At a glanceFriday, September 21, 2018

Collection Industry News At A Glance - September 21, 2018
Friday September 21, 2018
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In Major TCPA Win for Plaintiffs, Ninth Circuit Adopts Broad Definition of Autodialer

In a major victory for plaintiffs pursuing claims related to robocalls and texts, a federal appellate court panel has adopted an expansive view of the legal definition of an autodialer.  Under the Telephone Consumer Protection Act, calls made via an “automatic telephone dialing system,” or ATDS, without the receiver’s consent can carry statutory penalties between $500 and $1,500 per violation.  On Thursday a unanimous three-judge panel of the U.S. Court of Appeals for the Ninth Circuit found that under the definition of an ATDS outlined in the statute, the devices can include autodialers “with the capacity to dial stored numbers automatically” rather than just those that are able to generate numbers randomly or sequentially.

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Freezing your credit is now free

You can now add credit-report freezes to the list of best things in life that are free. As of Friday, consumers won't have to pay a fee to credit-reporting firms when they want to use a freeze to help protect themselves from identity theft. They would, however, need to contact each of the big three bureaus — Equifax, TransUnion and Experian — to cover all their bases. "I think this is a good partial step," said John Ulzheimer, a credit expert and president of The Ulzheimer Group in Atlanta.

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5 cyber security basics you can’t afford to ignore

The recently discovered vulnerability involving fax lines on HP multi-function devices, termed Faxploit, are a reminder of the importance of fundamental security practices.  I did something a few weeks ago I rarely do: ignore a report about a significant vulnerability. Check Point Software released a very detailed analysis about the possibility of a network being attacked via a fax line. Perhaps it was disbelief, or alert fatigue, but I remember thinking that if a bad actor could attack a network using just a fax line, it was time for me to retire and take up chicken farming. As such, I ignored it for a few days.

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Banking: Wells Fargo, Chime, Empower banks fight for millennial accounts

Are you between 21 and 37? Please bank with us.  That’s the message millennials are hearing as the battle between the big banks and fintech companies for their hearts and deposits heats up. The newest entrant in the fray – personal finance app Empower – upped the ante this week by rolling out its mobile bank services, including a fee-free checking account with rewards and a savings account that earns significant larger yields than at the big banks. The move comes shortly after Chase began dangling 60,000 rewards points to get more well-heeled young people to sign up for a premium checking account.

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Maryland and Texas Men Indicted for Alleged $364 Million Ponzi Scheme—One of the Largest Ever Charged in Maryland

Baltimore, Maryland – A federal grand jury has indicted three men on charges of conspiracy, wire fraud, identity theft, and money laundering, arising from an alleged $364 million investment fraud scheme.  The indictment was returned under seal on September 11, 2018, and unsealed on September 18, 2018, upon the arrests of the defendants.  Charged in the indictment are:

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NAFCU retells bureau: Consumer complaints shouldn’t be public

NAFCU President and CEO Dan Berger, in a letter Wednesday, agreed with Bureau of Consumer Financial Protection Acting Director Mick Mulvaney's position that the bureau is not statutorily required to "run a Yelp for financial services sponsored by the federal government."   "Publication of unverified consumer narratives can have long-lasting effects on a credit union’s reputation, resulting in fewer members, market share, and potentially resulting in more time-consuming examinations," Berger wrote as he reiterated that the bureau should remove its consumer complaint database from public view.

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Mulvaney plans to move some consumer bureau staff to new Atlanta office

The Consumer Financial Protection Bureau (CFPB) plans to relocate a group of employees from Washington, D.C., to a new satellite office in Atlanta in an effort to reduce costs.   Acting CFPB Director Mick Mulvaney is seeking to open the regional office to host a small number of analysts and managers who work with agency examiners assigned to financial institutions in the southeast United States, according to a senior agency official familiar with the plans. The staffers would be moved from a CFPB office in downtown Washington, near the bureau’s headquarters, to a building in Atlanta owned by the General Services Administration.

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As industry shifts to technology, BMO Harris Bank is cutting face-to-face mortgage lenders

BMO Harris Bank is eliminating most mortgage loan officers who meet customers face to face and now directs people who want to buy a house or refinance to its centralized mortgage call center.   The Chicago-based bank said the move — and a new online mortgage application platform coming soon — reflects changing customer behavior trends and actually offers time and ease benefits for mortgage applicants.

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Two-thirds of Amazon Prime members would try banking with the retailer, according to Bain study

Banks, you've been warned.  About two-thirds of Amazon Prime members would try a free online bank account from the e-commerce giant, according to a report from consultant Bain & Co. That's considerably higher than the percentage of regular Amazon customers (43 percent) or non-Amazon customers (37 percent) who would try an account, indicating strong loyalty to the Prime bundle of services.  Expectations have been high since it was reported in March that Amazon is in talks with banks including J.P. Morgan Chase and Capital One to create a checking-account-like product for its customers.

