At a glanceFriday, February 03, 2023

Collection Industry News At A Glance - February 3, 2023
Friday February 3, 2023
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U.S. credit card debt jumps 18.5% and hits a record $930.6 billion

For most Americans, inflation and rising interest rates are a one-two punch. On the heels of another rate hike this week by the Federal Reserve, credit card annual percentage rates are already near 20%, on average, and set to climb even higher. At the same time, more consumers are leaning on credit to afford increasingly expensive necessities, like food and rent.

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FTC Should Extend Comment Period on Non-Compete Clause Proposal. Here’s Why

The FTC is proposing to ban most noncompete agreements for employers in a rule that would preempt state law. It should take more time to consider the impact of the proposal and to process stakeholders’ comments.

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Parents pay at least one monthly bill for 40 percent of millennials

In a new survey, two-fifths of millennials say their parents still pick up one or more of their monthly bills. And the most common parental subsidy is the largest: housing. Twenty-four percent of millennials say Mom or Dad pay their rent, and 17 percent say parents cover a mortgage.

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Subprime Delinquencies Show Pressures of Paycheck-to-Paycheck Life

Rising delinquencies among subprime and near-prime borrowers reveal the strain of living paycheck to paycheck. In a spate of earnings reports these past few weeks, various lenders — banks and digital platforms among them — have spotlighted the fact that delinquencies and charge-offs are ramping back up, off pandemic lows, rapidly. And though many of these companies state that their lending portfolios’ metrics are manageable, and indeed are normalizing, the trends bear watching.

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Citizens Bank continues auto-loan pullback

The lender aims to scale its portfolio in that segment back to between $5 billion and $6 billion by 2024, CEO Bruce Van Saun told Reuters. That’s down from $14.5 billion in December 2021.

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Litigation activity picked up a bit for an end-of-year rally as FDCPA complaints (+11.2%) hit double digits over last month and FCRA complaints (+8%) were also up more than usual. TCPA complaints (-32.4%) were still down though, by a lot.

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CFPB Opens Comment on Nonbank Supervision in Proposed Rule on Registry of Contract Conditions

The Consumer Financial Protection Bureau has proposed a rule (PDF) that would create a registry on supervised nonbank entities with arbitration agreements in their contracts.

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Attorney General in $7.6 million settlement with Toyota Credit

Toyota Motor Credit Corp. will pay $7.6 million to settle allegations brought by the office of Attorney General Andrea Campbell that it engaged in unfair lending practices. Much of that money — about $5.5 million — will go toward wiping out debts owed to Toyota by as many of 500 borrowers in Massachusetts, according to the attorney general’s office.

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EEOC Hearing Explores Potential Benefits and Harms of Artificial Intelligence and other Automated Systems in Employment Decisions

WASHINGTON - Today, the U.S. Equal Employment Opportunity Commission (EEOC) held a public hearing to examine the use of automated systems, including artificial intelligence (AI), in employment decisions. Increasingly, employers are using automated systems to make employment decisions, including the recruitment, hiring, monitoring, and firing of workers.

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FTC to Host Public Forum Examining Proposed Rule to Ban Noncompete Clauses

The Federal Trade Commission will host a public forum on Thursday, February 16 examining the FTC’s proposed rule to prohibit employers from imposing noncompetes on their workers, and providing an opportunity for people to directly share their experiences with noncompetes.

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Only 27% of Americans Have Enough Savings to Cover More Than 6 Months of Living Expenses

Saving is an important financial goal, but many people put off their savings goals because they lack enough extra income. Do you have enough savings to be prepared for potential job loss or other life changes that may occur? A recent Consumer Financial Protection Bureau study found that only about 1 in 4 Americans could cover more than six months of living expenses if they lost their main source of income. This isn't good news.

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The CFPB Joins the FTC on Negative Option Marketing and Dark Patterns in New Circular

When it comes to negative options, the CFPB has strong opinions. As demonstrated in its new circular, these opinions generally align with those of the Federal Trade Commission (FTC), which has repeatedly targeted trial offers, subscription sales, and other programs involving recurring charges for enforcement.

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CFPB Proposes Rule to Rein in Excessive Credit Card Late Fees

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) proposed a rule to curb excessive credit card late fees that cost American families about $12 billion each year. Major credit card issuers continue to profit off late fees that are protected by an expansive immunity provision. Credit card companies have also relied on this provision to hike fees with inflation, even if they face no additional collection costs. The proposed rule would help ensure that over the top late fee amounts are illegal. Based on the CFPB’s estimates, the proposal could reduce late fees by as much as $9 billion per year.

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Some borrowers may qualify for a student loan interest deduction, despite payment pause

Fewer borrowers will be able to claim the student loan interest deduction for 2022, with federal loan payments on hold for the duration of the year. But some people may still qualify. Before the Covid pandemic, nearly 13 million taxpayers took advantage of the break, which allows borrowers to deduct up to $2,500 a year in interest payments they’ve made on their private or federal student loans.

