At a glanceFriday, June 11, 2021

Collection Industry News At A Glance - June 11, 2021
Friday June 11, 2021
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HUGE TCPA WIN!: Court Finds Aspect predictive Dialer Not an ATDS– Explains Away Footnote 7

In the best analyzed post-Facebook ATDS decision to date, a Court in South Carolina has ruled the Aspect predictive dialer is not an ATDS because it lacks a random or sequential number generator. The decision is Timms v. Usaa Fed. Sav. Bank, C/A No. 3:18-cv-01495-SAL, 2021 U.S. Dist. LEXIS 108083 (D.S.C. June 9, 2021) and–if defendants are lucky–the decision will form the bedrock for predictive dialer jurisprudence moving forward.

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Mortgage lenders loosened credit standards in May

Mortgage credit availability increased by 1.4% in May – a sign that volume-hungry lenders continued to loosen credit standards in a highly competitive market, according to Thursday data from the Mortgage Bankers Association. MBA’s Mortgage Credit Availability Index (MCAI) which uses 100 as a benchmark — increased to 129.9 in May. A decline in the MCAI suggests that lending standards are tightening while a higher number suggests loosening credit standards. Lenders concerned over borrowers’ ability to pay their bills at the beginning of the economic shutdown resulted in an exponential tightening of credit. However, May’s credit availability inched to its highest level since the early days of the pandemic, but remained at 2014 levels.

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Refinance lending more than doubles since last year

ATTOM Data Solutions reported that 3.77 million residential mortgages originated in the first quarter of 2021, up 3 percent from the previous quarter and 71 percent from a year ago, to the highest level in more than 14 years. The increase also marked the first time the total number of home mortgages rose from the fourth quarter to the first quarter since 2009, according to ATOMM’s first-quarter 2021 U.S. Residential Property Mortgage Origination Report. Lenders issued $1.16 trillion worth of mortgages in the first quarter of 2021, up 5 percent from the fourth quarter of 2020 and 81 percent from a year ago, to the largest quarterly amount since 2000, according to the report.

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Credit Card Debt Study

U.S. consumers continued to pay off their credit card debt during the first quarter of 2021, building on a record-setting performance in 2020. While 2020 was a year to forget in most respects, Americans excelled in terms of paying off credit card debt, getting rid of $82.1 billion in debt. This is a major accomplishment, considering that consumers have added an average of $45.6 billion in credit card debt per year over the past 10 years.

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Nearly half of Americans willing to take on debt this year, study shows

CreditCards.com industry analyst Ted Rossman detailed a recent study that unveiled  44% of Americans are willing to take on discretionary debt in the second half of 2021. Rossman said to expect a spending spike on goods and services on "Mornings with Maria" Thursday and argued it could impact your credit card debt.

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U.S. Treasury’s Yellen says Congress needs to fund debt relief programs

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen told lawmakers on Thursday that debt relief for poor and developing countries would be hampered without new funding, while $2.7 billion in current unmet U.S. commitments to the World Bank, International Monetary Fund and other institutions would grow.

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Attorney General Bonta Joins Brief in Supreme Court in Support of National Eviction Moratorium

OAKLAND – California Attorney General Rob Bonta today joined a coalition of 23 attorneys general in filing an amicus brief in the U.S. Supreme Court in support of the Centers for Disease Control and Prevention’s (CDC) eviction moratorium. Earlier this year, a coalition of property owners, property managers, and trade associations filed a lawsuit seeking to dissolve the moratorium, a move which would cause an unprecedented wave of evictions in states and local communities that lack their own protections for tenants.

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New Arizona law allows debt collectors access to your home’s equity

PHOENIX — If you're looking to buy or sell a home in Arizona, a recently signed law could put a wrinkle in the process.

