At a glanceFriday, January 18, 2019

Collection Industry News At A Glance - January 18, 2019
Friday January 18, 2019
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CFPB seeking compliance authority on military lending

The Consumer Financial Protection Bureau is changing course on its previous decision to stop supervising lending to active duty service members. Kathy Kraninger, the recently confirmed director of the bureau, sent a letter to Congress on Thursday, asking for “clear authority” to supervise for compliance with the Military Lending Act. This turnaround comes several months after Mick Mulvaney, who served as acting director of the CFPB prior to Kraninger’s confirmation, decided that the bureau would stop supervising lending made to active duty service members. Much to the dismay of congressional Democrats, who pushed the CFPB to retain oversight. Under Mulvaney’s changes, the CFPB relied solely on complaints from service members and their families to trigger investigations. Mulvaney had reportedly expressed that the bureau had overstepped its authority by proactively looking into cases against military members without receiving complaints.

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Minnesota federal court decision is warning to lead generators

A Minnesota federal district court recently ruled that lead generators for a payday lender could be liable for punitive damages in a class action filed on behalf of all Minnesota residents who used the lender’s website to obtain a payday loan during a specified time period.  An important takeaway from the decision is that a company receiving a letter from a regulator or state attorney general that asserts the company’s conduct violates or may violate state law should consult with outside counsel as to the applicability of such law and whether a response is required or would be beneficial.

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Phin Solutions, Inc is pleased to announce that Vanessa Lewis Ward will join our staff as a Senior Account Executive within Sales. Vanessa brings extensive experience in sales, customer service and project management to the Phin Solutions, Inc. team. She has 14 years of sales experience within the collections industry as well as experience working within the medical and utility industries.

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New Financial Services Chair Plans Robust Oversight of Financial System

Rep. Maxine Waters (D-CA), the new chair of the House Financial Services Committee, recently outlined a full-bodied agenda that seeks to protect consumers, safeguard investors and prevent another financial crisis.  In terms of setting the committee’s agenda, Waters, who has served on the committee since 1991, thus sets a sharp deviation from that of the previous chairman, Rep. Jeb Hensarling (R-TX), who retired last year at the end of the term

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Student loan debt is keeping young people from buying homes, Fed study finds

Student loan debt is putting a dent in young people’s pockets that is contributing to a much lower level of home ownership over the past decade.  Federal Reserve economists studied the impact that the $1.5 trillion in educated-related loans is having on those aged 24 to 32. They found that while it is not the principal contributor to the decline in housing purchases, it is playing a significant role.

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LITTLE ROCK – Scammers have found a way to duplicate chip-enabled credit cards, despite the extra safety design associated with the cards. Shimming is a new technique in which scammers insert a paper-thin device into the dip-and-wait slot on card readers. The “shim” is enabled with a microchip and flash storage to copy and save information from the credit or debit card.   “Credit and debit cards with the chip protect the user’s identity more than the magnetic strips,” said Arkansas Attorney General Leslie Rutledge. “The chip creates a unique transaction code that cannot be used again. Unfortunately, scammers continue to evolve their tactics and can now use the information they obtain from the shim to create a version of the card featuring a magnetic strip, which is still accepted by many retailers, especially online.”

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Consumer Financial Protection Bureau Settles Claims with Sterling Jewelers, Inc.

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (Bureau) and the People of the State of New York today settled claims against Sterling Jewelers Inc.   The Bureau’s and the State’s parallel investigations found that Sterling violated the Consumer Financial Protection Act of 2010 by opening store credit-card accounts without customer consent; enrolling customers in payment-protection insurance without their consent; and misrepresenting to consumers the financing terms associated with the credit-card accounts. The Bureau also found that Sterling violated the Truth in Lending Act by signing customers up for credit-card accounts without having received an oral or written request or application from them. The State of New York found that Sterling violated several provisions of state law.

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Fiserv to Buy First Data for $22 Billion, Forging Payments Giant

(Bloomberg) -- Fiserv will acquire First Data Corp. for $22 billion in a payments processing deal that marks one of the biggest financial mergers in a decade and a win for private-equity giant KKR & Co.   The deal will create the world’s largest payment processor amid a wave of consolidation in that industry, which faces threats from startups such as Square Inc. and Adyen NV. The all-stock transaction values First Data at a 29 percent premium to Tuesday’s closing price.