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Director Chopra’s Remarks on Press Call for Credit Card Late Fees NPRM

Good afternoon. The Consumer Financial Protection Bureau is proposing a rule that we project will reduce credit card late fees paid by Americans by $9 billion each year. Our goal is to ensure that the credit card market is fair and competitive and that the credit card industry is properly following a 2009 law passed by Congress.

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How many in your state were approved for Biden’s student loan forgiveness?

(NEXSTAR) – A month before the Supreme Court is scheduled to hear arguments on two cases challenging President Joe Biden’s student loan forgiveness program, the White House released state-by-state data of the roughly 26 million Americans who applied for debt relief before the application closed late last year.

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Reg F Question of the Week: Are Debt Collectors Required to Use Their Legal or Registered DBA Name in a Limited-Content Message?

The Consumer Financial Protection Bureau has published Debt Collection Rule FAQs for Regulation F, containing questions and answers that pertain to compliance with the rule. The FAQs cover call frequency issues, electronic communications, limited-content messages and more.

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Colorado AG Secures Latest Settlement over Unearned GAP Fees

On January 4, the Colorado Attorney General announced that his office entered into assurances of discontinuance (available here and here) with two credit unions that will result in $4 million being refunded to Colorado borrowers who were entitled to refunds of guaranteed automobile protection (“GAP”) fees.

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DFPI Continues Crackdown on Debt Collection Scams

SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) announced today that it has issued enforcement actions against multiple debt collectors for unlicensed activity under the Debt Collection Licensing Act (DCLA) and unlawful and deceptive acts or practices in violation of the California Consumer Financial Protection Law (CCFPL).

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CREDIT CONTROL, LLC – First Place Ranking – Best Places To Work In Collections

St. Louis, MO January 31st – Credit Control, LLC (“Credit Control”) is proud to announce for the third year in a row, our employees have ranked us as winners in the Best Places to Work in Collections program. This is the company’s third time participating in the program with back-to-back #1 overall rankings in the large company category. The program includes a rigorous two-part blind survey process to determine the Best Places to Work in Collections. This included an evaluation of workplace policies, practices, philosophy, systems, and demographics. The second part consisted of an employee survey to measure the employee experience with direct, unfiltered employee input, including all Credit Control locations across the country.

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CFPB Report: ID Theft Among Servicemembers Increasing

n January 12, the CFPB released a report that identified an uptick in identity theft reported by servicemembers. The report found that military consumers (defined as active duty servicemembers, veterans, and military family members) reported almost 50,000 cases of identity theft to the FTC in 2021. Additionally, military consumer complaints to the CFPB for debts resulting from identity theft increased from about 200 in 2014 to more than 1,000 in 2022.

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Industry Stakeholders Push for Call Authentication Improvements at FCC

ACA International and coalition partners continue to support updates to the Federal Communications Commission’s call authentication framework that ensure legitimate calls are getting through, as noted in supplemental comments (PDF) to the FCC on call authentication solutions.

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CFPB Report Finds Credit Scores Improved During the COVID-19 Pandemic

Consumer credit scores improved during the COVID-19 pandemic, suggesting that pandemic-era mortgage forbearances, the federal student loan repayment pauses, and federal cash transfers that improved some consumers’ financial wellbeing drove the overall credit score increases, according to a report from the Consumer Financial Protection Bureau’s (CFPB) Office of Research.

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Small Banks Urge CFPB to Phase in Open Banking Tech Requirements

Smaller banks are urging the CFPB to consider a more gradual technological shift and weigh their cost burdens, as the regulator crafts a new “open banking” rule to ease consumers’ sharing of financial information. The Consumer Financial Protection Bureau’s open banking proposal aims to allow consumers to seamlessly switch between financial service providers by requiring banks and credit card companies to develop technology that consumers can use to share their financial data with fintechs and other upstart competitors. Public comments on the CFPB outline for its plans were due on Jan. 25.

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Portfolios For Sale

$2,731,738 Consumer Loans
BAL Financial LLC

(617) 595-5794

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Industry Events

RMAi 2023 Annual Conference

Join us in Las Vegas, February 6-9, for the 2023 RMAI Annual Conference.

Las Vegas , Nevada
February 06 - 09 , 2023

916 462 2462

Optimal Collection Performance – Training for Collection Managers & Supervisors

Teaching collection managers and supervisors techniques for maximizing performance of collectors - Compliance, Coaching and Accountability. Instructor: Ken Evancic

Four Seasons Las Vegas ,
May 08 - 09 , 2023


Collection and Recovery Solutions 2023

An invitation-only event for senior level Collection and Recovery Professionals

Four Seasons Las Vegas ,
May 10 - 12 , 2023

Mark Naiman -