At a glanceWednesday, January 11, 2023

Collection Industry News At A Glance - January 11, 2023
Wednesday January 11, 2023
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New Jersey reaches $27.3 million settlement with merchant cash advance operation

On January 3, the New Jersey attorney general announced a $27.4 million settlement with a private equity firm, its parent company, and six other associated companies (collectively, “respondents”) to resolve allegations related to violations of the New Jersey Consumer Fraud Act (CFA).

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CFPB Takes Action to Halt Debt Collection Mill From Bombarding Consumers with Junk Lawsuits

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) has reached a settlement in its lawsuit against law firm Forster & Garbus, LLP for illegal debt-collection practices. If approved by the court, the proposed settlement would prohibit Forster & Garbus from filing any new lawsuit against a consumer unless it has specific documents supporting the debt and certifies that an attorney reviewed those documents.

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Statement of CFPB Director Rohit Chopra on Proposed Registry of Supervised Nonbanks that Use Form Contracts to Impose Terms and Conditions that Seek to Waive or Limit Consumer Legal Protections

Today, the CFPB is proposing to create a registry of contract terms that financial companies use to censor their customers and force individuals into surrendering their legal rights.

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CFPB Proposes Rule to Establish Public Registry of Terms and Conditions in Form Contracts That Claim to Waive or Limit Consumer Rights and Protections

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) proposed a rule to establish a public registry of supervised nonbanks’ terms and conditions in “take it or leave it” form contracts that claim to waive or limit consumer rights and protections, like bankruptcy rights, liability amounts, or complaint rights.

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DFPI Debt Collection Advisory Committee

The DFPI will be soliciting applications for members to the Debt Collection Advisory Committee at the end of January.  Financial Code Section 100025 provides for a Debt Collection Advisory Committee:

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Americans lean more on credit cards as expenses stay high: 46% of cardholders now carry debt from month to month

As the personal savings rate sank near an all-time low, credit card balances jumped 15% year over year, according to the latest quarterly report from the Federal Reserve Bank of New York, notching the largest increase in more than 20 years.

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No License? No Standing! District Court Dismisses FDCPA Suit Against Unlicensed Debt Collector For Lack Of Standing

On January 4, the District Court of New Jersey dismissed a Fair Debt Collection Practices Act (FDCPA) complaint against an unlicensed debt collector for lack of standing. In Valentine v. Unifund CCR, LLC, et al., the court held that merely receiving a letter from an unlicensed debt collector is insufficient to establish a concrete injury for Article III purposes.

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What new supervised institutions need to know about working with the CFPB

While the CFPB has longstanding supervisory relationships with many institutions, we also conduct exams or other supervisory activities at companies for the first time. Here’s what newly supervised institutions can expect from a supervisory relationship with the CFPB.

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Federal Regulators Jointly Release New FDCPA Examination Procedures

On Dec. 15, 2022, the Federal Financial Institutions Examination Council’s (FFIEC) Task Force on Consumer Compliance adopted revised examination procedures for the Fair Debt Collection Practices Act (FDCPA) and its implementing regulation, Regulation F.

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New Proposed Regulations Would Transform Income-Driven Repayment by Cutting Undergraduate Loan Payments in Half and Preventing Unpaid Interest Accumulation

Today, the U.S. Department of Education (Department) proposed regulations to reduce the cost of federal student loan payments, especially for low and middle-income borrowers. The regulations fulfill the commitment President Biden laid out in August when he announced his Administration's plan to provide student debt relief for approximately 40 million borrowers and make the student loan system more manageable for student borrowers.

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End of student loan payment pause could lead to more credit card debt

The countdown until the student loan payment pause is lifted in June is ticking, and some experts worry that once payments resume, many Americans may dig themselves deeper into credit card debt.

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US car owners struggle as more loan payments climb above $1,000 a month

Almost 16 per cent of consumers who financed a new car in the fourth quarter have monthly payments reaching that level, up from 10.5 per cent a year earlier, according to data collected by Edmunds, a provider of data on the automotive industry.

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Credit card balances reached a record-setting $866 billion in the third quarter of last year, which represents a year-over-year increase of 19%.

Personal loans and credit card debt reached record levels in 2022 due to financial pressures brought on by high inflation and climbing interest rates, according to third-quarter data from a consumer credit reporting agency.

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CFPB adds six new items to Fall 2022 rulemaking agenda, including overdraft fees, fees for insufficient funds, and credit card penalty fees

The CFPB has published its Fall 2022 rulemaking agenda as part of the Fall 2022 Unified Agenda of Federal Regulatory and Deregulatory Actions.  The agenda’s preamble indicates that “[t]he Bureau reasonably anticipates having the regulatory matters identified [in the agenda] under consideration during the period from December 1, 2022 to November 30, 2023.”

