At a glanceWednesday, February 08, 2023

Collection Industry News At A Glance - February 8, 2023
Wednesday February 8, 2023
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CFPB Releases Rule Proposal on Credit Card Late Fees

The bureau started its push for regulating fees in 2022 and now seeks to significantly decrease the ability to recoup fees through a rulemaking.

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Illinois Federal Court Dismisses CFPB’s Case Against Townstone Financial, Finding ECOA Does Not Extend to Prospective Applicants

On February 3, an Illinois federal court dismissed a case brought by the Consumer Financial Protection Bureau (CFPB) against Townstone Financial, Inc., a Chicago mortgage lender, for alleged violations of the Equal Credit Opportunity Act (ECOA) for purportedly discouraging prospective African American applicants in the Chicago metropolitan area from applying for mortgages.

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Banks’ overdraft/NSF fee revenue declines significantly compared to pre-pandemic levels

Third quarter of 2022 is down more than 40% compared to third quarter of 2019, suggesting $5B reduction in fees on annual basis.

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AG Platkin Announces Several Violations at Businesses for Not Accepting Cash and Charging a Credit Card Surcharge Without Required Notice

Newark – Attorney General Matthew J. Platkin today announced that four businesses throughout the state have been issued notices of violation for either not accepting cash or for charging a credit card surcharge without properly notifying consumers. Merchants in New Jersey must give consumers the option to pay cash. Merchants must also disclose total selling price—including any surcharges for using credit cards, debit cards, or pre-paid cards.

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CFPB Settlement With Debt Collection Law Firm Suggests Heightened Standard for Attorney Involvement

The Consumer Financial Protection Bureau (CFPB) has reached a settlement with a debt-collection law firm, Forster & Garbus, LLP, and the resulting order could signal major changes for all parties involved in collecting consumer accounts. 

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New York Adopts Final Commercial Financing Disclosure Regulations

On February 1, NY DFS announced the adoption of the final regulation implementing the New York State Commercial Finance Disclosure Law (CFDL) (N.Y. Fin. Serv. Law §§ 801 to 812). The regulations require companies that offer commercial financing less than or equal to $2.5 million (providers) to make standardized disclosures about the commercial financing’s credit terms to recipients of the commercial financing (recipients).

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Financial Data Privacy Bill Draft Slated for House Hearing

The House Financial Services Committee Subcommittee on Financial Institutions and Monetary Policy will review a discussion draft of a financial data privacy bill from U.S. Rep. Patrick McHenry, R-N.C., during a hearing Feb. 8.

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Statement of CFPB Director Rohit Chopra on Mortgage Comparison Shopping in a Time of Higher Interest Rates

Homebuying, refinancing, or cashing out equity can be grueling processes with tens of thousands of dollars on the line. Over the last year, mortgage interest rates have increased rapidly, adding to the stress of homebuying. Given these higher rates, it has become more important than ever for Americans to shop and compare products.

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CFPB Issues Guidance to Protect Mortgage Borrowers from Pay-to-Play Digital Comparison-Shopping Platforms

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion to protect Americans from double dealing on digital mortgage comparison-shopping platforms. Companies operating these digital platforms appear to shoppers as if they provide objective lender comparisons, but may illegally refer people to only those lenders paying referral fees.

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What Is the Average Credit Card Debt in the US?

Carrying thousands in credit card debt has become normal for many Americans. The average credit card balance is $5,589, according to a 2022 Experian report. Last year, total credit card debt in the US rose by $38 billion from Q2 to Q3, according to the Federal Reserve Bank of New York. With high inflation driving up the cost of everyday essentials, it's not surprising that some are turning to credit cards to finance purchases.

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U.S. court revives CFPB prepaid rule on fees, in defeat for PayPal

Feb 3(Reuters) - A U.S. appeals court has revived a U.S. Consumer Financial Protection Bureau rule governing how providers of digital wallets disclose commonly used fees to prepaid customers.

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Department of Education Releases New Data Showing the American Rescue Plan and Other Pandemic Relief Funds Kept Millions of College Students Enrolled in School

Today, the U.S. Department of Education (Department) released new data estimating that more than 18 million students have received direct financial aid under the Higher Education Emergency Relief Fund (HEERF) since the start of 2021. Over that period, nearly 6 million community college students received direct financial aid, along with more than 450,000 students at Historically Black Colleges and Universities (HBCUs), more than 24,000 students at Tribally Controlled Colleges and Universities (TCCUs), and nearly 8 million students at Minority Serving Institutions (MSIs), such as Hispanic Serving Institutions.

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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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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 -