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Hackers broke into an SEC database and made millions from inside information, says DOJ

Federal prosecutors unveiled charges in an international stock-trading scheme that involved hacking into the Securities and Exchange Commission's EDGAR corporate filing system. The scheme allegedly netted $4.1 million for fraudsters from the U.S., Russia and Ukraine. Using 157 corporate earnings announcements, the group was able to execute trades on material nonpublic information. Most of those filings were "test filings," which corporations upload to the SEC's website. The charges were announced Tuesday by Craig Carpenito, U.S. Attorney for the District of New Jersey, alongside the SEC, the Federal Bureau of Investigation and the U.S. Secret Service, which investigates financial crimes.

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Is Jamie Dimon warning of a downturn?

JPMorgan Chase reported what bankers want to see when it comes to lending — solid growth. But Jamie Dimon followed up with a message bankers don’t like to hear: Start preparing for a slowdown.   JPMorgan raised its loan-loss reserves by more than $300 million in the fourth quarter, compared with a reserve-build of about $100 million in the previous quarter. The reserves were almost evenly split between consumer and commercial loans.

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Ransomware attack comes with malicious ransom note

Some cybercriminals are taking an “in for a penny in for a pound” approach with a new ransomware campaign that is now under development.  MalwareHunterTeam discovered the ransomware and the fact the malicious actors kindly offer several forms of payment to obtain the decrytption key, including PayPal. However, if the victim chooses PayPal and follows the link provided they will end up on a phishing page where their account login credentials are stolen. When the target hits send a clue becomes evident that something is amiss. Instead of going to PayPal the payment goes to[.]php, which is one of the few clues that something is amiss.

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Wells Fargo now plans to operate under growth ban through 2019

Wells Fargo & Co. is planning to operate under a Federal Reserve asset cap through the end of 2019, rather than just the first half of the year, as it takes longer than anticipated to correct issues in its consumer business. “To have enough time to incorporate this feedback in our plans in a thoughtful manner and adopt and implement the final plans as accepted by the Federal Reserve and complete the third-party reviews, we’re now planning to operate under the asset cap through the end of 2019,” Wells Fargo Chief Executive Tim Sloan said Tuesday on an earnings call with analysts.

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Alexandria Ocasio-Cortez secures powerful House committee seat that gives her a huge say over Wall Street

Rep. Alexandria Ocasio-Cortez of New York has secured a spot on the House Financial Services Committee, the powerful House group that oversees Wall Street. Ocasio-Cortez confirmed the appointment on Tuesday night on Twitter, saying: "Financial Services is one of just four exclusive committees in the House. It oversees big banks, lending, & the financial sector." "I am very grateful for the opportunity to sit on this committee as a freshman, and look forward to working under the leadership of @RepMaxineWaters!" she added.

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A New Year Brings a New Vermont Law Aimed at Data Brokers and Credit Reporting Agencies

On Jan. 1, 2019, a new Vermont law intended to protect consumers by imposing new requirements on “data brokers,” companies that aggregate and sell consumer information, and credit reporting agencies took effect. Under the new law, data brokers must comply with registration, information security safeguards and reporting requirements, while credit reporting agencies are prohibited from assessing fees for establishing or removing security freezes. The Vermont legislature’s intent in enacting the new law is fourfold: (1) inform consumers about data brokers and their data collection practices; (2) protect consumer information by requiring that data brokers implement certain administrative, technical and physical safeguards; (3) prevent harm to consumers by prohibiting certain methods of acquisition and use of their information by data brokers; and (4) make it easier and less expensive for consumers to obtain and protect their credit information.

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Supreme Court won’t hear challenge to CFPB’s structure

The U.S. Supreme Court on Monday declined to hear a lawsuit challenging the single-director structure of the Bureau of Consumer Financial Protection. NAFCU has long advocated for a commission structure at the bureau to ensure long term continuity and stability in its policymaking.   The lawsuit – initially brought by the State National Bank of Big Spring, Texas, the Competitive Enterprise Institute and the 60 Plus Association, an Alexandria, Va.-based free enterprise advocacy group – argued that the Dodd-Frank Act effectively gives "unbounded power to the CFPB," that far exceeds what is allowed under the U.S. Constitution.

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January 15th, 2019, Marietta, GA- Chris Zhao, PhD in Mathematics from Princeton University joined Sequium as  Vice President of Business Intelligence & Chief Data Officer.  Chris brings over 30 years of hands-on IT and leadership experiences in Software engineering, Data Mining, Business Intelligence, and Data Science. Prior to joining Sequium, he had been a Senior Consultant for UPS, Credit Suisse, Thomson Reuters, IPSOS, and Bain Capital, covering multiple business domains and industries. In consumer behavior analytics, Chris developed active index algorithms leveraging integrated consumer and behavioral data, and created tremendous values for his business clients. Chris was also adjunct professor at Rider University and Peking University. He is a graduate of Princeton University with Ph.D. in Mathematics.  

