At a glanceFriday, February 17, 2023

Collection Industry News At A Glance - February 17, 2023
Friday February 17, 2023
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Articles

 
Why Finance Needs to Collaborate with Cybersecurity

Even as threats to finance and accounting data grow, cybersecurity remains siloed from the finance and accounting functions in most companies. That’s problematic as organizations work to minimize cyber risks and mitigate the damage from potential attacks.

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Colorado Attorney General, Legislators Push to Protect Consumers

Attorney General Phil Weiser this week joined state legislators and consumer health advocates at the State Capitol in support of Senate Bill 23-093, legislation that would provide Coloradans with additional consumer protections from high interest rates for medical debt and confusing debt collection practices that lead to long-lasting debt and financial instability.

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Consumer Financial Protection Bureau’s fate is again in the hands of the Supreme Court

(CNN) -- The Supreme Court may decide as soon as Friday whether to tackle a new case that could further constrain the power of US regulators to delve into American businesses and individual lives.

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ACA International Responds to CFPB Analysis on Third-Party Debt Collection Credit Reporting

The report examines debt collection credit reporting and medical debt reporting from 2018-2022 through a narrow lens and overlooks multiple factors influencing credit reporting.

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Total Household Debt Reaches $16.90 trillion in Q4 2022; Mortgage and Auto Loan Growth Slows

NEW YORK—The Federal Reserve Bank of New York's Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The Report shows an increase in total household debt in the fourth quarter of 2022, increasing by $394 billion (2.4%) to $16.90 trillion. Balances now stand $2.75 trillion higher than at the end of 2019, before the pandemic recession. The report is based on data from the New York Fed's nationally representative Consumer Credit Panel.

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AG Campbell Secures $2.5 Million in Relief From Leominster Company for Overcharging MassHealth Members and Violating Consumer Protection Laws

BOSTON — Attorney General Andrea Joy Campbell announced today that her office reached a $2.5 million settlement with Leominster-based Regional Home Care, Inc, resolving allegations that the company engaged in unfair, deceptive and abusive debt collection practices in violation of state consumer law and debt collection regulations and improperly collected money from members of MassHealth, the state’s Medicaid program, for balances not owed or that were already paid for by MassHealth

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FTC Sues to Stop Interconnected Web of VoIP Service Providers Carrying Robocalls Pitching Phony Debt Relief Services

The Federal Trade Commission sued to stop an interconnected web of operations responsible for delivering tens of millions of unwanted Voice Over Internet Protocol (VoIP) and ringless voicemail (RVM) phony debt service robocalls to consumers nationwide. The Department of Justice (DOJ) filed the complaint in federal court on the FTC’s behalf.

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New CFPB report and blog post look at third-party debt collections tradeline reporting and medical debt furnishing

The CFPB issued a new report, “Market Snapshot: An Update on Third-Party Debt Collections Tradelines Reporting,” that looks at trends in credit reporting of debt in collections from 2018 to 2022.  It also published a new blog post, “Debt collectors re-evaluate medical debt furnishing in light of data integrity issues,” that looks at factors that create challenges for medical collections reporting.

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FTC Launches New Office of Technology to Bolster Agency’s Work

The Federal Trade Commission today launched a new Office of Technology that will strengthen the FTC’s ability to keep pace with technological challenges in the digital marketplace by supporting the agency’s law enforcement and policy work. 

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Average long-term US mortgage rate jumps to 6.32% this week

The average long-term U.S. mortgage rate jumped this week to its highest level in five weeks, bad news for home shoppers heading into the spring buying season.

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GAO-IG Act Reporting

On January 3, 2019, the Good Accounting Obligation in Government Act (GAO-IG Act or Act)
was enacted as Public Law number 115-414. This report is published by the Consumer Financial
Protection Bureau (Bureau or CFPB) in compliance with that law. 1

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FTC issues annual ECOA report to CFPB (UPDATED)

The FTC recently sent its annual letter to the CFPB reporting on the FTC’s activities related to the Equal Credit Opportunity Act (ECOA) and Regulation B.  The new letter reports on the FTC’s activities in 2022.  The Bureau includes the FTC’s annual letter in its own annual report to Congress on the ECOA.

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From Capitol Hill: Financial Data Privacy Bill and Overall Regulatory Burdens

A House Financial Services subcommittee met last week and heard testimony from technology and banking experts on industry competition and reducing regulatory burdens, and reviewed a draft financial data privacy bill.

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Why the largest credit card companies are suppressing actual payment data on your credit report

By John McNamara – FEB 16, 2023 - Last year, we reported that Americans paid over $120 billion annually in interest and fees on credit cards. Since that time, average interest rates charged by credit card companies have quickly increased. It’s critical that consumers can find and switch to credit cards with the lowest and most competitive rates. That’s why we’ve been carefully examining barriers to a fair and competitive credit card market, especially as it relates to the role of consumer credit reporting.

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CFPB Report Finds Decline in Debt in Collections Appearing on Consumer Reports

On February 14, the Consumer Financial Protection Bureau (CFPB) released a report entitled Market Snapshot: An Update on Third-Party Debt Collections Tradelines Reporting. The report sought to examine trends in the reporting of debt in collections from 2018 to 2022.

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ACA International Responds to CFPB Analysis on Third-Party Debt Collections Credit Reporting

The report examines debt collection credit reporting and medical debt reporting from 2018-2022 through a narrow lens and overlooks multiple factors influencing credit reporting.

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Consumer debt hits record $16.9 trillion as delinquencies also rise

Consumer debt hit a fresh record at the end of 2022 while delinquency rates rose for several types of loans, the New York Federal Reserve reported Thursday.

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FCC Targets Repeat Robocall Offender With New Cease-and-Desist

The FCC alleges the same owner started a new company with a different name to continue robocalls and evade regulators.

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Inflation pushes up mortgage rates for second week in a row

Washington, DC CNN—Mortgage rates climbed higher for the second consecutive week, following four weeks of declines. Inflation is running hotter, making rates more volatile, with the expectation that they will move in the 6% to 7% range over the next few weeks

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Debt Collections Fell 33% Over Last Four Years, CFPB Says

Consumer debt collections fell by a third between 2018 and 2022, a sign that Americans' household finances are getting stronger, the Consumer Financial Protection Bureau said Tuesday.

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Binance banking problems highlight a divide between crypto firms and banks

Binance, the world's leading crypto exchange by trading volume, will temporarily suspend bank transfers in U.S. dollars. The exchange stated in a tweet on Feb. 6 that no other trading methods would be affected. The announcement came with no explanation. However, exchange CEO Changpeng Zhao noted in a tweet that only 0.01% of the exchange’s total users will be affected by the suspension while assuring that they are looking to resolve the issue soon.

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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.

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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.

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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.

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

February 8, 2023 (Sacramento, CA) – The Receivables Management Association International celebrated its 26th 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.

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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.

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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.

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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.   

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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. 

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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. 

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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.

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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.

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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%. 

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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). 

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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.

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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:

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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.

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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.

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‘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.

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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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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.

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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

562-906-1101

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 - Mark@collectionrecoverysolutions.com