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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.

3 WAYS FINTECH STARTUPS ARE CHANGING THE ONLINE LENDING SPACE WITH LIZZIE DUNN

In major economies around the world, such as in the U.S. and U.K., small businesses employ about half of the working population. Their impact—financially as well as culturally—is enormous. But due to their lack of collateral and limited credit histories, small businesses don’t get the same opportunities to acquire funding as big corporations, or even individuals looking for personal loans. There has long been a disconnect between new, innovative small businesses and the financing they need to help them grow. Dubbed the Macmillan gap, this inability to bring together finance and industry was again exposed in the wake of the financial crisis.

HSBC launches digital mortgage platform with help from Roostify

One of the world’s largest banks is about to join the digital mortgage revolution, as HSBC Bank USA, the U.S. arm of HSBC Group, announced that it is partnering with Roostify to launch a digital mortgage platform.   Roostify, a multiple-time HousingWire Tech100 winner and leader in the digital lending space, uses technology that streamlines the mortgage process but also provides consumers with a human-centric approach.

THE AMBITIOUS PLAN BEHIND FACEBOOK’S CRYPTOCURRENCY, LIBRA

NEAR THE END of 2017, on a Dominican Republic beach with his family, Facebook executive David Marcus wrestled with a question he’d been pondering since his previous job as president of PayPal. How would you build the internet of money? A friction-free global digital currency would be a boon for the many people with mobile phones but no access to banking. And who better to develop something like this, he wondered, than Facebook, with its global reach and massive user base? Marcus, then head of Facebook Messenger, thought he had an answer. He texted his boss and told him it was time to talk about Facebook creating a cryptocurrency, saying that he had a clear view of how to do it, in a way that would earn trust even from those skeptical of Facebook. Marcus spent the next few days writing a memo that laid out his ideas. Facebook CEO Mark Zuckerberg quickly endorsed the plan, saying the approach synced with his ideas.

CFPB chief’s equal-opportunity calendar

In her first four and a half months on the job, Consumer Financial Protection Bureau Director Kathy Kraninger was no stranger to Capitol Hill, holding in-person meetings with lawmakers more than twice as often as her predecessor did during a similar time frame. Kraninger, who has been at the helm of the agency since December, met in person with 16 members of the House or Senate from Dec. 11 through the end of April, most of them in the lawmaker’s office. The meetings, posted as part of her public schedule that is available on the CFPB website, were held with 10 Republicans and six Democrats. Yet her schedule, part of a planned “listening tour” to hear from various stakeholders, suggests a concerted effort to meet with members from both parties, as well as a diverse array of consumer advocates, bankers and trade group representatives.

NY Attorney General Urges CFPB to Dismiss Proposed HMDA Rule

New York State Attorney General Letitia James urged the Consumer Financial Protection Bureau (CFPB) not to adopt its recently-proposed rule that would undermine the ability to enforce fair lending laws and prevent discrimination in the mortgage lending market.

Debt Collector Goes Bankrupt After Health Care Data Hack

(Bloomberg) — Retrieval-Masters Creditors Bureau Inc., whose business was blamed for a large-scale data breach that affected millions of Quest Diagnostics Inc. customers, filed for Chapter 11 protection, citing fallout from the security issue.   The company, which collects patient receivables for medical labs under the name American Medical Collection Agency, listed assets and liabilities of as much as $10 million in its bankruptcy petition filed in the Southern District of New York. It’s aiming to liquidate, the company said.