At a glanceWednesday, March 30, 2022

Collection Industry News At A Glance - March 30, 2022
Wednesday March 30, 2022
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Articles

 
CFPB Sanctions Edfinancial for Lying about Student Loan Cancellation

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today sanctioned Edfinancial Services, a student-loan servicer, for making deceptive statements to student loan borrowers and misrepresenting their forgiveness and repayment options to them. Edfinancial deceived borrowers, with Federal Family Education Loan Program (FFELP), loans about their eligibility for Public Service Loan Forgiveness (PSLF). The Bureau is ordering the company to contact all affected borrowers, provide them with accurate information, and pay a $1 million civil money penalty.

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CCPA Data Privacy Trends Report: Data Subject Requests Indicate California Consumers Are Quick To Assert Their Privacy Rights

The 2022 Data Privacy Trends Report from privacy management platform DataGrail examines the ongoing impact of the California Consumer Privacy Act (CCPA), and finds that consumers are taking full advantage of these expanded rights to protect their privacy. Among other metrics, data subject requests doubled from 2020 to 2021 and more people are asking for data deletion and to opt out of the sale of their data to third parties.

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California DFPI Shares Progress on Implementing Consumer Financial Protection Law

A year after implementing one of the most expansive consumer protection laws in the U.S., California’s Department of Financial Protection and Innovation (DFPI) announced it has collected close to $1 million in restitution for consumers, fielded hundreds of additional complaints related to the law, and launched more than 100 investigations using its expanded authority under the California Consumer Financial Protection Law (CCFPL), according to a news release.

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Sun Sets on Increased Subchapter V Debt Limit for Now

A key bankruptcy-related response to the pandemic has ended as the increased debt limits under subchapter V of chapter 11, passed by Congress in the CARES Act, have expired. In an effort to provide bankruptcy relief and access to subchapter V of chapter 11 of the Bankruptcy Code to a greater number of small businesses, Congress raised the debt limit for subchapter V eligibility from the original $2,725,625 to $7.5 million via the CARES Act, passed in March of 2020.

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CFPB’s Chopra Proposes Structural Remedies for Repeat Offenders

In a speech at the University of Pennsylvania Monday (March 28), Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra urged regulators and enforcers, including the CFPB, to step up their game against repeat offenders — and in particular, against large financial institutions. The tone of the speech was hard, and it didn’t spare anybody involved in the financial markets. From the beginning, it accused companies of not doing enough to comply with the rules, but it also had a message to regulators for years of “lax enforcement.”

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Dismantling Unjust Interest Rates for Debt Collection Judgments

The costs of credit and debt collection, which are inextricably linked, are frequent battlegrounds for consumer financial products and services regulation.

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Attorney General Bonta, Senator Talamantes Eggman, and Senate President Pro Tempore Atkins Announce Legislation to Strengthen Consumer Protections for Military Service Members

SACRAMENTO – California Attorney General Rob Bonta, Senator Susan Talamantes Eggman (D-Stockton), and Senate President pro Tempore Toni Atkins (D-San Diego) today announced Senate Bill 1311 (SB 1311), which will extend additional legal and financial protections for active duty and reserve component service members and their families. SB 1311, jointly authored by Senator Talamantes Eggman and Pro Tem Atkins, and sponsored by Attorney General Bonta, stems from the California Department of Justice’s investigation and prosecution of businesses that have targeted service members and military families. It also draws from previous discussions between the Attorney General and military personnel, JAG legal assistance attorneys, command financial counselors, and other members of the military and veterans community, including a July 2021 roundtable event at Naval Base San Diego. If passed, the bill would establish stronger consumer protection laws for California’s service members. 

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Attorney General James Warns Debt Collectors of New State Regulations Banning Lawsuits on Old Debts

NEW YORK – New York Attorney General Letitia James sent letters to the largest credit card companies and major debt collectors operating in New York, warning them of new state regulations that prevent them from suing consumers for old debts. The Consumer Credit Fairness Act of 2021 — which was signed into law last November — will go into effect next month and reduces the statute of limitations for consumer debt collection from six years to three years

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AG: New NYS regulations ban lawsuits on old debts

ALBANY, N.Y. (NEWS10) – New York Attorney General Letitia James sent letters to the biggest credit card companies and debt collectors operating in the state, warning them of new state regulations that prohibit lawsuits for old debts. The Consumer Credit Fairness act of 2021 will go into effect next month and will reduce the statute of limitations for consumer debt collections from six years to just three years.

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Credit card late fees

Prior to the COVID-19 pandemic, consumers had steadily been paying more in credit card late fees each year—peaking at over $14 billion in 2019. Late fees assessed by issuers declined to about $12 billion in 2020 given record-high payment rates and public and private relief efforts. Even during the pandemic, late fees accounted for over one-tenth of the $120 billion consumers pay in credit card interest and fees annually. In 2021, late fees were on the rise again.

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CFPB Finds Credit Card Companies Charged $12 Billion in Late Fee Penalties in 2020

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) issued a report today showing that credit card issuers charged $12 billion in late fees in 2020. Late fee penalties are charged in addition to interest when a cardholder does not make the minimum payment by the due date.

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CFPB should study, appropriately regulate ‘buy now, pay later’ products

The Consumer Financial Protection Bureau should carefully examine and regulate “buy now, pay later” (BNPL) companies, CUNA wrote to the Consumer Financial Protection Bureau (CFPB) Friday. The CFPB issued a request for information on BNPL products, following an inquiry into five companies offering the products.

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How mortgage lenders are approaching a changed spring season

Originators produced a record $4.4 trillion in volume last year, reaching an all-time high purchase lending and a 17-year high in cash-out refinances. But today, the mortgage industry faces headwinds on many fronts, including rising mortgage rates and seemingly unstoppable home price growth with a current average of nearly $364K nationwide, according to Redfin. Residential construction lending is up but the pipeline has a long way to go in alleviating supply.