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New research report on the geography of credit invisibility

Creditworthy consumers can face difficulties accessing credit if they lack a credit record that is treated as "scorable" by widely used credit scoring models. These consumers include those who are "credit invisible," meaning that they do not have a credit record maintained by one of the nationwide consumer reporting agencies (NCRAs). They also include those who have a credit record that contains either too little information or information that is deemed too old to be reliable. The Bureau published two previous Data Points about consumers with limited credit histories. The first, Credit Invisibles, estimated the number and demographic characteristics of consumers who were credit invisible or had an unscorable credit record. The second, Becoming Credit Visible, explored the ways in which consumers establish credit records. 

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S&P/Experian Consumer Credit Default Indices Show Default Rates Stable In August 2018

NEW YORKSept. 18, 2018 /PRNewswire/ -- S&P Dow Jones Indices and Experian released today data through August 2018 for the S&P/Experian Consumer Credit Default Indices. The indices represent a comprehensive measure of changes in consumer credit defaults and show that the composite rate was one basis point higher than last month, at 0.87%. The bank card default rate dropped four basis points to 3.52%. The auto loan default rate increased one basis point to 0.97%. The first mortgage default rate was up two basis points, to 0.65%.

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Neustar Launches New Outbound Dialing Solution to Transform Contact Center Operations

Neustar®, Inc., the leading trusted, neutral provider of real-time information services, today announced that it has released a brand newOutbound Dialing solution, aimed at optimizing and de-risking outbound dialing. One of the first comprehensive solutions of its kind brings together Neustar’s Operational IntelligenceCompliance IntelligenceFraud Intelligence, and Branded Contact Management capabilities todramatically improve right-party contact (RPC) rates and mitigate fraud and compliance risks.

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Equifax: First Mortgage Originations Continue Steady Rise, Reaching over $680 Billion in Total Balance

ATLANTASept. 18, 2018 /PRNewswire/ -- First mortgage originations have continued to show a slight but steady increase, with more than 2.77 million first mortgages originated year-to-date through May 2018, reflecting a total dollar amount of $689.8 billion during this period, according to data from the latest Equifax (NYSE :EFX ) National Consumer Credit Trends Report. The latest report also found:

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A Decade On, Lending Transformed By Crisis And Innovation

The rise of FinTech offers a bit of a prism through which to view those events. The traditional banking model may be disrupted, or about to be disrupted, depending on where you look. But a standstill in the credit markets created a vacuum for a bit, at least along traditional lending conduits. Yes, the government(s) stepped in around the world, and here in the United States, $1.5 trillion in stimulus came across to all sorts of financial institutions over the ensuing five years, helping to open some spigots.

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NAFCU to Senate Banking: Fintechs, FIs should be on level playing field

NAFCU's Brad Thaler, in a letter ahead of today's Senate Banking Committee hearing on fintech, called on lawmakers to "ensure that when fintechs compete with regulated financial institutions, they must do so on a level playing field where smart regulations and consumer protections apply to all actors in that space."  Thaler, NAFCU vice president of legislative affairs, sent the letter to committee Chairman Mike Crapo, R-Idaho, and Ranking Member Sherrod Brown, D-Ohio. He highlighted that credit unions work with fintech companies to improve services and products offered to members.

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FTC Shuts Down Purveyors of Fake Documents Used for Fraud, Identity Theft

The operators of websites that sold fake documents used to facilitate identity theft and other frauds have agreed to permanently shut down their businesses as part of separate settlements with the Federal Trade Commission.   In separate cases filed by the FTC, the Commission alleged that Katrina Moore, Steven Simmons, and George Jiri Strnad II and their affiliated companies operated websites that sold customers a variety of fake financial and other documents – such as pay stubs, income tax forms, and medical statements – which can be used to facilitate identity theft, tax fraud, and other crimes.

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This new phishing attack uses an old trick to steal passwords and credit card details

A new phishing campaign is using an old trick in an effort to steal login credentials, payment details and other sensitive information from victims by claiming to offer them a tax refund which can only be claimed online.  The message claims to be the UK government's tax office, HMRC, and tells potential victims that they're due a tax refund of £542.94 "directly" onto their credit card.

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A lawsuit seeks to block implementation of the CFPB’s small dollar rule

The trade group representing payday lenders has asked a court for an injunction to block implementation of the Consumer Financial Protection Bureau's (CFPB) small dollar loan rule. The rule requires payday lenders to, among other things, determine whether a borrower has the means to repay the loan -- a standard to which traditional lenders are held. The Community Financial Services Association of America (CFSA) says the rule, drafted by the Obama administration, is causing payday lenders to lay off employees and close stores.

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Education Dept. Blocked From Canceling Debt Collection Contracts

A federal court last week blocked the Education Department's plans to cancel contracts with debt collection firms handling defaulted student loans.  The decision to drop the debt collectors was part of a broader overhaul of loan servicing pursued by the Office of Federal Student Aid. But Judge Thomas Wheeler of the U.S. Court of Federal Claims found that the department's justification for canceling the contracts was "slipshod" and that its alternative -- a plan to offer more enhanced servicing to borrowers before they default -- included scant details.