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Pax­ton Peti­tions FCC to Bet­ter Pro­tect Con­sumers From Ille­gal Spam Texts

Attorney General Paxton joined a multistate comment letter to the Federal Communications Commission (“FCC”) to prevent consumers from receiving unwanted, illegal spam text messages.  

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Congressional Research Service Issues In Focus White Paper on Financial Cybersecurity

WASHINGTON, Jan. 7 -- The Congressional Research Service issued the following In Focus white paper on financial cybersecurity (No. IF11717) on Jan. 5, 2023, by financial economics analysts Andrew P. Scott and Paul Tierno.

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The FCC’s Ruling on Call Consent: Where Do We Go From Here?

A modified rule on call exemptions and obtaining consumers’ consent from the Federal Communications Commission will take effect this year, and ACA International is working on resources to help members meet their compliance responsibilities.

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Attorney General Phil Weiser announces Colorado borrowers will receive $4 million in settlement with Bellco and Canvas credit unions in GAP fee case

(The Center Square) – Coloradans who were to guaranteed automobile protection fee refunds from two credit unions will get $4 million in refunds from a recent settlement, Attorney General Phil Weiser's office announced.

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FTC Safeguards Rule: ACA and Industry Partners Seek Compliance Guidance

ACA International and joint industry trade groups are seeking detailed compliance guidance from the Federal Trade Commission on aspects of the Safeguards Rule.

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Statement from Secretary Cardona on Legal Brief Filed with the Supreme Court on the Student Debt Relief Program

U.S. Secretary of Education Miguel Cardona issued the following statement after the Departments of Education and Justice filed a legal brief with the Supreme Court on the Biden-Harris Administration’s Student Debt Relief Program:

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CFPB Files Amicus Brief in TILA Suit, Impacts How Banks Collect on HELOCs

Recently, the CFPB filed an amicus brief in the U.S. Court of Appeals for the Fourth Circuit arguing that the court should reinstate a borrower’s putative class action claim against a national bank. The CFPB argued that the district court erred by improperly narrowing a provision in Regulation Z of the Truth in Lending Act (TILA) that prohibits lenders from withdrawing from deposit accounts to cover debts caused by credit card plans.

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California Supreme Court Refuses To Hear Default Interest Case

On December 21, 2022, the California Supreme Court denied review of a controversial Court of Appeal decision from earlier last year that prohibited lenders from charging default interest against the principal balance of any loan, regardless of loan purpose, unless the default is a maturity default. 

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FTC Publishes Inflation-Adjusted Civil Penalty Amounts for 2023

The Federal Trade Commission has adjusted the maximum civil penalty dollar amounts for violations of 16 provisions of law the FTC enforces, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

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Mortgage demand plunges 13.2% to end 2022, as interest rates head higher again

Mortgage application volume was down 13.2% at the end of last week from two weeks earlier, according to the Mortgage Bankers Association’s seasonally adjusted index. The MBA was closed last week due to the holidays.

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FTC Proposes Rule to Ban Noncompete Clauses, Which Hurt Workers and Harm Competition

The Federal Trade Commission proposed a new rule that would ban employers from imposing noncompetes on their workers, a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.

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Office of Research Blog: Even as rents increase, fewer people are buying

The past two years of high inflation have been difficult for renters. In our recent report, Making Ends Meet in 2022, we found that nearly one third of renters did not pay or were late with the rent at least once in the last year. As we discussed in a previous blog post in this series, housing is a large share of overall expenditures and housing inflation has been a big part of recent inflation.

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Car Payments Top $1,000 for 1 in 6 Americans

Financing for a new or used vehicle is growing more expensive than ever, costing $1,000 or more for 15.7% Americans, according to Edmunds, a provider of automobile comparison costs.

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DFCU Financial Completes First Citrus Bank Acquisition

DEARBORN, Mich., January 3, 2023 ( Financial and First Citrus Bank have closed on their previously announced business combination and are now branded as DFCU Financial. This transaction creates a stronger and more comprehensive financial institution for its members.   

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CFPB Issues Report on Three Major Credit Reporting Agencies

The Consumer Financial Protection Bureau, under the leadership of Director Rohit Chopra, has released a new annual report on consumer complaint responses by the nationwide credit reporting agencies (CRAs).

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USDA Announces January 2023 Lending Rates for Agricultural Producers

WASHINGTON, Jan. 3, 2023 – The U.S. Department of Agriculture (USDA) announced loan interest rates for January 2023, which are effective Jan. 3, 2023. USDA’s Farm Service Agency (FSA) loans provide important access to capital to help agricultural producers start or expand their farming operation, purchase equipment and storage structures or meet cash flow needs.

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Paying off debt is top priority for many consumers in 2023: survey

Inflation, rising costs and the fear of recession have not derailed some Americans from sticking to their money goals this year, a new survey said. Despite the challenging economic environment, 42% of respondents said that paying off debt was their top priority in 2022, according to consumer financial app Cleo's 2022 Money Trend Report.

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