At a glanceFriday, February 10, 2023

Collection Industry News At A Glance - February 10, 2023
Friday February 10, 2023
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Credit card balances continued to grow in December, Fed report shows

Consumer credit card debt continued its growth streak in December, even as inflation continued to cool down. The pace of growth slowed down though, which may partially be due to increased holiday shopping and spending earlier in November.  

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FTC Staff Provides Annual Letter to CFPB On 2022 Equal Credit Opportunity Act Activities

The staff of the Federal Trade Commission has provided the Consumer Financial Protection Bureau (CFPB) an annual summary of its activities enforcing the Equal Credit Opportunity Act (ECOA).

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AG Campbell Announces $6.5 Million Settlement With Home Security Company for Improperly Charging Consumers on Auto Renewal Contracts

BOSTON — Attorney General Andrea Joy Campbell today announced that her office has reached a $6.5 million settlement, including $4.7 million in debt relief, with a Connecticut-based home security services company and its CEO to resolve allegations that they violated state consumer protection laws by deceptively trapping Massachusetts consumers in long-term auto renewal contracts and engaging in illegal debt collection practices. The settlement builds on AG Campbell’s commitment to build economic stability for residents by holding accountable those who engage in predatory business practices.   

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District Court Rules Against CFPB Authority in ECOA Case

The court approved a non-bank mortgage lender’s motion to dismiss a CFPB complaint on the grounds the bureau’s interpretation of how the statute applies in credit decisions; another example of legal pushback against the bureau’s actions.

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Watching-and-Waiting: The Illinois Community Reinvestment Act

On March 23, 2021, the Illinois Community Reinvestment Act (“IL CRA”) was signed into law.  The stated purpose of the IL CRA is to ensure that covered financial institutions are equitably providing financial services across the state, including to low- and moderate-income neighborhoods, and areas where there is a lack of access to safe and affordable banking and lending services.

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Seventh Circuit Overturns Bankruptcy Precedent, Finds Transfer Occurs When Money is Paid

On January 9, the Seventh Circuit overturned its own 39-year-old precedent to find that: (1) the definition of “transfer” for purposes of section 547 of the Bankruptcy Code depends on federal, not state, law; and (2) the date of “transfer” is the time at which the money passes to the creditor’s control.

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DFPI asks Court to Enjoin OppFi From Facilitating High Rate Consumer Loans in California

In a motion for a preliminary injunction and accompanying memorandum of points and authorities, the California Department of Financial Protection and Innovation (DFPI) is asking a California state court to order fintech Opportunity Financial LLC (OppFi) to stop facilitating loans to California borrowers from its partner FinWise Bank at interest rates above the interest rate cap (generally 36% plus the Federal Funds Rate) imposed by the California Financing Law (CFL). FinWise Bank, a state-chartered FDIC-insured bank located in Utah, is not subject to that interest rate cap.  

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Wells Fargo agrees to pay $300M to settle shareholder lawsuit over auto insurance disclosures

Wells Fargo has come to a $300 million settlement with shareholders who claim in a class action lawsuit that the bank forced unneeded insurance policies on thousands of customers and concealed the practice from investors who lost money after the problem became public.

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Mortgage Interest Rates Today for Feb. 9, 2023: Rates Move Upward

This week, some key mortgage rates ticked up fast. If you're shopping for a home loan, see how your payments might be affected by interest rate hikes.

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Our agency-wide effort to listen to the people we serve

The CFPB is committed to making financial markets work for all consumers. We have launched a series of ambitious efforts to improve how we collect information from the public. These efforts will ensure our work is guided by the people we serve.

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The Two New Yorks and Their Proposed Debt Collection Rules

The New York Department of Financial Services and the New York City Department of Consumer and Worker Protection are simultaneously engaged in amending their consumer debt collection rules. While the DFS rulemaking has been underway for nearly two years, the DCWP began its efforts last fall.

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‘Junk Fee’ Regulations Gain Traction in Biden’s State of the Union

The president’s address promised a ban on “junk fees” from credit cards and other financial products, stemming from the Consumer Financial Protection Bureau’s work in this area. ACA International is continuing advocacy to clarify the industry’s use of fees.

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The Office of the Comptroller of the Currency (OCC) has appointed Kristen Baldwin as Chief Information Officer (CIO), effective February 26, 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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Industry Events

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 -