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CFPB to scrap key underwriting portion of payday rule

The Consumer Financial Protection Bureau is expected to eliminate underwriting requirements in a highly anticipated revamp of its payday lending rule, according to sources familiar with the bureau’s proposal. The CFPB in October signaled its interest in "revisiting" the ability-to-repay provisions in the 2017 small-dollar lending rule issued under former Director Richard Cordray. But sources familiar with the agency's thinking say the CFPB — now led by Trump appointee Kathy Kraninger — has concluded the best approach is to remove those provisions altogether. Under the current rule, which has not yet gone fully into effect, lenders must verify a borrower's income as well as debts and other spending, to assess one's ability to repay credit while meeting living expenses.

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States Sue to Override Feds for Right to Regulate Fintech

States continue to fight the federal government for regulatory control of financial technology (fintech) companies, and the latest fintech lawsuit contends that feds don’t have the legal right to regulate them.
Fintech companies are technology startups specializing in a certain aspect of financial services. Lemonade, for example, offers renter’s insurance, SoFi refinances student loans and offers personal loans, and Kabbage provides small business loans.

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U.S. Supreme Court rejects challenge to consumer protection bureau

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday turned away a Texas bank's constitutional challenge to the structure of the U.S. Consumer Financial Protection Bureau, passing up a case that could have led to more presidential power over an independent agency that President Donald Trump's administration already has weakened. The decision by the justices not to hear an appeal brought by State National Bank of Big Spring may not be the final word on the matter as three other cases involving the CFPB are heading toward the high court. The case was delayed in reaching the high court because it was put on hold while the U.S. Court of Appeals for the District of Columbia Circuit was tackling a case involving mortgage servicer PHH Corp that had raised the same issues.

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Navient top in student loan borrower complaints in 2018

An analysis of student loan-related complaints submitted to the Consumer Financial Protection Bureau last year shows one loan servicing company was the most complained about in 46 states, including Oklahoma.

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Regulators Encourage Institutions to Work with Borrowers Affected by Government Shutdown

While the effects of the federal government shutdown on individuals should be temporary, affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans, or credit cards. As they have in prior shutdowns, the agencies encourage financial institutions to consider prudent efforts to modify terms on existing loans or extend new credit to help affected borrowers.  

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Industry Events

Receivables Management Association 22nd Annual Conference

Receivables Management Association International (RMAI) 22nd Annual Conference Aria Resort & Casino 3730 Las Vegas Blvd. Las Vegas, NV 89518 February 5-7 2019 916-482-2760

February 05 - 07 , 2019

(916) 482-2760

FTC Hearing on Competition and Consumer Protection in the 21st Century – February 2019

Federal Trade Commission

Washington , DC
February 12 - 13 , 2019

(202) 326-2222

ACA International Spring Forum & Expo 2019

ACA International

The M Resort
12300 S Las Vegas Blvd,
Henderson, NV 89044

March 13 - 15 , 2019

800- 269-1607

NCUCA – National Credit Union Collection Alliance

NCUCA - National Credit Union Collection Alliance

April 15 - 17 , 2019

Collection & Recovery Solutions 2019

Resource Management Services, Inc.

Four Seasons Hotel
3960 Las Vegas Blvd South
Las Vegas , NV
May 08 - 10 , 2019


National Creditors Bar Association 2019 Spring Conference

National Creditors Bar Association

Hilton Minneapolis
1001 S. Marquette Avenue
Minneapolis, MN 55403

May 15 - 18 , 2019


PrivacyCon 2019

Federal Trade Commission

400 7th St., SW
Washington , DC
June 27 - 27 , 2019

(202) 326-2222

ACA International 2019 Annual Convention & Expo

ACA International

Event Location TBA

July 17 - 16 , 2019


Debt Connection Symposium & Expo 2019

Resource Management Services, Inc.

Red Rock Casino Resort & Spa
11011 W Charleston Blvd
Las Vegas, Nevada

September 10 - 12 , 2019

(562) 906-1101

National Creditors Bar Association 2019 Fall Conference

National Creditors Bar Association

Marriott Marquis
Washington, Washington, DC

October 16 - 19 , 2019


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