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Governor Edmund G. Brown Jr. announced that he has signed the following bill

AB 38, Mark Stone. Student loan servicers: licensing and regulation: Student Loan Servicing Act.  Existing law, operative July 1, 2018, establishes the Student Loan Servicing Act to provide for the licensure, regulation, and oversight of student loan servicers by the Commissioner of Business Oversight, who is the head of the Department of Business Oversight. The act prohibits a person from engaging in the business of servicing a student loan in this state without a license, unless the person falls within certain exceptions.

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FTC shuts down real estate websites that allegedly preyed on Section 8 renters

The Federal Trade Commission shut down a series of real estate websites that allegedly targeted Section 8 voucher recipients and falsely promised “exclusive” access to rental listings in exchange for a monthly or weekly subscription fee. According to the FTC, two brothers, Steven and Kevin (Kaveh) Shayan, owned four companies and operated a series of real estate websites that offered prospective renters “hundreds of thousands of accurate, up-to-date, and available listings” if they paid a fee to access the listings, when the opposite was allegedly the case.

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FIL-49-2018 September 17, 2018 Interagency Statement Clarifying the Role of Supervisory Guidance

Summary: The FDIC, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Bureau of Consumer Financial Protection, and the National Credit Union Administration (the
agencies) jointly have issued a statement to explain the role of supervisory guidance and to describe the agencies’ approach to supervisory guidance.

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‘Fintech’ Firms Fueling Rise of Personal Loans, Experian Says

Personal loans are the “fastest-growing type of consumer debt” in the past year, according to data from Experian.   Personal loan debt reached $273 million in the second quarter, an 11 percent increase, compared to the same quarter in 2017. That percentage growth is bigger than auto, credit cards, mortgages, and student loan debt, Experian says.

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BCFP Office of Innovation proposes “disclosure sandbox” for fintech companies to test new ways to inform consumers

This week, the Bureau’s new Office of Innovation took action to further the Bureau’s statutory mandate to ensure that markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation. The Office proposed the creation of a Disclosure Sandbox through revisions to the Bureau’s existing policy to encourage trial disclosure programs. The existing policy was established in 2013, although the Bureau has not approved any trial disclosures. The revised policy is based on the same statutory authority as the existing policy, which allows the Bureau to deem a covered person conducting a trial disclosure program to be in compliance with or exempt from a requirement of a Bureau rule or certain federal laws. 

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Attorney General Becerra: DeVos Keeps Students in the Dark When It Comes to Predatory For-Profit Schools

SACRAMENTO — California Attorney General Xavier Becerra, in a multistate letter with 21 attorneys general, today denounced the U.S. Department of Education’s proposal to eliminate gainful employment regulations that protect students from scams by for-profit schools. The 2014 Gainful Employment Rule requires that educational programs at for-profit colleges produce graduates who earn enough to pay back the debt incurred from attending the program. The rule was created in response to evidence from Federal and State investigations that for-profit schools had engaged in aggressive, deceptive marketing and recruiting by misrepresenting the potential earnings a student could expect to receive after graduation. 

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N.Y. Sues Comptroller of Currency Over Fintech Charter Decision

(Bloomberg) -- New York sued the U.S. over a decision to allow financial technology companies to apply for special national banking charters, saying the move is "lawless" and "ill-conceived" and will destabilize financial markets that are more effectively regulated by the state.   Maria Vullo, superintendent of the state’s Department of Financial Services, filed the lawsuit against the Office of the Comptroller of the Currency in federal court in Manhattan on Friday, asking a judge to declare that the move exceeds the authority of the office and to block it from proceeding.

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AG Healey and Local Students Win Federal Court Ruling Against Education Secretary Devos for Axing Student Loan Protections

BOSTON — Massachusetts Attorney General Maura Healey and two Boston-area students won a victory in federal court against Education Secretary Betsy DeVos after challenging the U.S. Department of Education’s plan to scrap federal protections for students cheated by predatory, for-profit schools. The opinion called Secretary DeVos’ actions “unlawful,” “arbitrary and capricious” and “procedurally invalid,” and ordered an immediate hearing in Washington, D.C to determine remedies.

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UK Payday Lenders Concerned About Rise in Claims

The once booming payday loan industry in the UK has taken a dramatic turn following the rise of compensation claims. The industry which was worth around £2 billion in 2013, has recently seen a huge overhaul following the introduction of stricter regulation by the FCA which has included a daily price cap of 0.8% and a limited default fee of £15.

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Industry Events

 
Auto Finance Summit 2018

Auto Finance News

Wynn Las Vegas 3131 S Las Vegas Blvd
Las Vegas , NV
October 24 - 26 , 2018

(212) 564-8972 Option 4

LendIt Fintech Europe 2018

LendIt Conference LLC.

Business Design Centre 52 Upper Street
Ilsington London , England
November 19 - 20 , 2018

(646) 930-6366

Collection & Recovery Solutions 2019

Resource Management Services, Inc.

10440 Pioneer Bl;vd. #2
Santa Fe Springs , CA
May 08 - 10 , 2019

562-906-1101

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