Current Industry News
WebRecon Stats for May 2019: FCRA Down, Everything Else Up (and the unexpected resurgence of a familiar name)
Quick analysis: For the second time in three months, FDCPA and TCPA lawsuit numbers rose (2.8%, 13.4%, respectively) while FCRA dipped (-6.9%) from the previous month. That goes counter to the longer term trends we have been seeing that make a case for the opposite (FCRA up, FDCPA & TCPA down). At least it did until this month, when the weight of FCRA’s decline dragged the YTD number back into negative territory, bringing all three statutes down a bit YTD (FDCPA -4.6%, FCRA -1.0%, TCPA -11.1%).
ANNOUNCING LEGAL STRATEGIES AND OUTSOURCING PANEL AT DCS2019
Our legal strategies and outsourcing panel is making its way back to DCS2019, to be held September 10 – 12, 2019 at the Red Rock Hotel in Las Vegas. Join Manny Newburger, Dave Snyder, and Brian Winn for a panel on optimizing the legal collection strategy for your company. Hear how you and your clientele can have a positive relationship and productively collect on legal accounts. This 45 minute glimpse into the inner workings of a successful legal operation will be a great learning experience for all!
Fort Worth firm to pay back $39.7 million on payday loans that charged 375% interest
A Fort Worth financial firm will cancel its outstanding loans and pay nearly $40 million to consumers after engaging in an alleged payday lending operation that used Native American tribes as shields from state laws. Think Finance Inc. serviced loans that charged interest rates over 375% and locked borrowers into plans in which paying off the loan was nearly impossible, according to a 2016 complaint filed in Vermont.
Fintech algorithms discriminate 40% less than traditional lenders
Algorithmic fintech lending is less discriminatory against minorities than traditional loan officers, according to a recent study of US mortgages. The findings signal hope that technology could provide financing that’s more fair, but the research also underscores how widespread discrimination remains. The US housing market has long been prejudiced against minorities. When Latino and Africa-American borrowers are looking to buy a home, they usually end up paying 7.9 basis points (0.079 percentage points) more than whites to take out the mortgage, and 3.6 basis points more when they refinance the debt, according to a National Bureau of Economic Research working paper published this month. That comes to $765 million in additional interest costs each year. The researchers also estimated that discrimination may have resulted in as many as 1.3 million mortgage applications being rejected between 2009 and 2015. Algorithms tend to have a better record. Online financial technology companies discriminate, too, but 40% less than loan officers who make decisions face-to-face, the NBER researchers found. They also found no discrimination from the robots when it comes to loan approvals.