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FTC Sends Nearly $30 Million in Refunds to People Tricked into Enrolling by School Operator’s Lead Generators

The Federal Trade Commission is sending nearly $30 million in refunds to people tricked by agents working on behalf of Career Education Corporation (currently operating as Perdoceo Education Corporation), the operator of several post-secondary schools.

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Almost half of Americans are willing to take on debt in a post-pandemic spending splurge, survey finds

Americans are ready to start spending money to treat themselves — and 44% are willing to go into debt to do it, a report from CreditCards.com finds. Millennials, ages 24-40, are most likely to take on more debt (59%) followed by Gen Zers, ages 18-24, coming in at 56%. Only 40% of Gen Xers, ages 41-56, and 32% of baby boomers, ages 57-75, said the same.

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Debt collector to return $475,000 to Wash. state consumers

SEATTLE (AP) — A Denver-based collection agency must return about $475,000 it collected improperly from up to 5,000 Washington consumers after state Attorney General Bob Ferguson prevailed in a lawsuit alleging unlawful debt-collection practices.

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Student loan forgiveness remains on the table, experts say

Student loan borrowers looking for promising signs that their debt will be forgiven have come up short of late. President Joe Biden didn’t include any debt cancellation in his budget request to Congress. Loan forgiveness was also absent from the president’s plans to rebuild the country’s infrastructure and his agenda to deliver relief to middle-class families, which included a national paid leave policy and subsidized child care.

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The average millennial has over $4,000 in credit card debt—other generations have more

Consumers of all ages carry credit cards, but some generations have larger outstanding balances than others. Members of Generation X have the highest average credit card debt at $7,155, followed by baby boomers and millennials, according to credit bureau Experian’s latest consumer findings. With an average credit card balance of $1,963, consumers in Generation Z carry the lowest credit card debt. Younger credit cardholders just starting out typically have lower credit limits than their older cohorts, so it isn’t unusual that Gen Z would have the lowest credit card debt.

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What Is Crypto Lending?

Cryptocurrency enthusiasts are often encouraged to hold on to their crypto holdings for the long haul. But if you need money, you might be considering cashing some of your cryptocurrency to cover a major or an unexpected expense. Depending on how much you need, though, you may be able to use your cryptocurrency as collateral for a loan. Additionally, many crypto platforms allow consumers to lend their digital assets in exchange for a hefty return , compared with the traditional high-yield savings account. Find out the different ways your crypto assets can work for you.

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CFPB issues FAQs on escrow accounts, Regulation E

The Consumer Financial Protection Bureau (CFPB) recently issued sets of frequently asked questions on Electronic Fund Transfer Act and Regulation E requirements, as well as servicing escrow accounts under Regulation X.

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How Much Debt Americans Have at Every Age

Borrowing increases buying power. Without credit and loans, the vast majority of Americans would not be able to buy a home, a car or even a major appliance like a refrigerator or washing machine. The tradeoff for that purchasing power, however, is debt—and debt is a fact of life for most families in the United States.

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NOT SO FAST: Court Holds Willfulness Requires Actual Knowledge of TCPA Violation

Third time’s the charm? Not quite, for a plaintiff in the Eastern District of Michigan who sought leave to amend the TCPA claims in his complaint to add a count for willful violations after already having amended the complaint twice.

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No Jurisdiction! Florida Company Defeats Massachusetts’ Litigant’s Sprawling TCPA Lawsuit On Personal Jurisdiction Grounds

Patrick Michaud sued a Florida home improvement company and a salesperson in Middlesex Superior Court, Massachusetts. He asserted various TCPA and state-law equivalent claims. The Defendants moved the case to federal court and then moved to dismiss for lack of personal jurisdiction. The Court agreed with Defendants and dismissed the case. Michaud v. Solomon, 20-cv-11999-DJC, 2021 U.S. Dist. LEXIS 102076 (D. Mass. May 29, 2021). The decision is a useful reminder that all TCPA defendants should carefully consider jurisdiction when facing a lawsuit in a locale far removed from their business operations.