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NEW LEGISLATION STREAMLINES ARIZONA’S FINANCIAL SERVICES LICENSING REQUIREMENTS

Phoenix, AZ - The Department of Insurance and Financial Institutions (DIFI) applauds the passage and signing of Senate Bill 1394, legislation proposed by DIFI that will streamline decades-old licensing requirements for businesses that currently must obtain separate licenses for trade names or assumed names - sometimes referred to as, “Doing Business As” or DBAs. 

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The IRS’ Privatized Debt Collection Program Is Bringing In Less Revenue Than Expected and Underreporting Costs

A program Congress authorized in 2015 for the Internal Revenue Service to outsource the collection of some outstanding tax debt has brought in only about half as much money as projected, according to a new audit, while racking up costs the agency has not properly reported. 

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Attorney General Bonta: CFPB Should Scrutinize Buy-Now-Pay-Later Financing to Address Compliance with Consumer Protection Laws

OAKLAND – California Attorney General Rob Bonta today, as part of a multistate coalition, urged the Consumer Financial Protection Bureau (CFPB) to closely scrutinize and initiate rulemaking to regulate Buy-Now-Pay-Later financing providers. Buy-Now-Pay-Later financing has exploded in popularity in recent years with the rise of online shopping, allowing consumers to pay for a purchase in installments instead of all at once. While these arrangements are often used for large purchases such as furniture, jewelry, and appliances, Buy-Now-Pay-Later financing is increasingly available for everyday expenses, such as filling up a tank of gas. While this financing is often advertised as a safe and affordable way to access credit, the coalition is concerned that this largely-unregulated financial product may instead trap vulnerable consumers into debt they are unable to afford and cause long-term damage to consumers' financial health.  

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Eighth Circuit Holds Text System That Randomly Selects Phone Numbers From Database Does Not Qualify as ATDS

On March 24, the Eighth Circuit Court of Appeals issued an opinion, upholding separate district court decisions finding that a system that sends promotional text messages to phone numbers randomly selected from a database of customer information is not an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act (TCPA). The concise opinion espouses a common sense reading of the word “produce,” finding that the word requires an ATDS to generate a random number, rather than to select a number randomly.

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CFPB Director Addresses the Final Report of the Interagency Task Force on Property Appraisal and Valuation Equity

The current leadership of the CFPB has not been shy about highlighting the importance of fair lending—and it is becoming increasingly clear that fair lending and equity within the financial services industry is one of the CFPB’s greatest priorities under Director Rohit Chopra. Just last month, the CFPB released a blog post to discuss possible discrimination in the appraisal process.

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CREDIT UNIONS – Study: Only 14% of Young Consumers Favor Credit Unions

When it comes to the bank versus credit union (CU) debate, it’s clear where the loyalty of younger consumers lies. A PYMNTS survey found younger consumers show a stronger preference for national banks than for CUs.

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CFPB Extends Opportunity for Public to Provide Input on Junk Fees

We have received a tremendous amount of feedback from our Request for Information on exploitive junk fees. The more than 25,000 comments we have received through mid-March show the high-level of public interest on this topic, and the number of people affected by exploitative junk fees. We are extending the deadline for the public to share input and stories on their experiences with exploitative junk fees through April 11, 2022.

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Robocall Facilitators Must Cease and Desist

The FCC Enforcement Bureau issued warnings to voice service providers that have apparently transmitted illegal robocalls on their networks. Recipients have 48 hours to stop facilitating this traffic or face all their traffic being blocked by other providers. The FCC has carefully constructed the tools necessary to take swift and impactful action against bad actors – this means not only possible fines when violations occur, but also business consequences for those removed from the Robocall Mitigation Database. To date, all recipients have quickly responded and committed to take actions to stop the flow of robocalls on their networks. That said, the FCC and its partners remain vigilant in monitoring these – and all – providers’ efforts to ensure unyielding compliance with consumer protection requirements going forward.

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Black Knight: February Uptick in Early-Stage Delinquencies Drives First Increase in Past- Due Mortgages in Nine Months; Foreclosure Starts Fall 24% Following January Spike

Though past-due loans edged higher (+1.8%) in February, the national delinquency rate remains near pre-pandemic levels heading into March, which typically sees strong seasonal performance improvements.

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11 House members send 7 questions to CFPB about vehicle repossessions

The American Financial Services Association highlighted that 11 members of the U.S. House sent a letter to the Consumer Financial Protection Bureau containing seven questions triggered by the regulator saying it is “moving to thwart illegal repossessions in the heated auto market.”

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Emergency Savings and Financial Security: Insights from the Making Ends Meet Survey and Consumer Credit Panel

This report examines how consumers’ financial profiles vary by levels of emergency savings. We use a new version of the Making Ends Meet survey and pair it with credit bureau data from our Consumer Credit Panel to provide a unique picture of consumers' financial profiles not available through research outside the CFPB. These rich data reveal much about the current state of consumer finances in the wake of an especially turbulent period, triggered by the COVID-19 pandemic, in which Americans from all walks of life experienced unexpected changes, emergencies, dips in income, and expense shocks.

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CFPB issues guidance regarding illegal consumer review practices

The Consumer Financial Protection Bureau (CFPB) said it has issued policy guidance to address potentially illegal practices related to consumer reviews.

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Industry Events

 
Collection and Recovery Solutions 2022

Resource Management Services, Inc.

Our live Collection and Recovery Solutions event will be held May 25 – 27 at the Four Seasons in Las Vegas. We hope you can join us! Our team can always be reached at crs@resourcemanagement.com

May 25 - 27 , 2022

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