Judge Denies Safe Harbor in Model Validation Notice Case

On Feb. 9, 2023, in the first substantive decision about the scope of the safe harbor provided under Regulation F for debt collectors using the Consumer Financial Protection Bureau’s model validation notice (MVN), a judge in the U.S. District Court for the Southern District of Florida appears to have decided that the MVN safe harbor provides nearly no cover from consumers’ claims.

More medical-debt consumer protections proposed by Colorado Democrats

Nine months after Sharon Cravitz underwent a double mastectomy as part of her breast cancer treatment, she received a bill for $2,000 from a company she did not recognize.

Attorney General Kris Mayes Joins Coalition Supporting Federal Proposal to Create a More Affordable Repayment Plan for Student Loan Borrowers

PHOENIX – Arizona Attorney General Kris Mayes is joining a coalition of 22 state attorneys general in submitting comments to the U.S. Department of Education in response to proposed changes to the Income-Driven Repayment (IDR) program.

Receivables Management Association International Honors Industry Leaders at Its 2023 Annual Conference

February 8, 2023 (Sacramento, CA) – The Receivables Management Association International celebrated its 26^th Annual Conference in Las Vegas, February 6-9, 2023. RMAI was pleased to host this popular conference which attracted more than 1,300 attendees this year. RMAI took the opportunity to present its annual awards, recognizing leaders in the receivables management industry.

Mortgage demand drops as interest rates bounce higher

After falling for five straight weeks, mortgage rates jumped last week, triggering a decline in mortgage demand. Total mortgage application volume fell 7.7% last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Attorney General Bonta, Senator Dodd, Senator Skinner Introduce Bill Prohibiting Hidden Fees in California

OAKLAND — California Attorney General Rob Bonta today, with Senator Bill Dodd and Senator Nancy Skinner, introduced Senate Bill 478 (SB 478), landmark legislation seeking to prohibit in California the practice of hiding mandatory fees. The use of hidden fees and junk fees is a deceptive advertising practice in which a seller uses an artificially low headline price to attract a customer before revealing additional charges later in the buying process. Sellers often hide these additional, mandatory charges by using small type, vague descriptions or misleading wording such as “service fees,” by bundling them with legitimate charges like taxes, or revealing them clearly only after the consumer has invested time in the transaction.

Attorney General Ellison shuts down fraudulent student-loan debt-settlement company

February 14, 2023 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has obtained a settlement that requires a California student-loan debt-relief company that illegally collected fees from customers and misrepresented its services to consumers to cease operating in Minnesota and provide full refunds to its Minnesota consumers.   

Market Snapshot: Trends in Third-Party Debt Collections Tradelines Reporting

This report provides an overview of the trends in third-party debt collections tradelines on consumer credit reports from 2018 to 2022. The report uses data from the Bureau’s Consumer Credit Panel (CCP), a nationally representative sample of de-identified credit records maintained by one of the three nationwide credit reporting companies. 

Debt collectors re-evaluate medical debt furnishing in light of data integrity issues

A new CFPB report estimates that medical collections tradelines declined by 37 percent between 2018 and 2022. “Market Snapshot: An Update on Third-Party Debt Collections Tradelines Reporting” also found that medical debt constitutes a majority (57 percent) of all collections on credit reports. 

CFPB Finds One-Third Decline in Collections Items on Consumer Credit Reports

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released a report examining trends in credit reporting of debt in collections from 2018 to 2022. The report found the total number of collections tradelines on credit reports declined by 33%, from 261 million tradelines in 2018 to 175 million tradelines in 2022.

3.3 Million Impacted by Ransomware Attack at California Healthcare Provider

The incident took place on December 1, 2022, but was discovered only a week later, and impacted the Regal Medical Group and affiliates Lakeside Medical Organization, Affiliated Doctors of Orange County and Greater Covina Medical Group.

Student Loan Debt: A Disproportionate Burden on Black and Latino Borrowers

According to a report from the Institute on Assets and Social Policy, 20 years after starting college, the median Black student borrower still owes 95% of their original loan. As a result, debt-financed higher education is sharpening the racial wealth gap rather than reducing it. The median Black household has just 15% of the wealth the median white household has, but for households with student debt, comparative Black wealth shrinks to only 5%. 

9th Circuit Vacates CFPB’s $8 Million Judgment Against Mortgage Service Telemarketer

The U.S. Court of Appeals for the Ninth Circuit recently vacated an $8 million judgment it had obtained against a mortgage service telemarketer so that the district court can consider the Fifth Circuit’s opinion in Community Financial Services Association of America, Ltd. v. CFPB, 51 F.4th 616 (5th Cir. 2022). 

Attorney General Bonta Leads Multistate Coalition in Support of Federal Overhaul of Student Loan Income-Driven Repayment Plans

OAKLAND — California Attorney General Rob Bonta and the Massachusetts Attorney General’s Office led a multistate coalition in a comment letter supporting the U.S. Department of Education’s (ED) proposed changes to income-driven repayment plans (IDR) for federal student loan borrowers, and urging further action to address the student debt crisis. IDR plans aim to reduce the burden of high monthly payments on struggling federal student loan borrowers, but the program has long suffered from regulatory and servicing problems. The proposed changes would help ensure that student loan borrowers have greater access to more affordable repayment terms.

State AG Updates: Colorado, New Jersey, New York, Kansas, Florida, Rhode Island and AG Coalitions

In this edition of Faegre Drinker’s State Attorneys General Update, we discuss:

3 Overlooked Cybersecurity Breaches

Here are three of the worst breaches, attacker tactics and techniques of 2022, and the security controls that can provide effective, enterprise security protection for them.

GMAC to resume car loans to subprime borrowers

NEW YORK/DETROIT (Reuters) - GMAC Financial Services said it will resume making car and truck loans to subprime borrowers and will lower inventory financing costs for cash-strapped auto dealers, part of a series of moves intended to spur sales at General Motors Corp.

‘Build a Better Mousetrap’: OCC Sets Out Stall on Mergers

Existing metrics for assessing competition need updating in order to keep bank merger and acquisition rules fit for purpose, the Office for the Comptroller of the Currency has said.

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.   

FTC: $1.3 billion lost by 70,000 Americans to romance scams last year

The U.S. Federal Trade Commission (FTC) says Americans once again reported record losses of $1.3 billion to romance scams in 2022, with median losses of $4,400.

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.  

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).

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.

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.

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.

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.  

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.

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.

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.

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.

‘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.

OCC APPOINTS KRISTEN BALDWIN AS CIO IN TIMES OF CRYPTO ASSET CONCERN

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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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

Collection and Recovery Solutions 2023

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