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Nevada Medical Debt Bill Clears Governor’s Desk

On June 2, Nevada Gov. Steve Sisolak signed S.B. 248 , which requires a collection agency to notify a consumer before taking any action to collect a medical debt and prohibits certain practices relating to the collection of medical debt.

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Attorney General Ashley Moody issues tips to avoid phantom debt collector scams

TALLAHASSEE, Fla. (WCTV) - In her most recent Scams at a Glance video, Florida Attorney General Ashley Moody issued tips to avoid phantom debt collectors. Phantom debt is debt that doesn’t exist or has already been paid in full. Moody said that phantom debt scammers often pose as legitimate creditors or company representatives attempting to collect valid debts. Phantom debt scammers call targets and claim money is still owed and must be paid immediately.

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FTC Sends More Than $172 Million in Refunds to Consumers Misled by Rent-To-Own Provider Progressive Leasing

The Federal Trade Commission is returning more than $172 million to consumers who overpaid for merchandise they purchased using rent-to-own plans provided by Progressive Leasing. More than two million consumers will receive refund checks.

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Facebook, Inc. v. Duguid Limits the Definition of “Autodialer” Under the Telephone Consumer Protection Act

On April 1, 2021, the United States Supreme Court issued an opinion in Facebook, Inc. v. Duguid, clarifying the definition of automated telephone dialing system (“autodialer” or “ATDS”) under the Telephone Consumer Protection Act ("TCPA"). Noah Duguid sued Facebook under the TCPA, alleging that he received repeated texts in 2014 from Facebook notifying him of an attempted log-in even though he did not have an account.

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Transworld Systems Inc. completes acquisition of Account Control Technology Holdings, Inc., cementing the company’s position as the largest Accounts Receivable Management (ARM) company in the United States

LAKE FOREST, Ill., June 4, 2021 /PRNewswire/ --Transworld Systems Inc. (TSI), the largest U.S. technology-enabled provider of accounts receivable management (ARM) solutions, announced today it has completed its acquisition of Account Control Technology Holdings, Inc. (ACT Holdings), a leading debt recovery, ARM and business process outsourcing company. Transaction terms were not disclosed.

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CFPB Issues Rule Delaying the Mandatory Compliance Date of the New General Qualified Mortgage Final Rule

On April 27, the Bureau of Consumer Financial Protection (CFPB) issued a final rule to delay the mandatory compliance date for the General QM Final Rule until October 1, 2022. The CFPB stated that it issued the rule “to help ensure access to responsible, affordable mortgage credit and to preserve flexibility for consumers affected by the COVID-19 pandemic and its economic effects.” The mandatory compliance was originally set for July 1.

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Fixed-rate student loan refinancing tick up from record lows in early May

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans into 10-year fixed-rate loans began trending upward toward the end of May 2021, after hitting multiple record lows in late April and early May. Still, rates continue to represent a bargain compared to this time last year when 10-year rates topped 4%.

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Frozen But Not Forgiven, U.S. Student Loans Are Coming Due Again Soon

(Bloomberg) -- For millions of Americans, there’s an unwelcome side of the return to business-as-usual after the pandemic: They’ll have to start repaying their student loans again. More than 40 million holders of federal loans are due to start making monthly instalments again on Oct. 1, when the freeze imposed as part of Covid-19 relief measures is due to run out. It covered payments worth about $7 billion a month, the Federal Reserve Bank of New York estimated. Their resumption will eat a chunk out of household budgets, in a potential drag on the consumer recovery.

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Electronic Fund Transfers FAQs

This is a Compliance Aid issued by the Consumer Financial Protection Bureau. The Bureau published a Policy Statement on Compliance Aids, available here, that explains the Bureau’s approach to Compliance Aids.

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Industry Events

 
RMAI Executive Summit

Receivables Management Association International

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August 02 - 04 , 2021

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May 11 - 13 , 2022

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