently President of RMA International, will moderate a roundtable, “Best Practices in Debt Sales at the Collection and Recovery Solutions 2019 conference at the Four Seasons Hotel, Las Vegas May 8 – 10, 2019.
California Consumer Loans Exempt from Usury May Be Deemed “Unconscionable”
In a little-noticed development with significant ramifications, the California Supreme Court ruled in De La Torre v. CashCall Inc., S. Cal. 5th 966 (2018), that the interest rate on consumer loans of $2,500 or more may render the loans “unconscionable” under the California Financial Code—even though the loan is not usurious under California law. The financial product that is subject to the litigation is an unsecured $2,600 loan, payable over a 42-month term, with an annual percentage rate of up to 135%, which is typically made to subprime borrowers.
Nevada joins coalition against abusive payday lending
Nevada Attorney General Aaron Ford is pressuring the Consumer Finance Protection Bureau to enforce a rule that would protect borrowers from abusive lending. In 2017, the CFPB announced a new rule that would protect borrowers and ensure they would have the ability to repay loans, while also prohibiting lenders from using abusive tactics for repayment, the Attorney General’s office said in a statement. The rule went into effect in 2018 and was meant to protect borrowers and stop lenders from using abusive tactics to get people to repay their loans, but compliance was delayed until Aug. 19 of this year. The protection bureau has proposed to delay compliance until Nov. 19 — three years after the regulation was finalized — and is now looking into another rule that would rescind this ruling entirely, according to a statement from the Nevada attorney general’s office.