At a glanceFriday, February 08, 2019

Collection Industry News At A Glance - February 8, 2019
Friday February 8, 2019
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The Masked Ringer

Some forms of masquerading are just good clean fun. Consider The Masked Singer, a surprise TV hit in which a panel of celebrities tries to guess the identity of other celebrities who sing karaoke while wearing elaborate disguises. (We’re not making that up. It’s a thing now.) But other forms of masquerading are based in deception, as the FTC alleges in a lawsuit against Global Asset Financial Services Group, LLC, and 15 Buffalo- and Charlotte-based defendants.

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Global regulators are struggling to define fintech credit

While many jurisdictions have highlighted fintech credit as a key development in the nonbank financial space over the last year, they struggle to define exactly what fintech credit is, per findings of the Financial Stability Board's (FSB's) Global Monitoring Report on Non-Bank Financial Intermediation 2018. FSB's annual monitoring exercise features a case studyon the role of online platforms in facilitating or extending credit, which is based on a survey of 23 respondents in participating jurisdictions. The report also presents estimates that $284 billion in fintech credit was extended across the globe in 2016.

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Waters and Green Request Documents from Consumer Bureau on Recent Settlements

Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Al Green (D-TX), Chairman of the Subcommittee on Oversight and Investigations, wrote to Consumer Financial Protection Bureau Director Kathy Kraninger to request documents relating to recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed. 

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FTC Stops Phantom Debt Collection Scheme

At the Federal Trade Commission’s request, a federal court has temporarily halted and frozen the assets of a debt collection scheme that allegedly bilked consumers out of millions of dollars, using deceptive and threatening tactics to collect phantom debts that they did not owe.

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CFPB Office of Innovation proposes “disclosure sandbox” for companies to test new ways to inform consumers

Update (Feb. 7, 2019): The original headline suggested that the proposed Disclosure Sandbox would be open only to “fintech companies.”  In fact, as the body of the post indicates, any covered entity, regardless of its categorization as “FinTech, “bank,” “credit union” or otherwise, could apply to test a trial disclosure with the Sandbox.

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New protections for servicemembers and veterans alert

The Federal Trade Commission (FTC) and the Bureau previously highlighted the new federal law that went into effect on September 21, 2018 requiring free security freezes and one year fraud alerts at the three nationwide credit reporting agencies (CRAs).

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Justice Department Obtains $750,000 From PHH Mortgage Corp. for Unlawfully Foreclosing on Servicemembers’ Homes

WASHINGTON –The Justice Department today announced that PHH Mortgage Corporation (PHH) has agreed to pay $750,000 to six servicemembers to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by unlawfully foreclosing on their homes without obtaining the required court orders.

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FTC Seeks to Add New Defendants in Student Debt Relief Case

The Federal Trade Commission moved to add two new defendants to an ongoing case against a California-based student debt relief operation shuttered pursuant to a court order obtained by the Commission in November 2018. The scheme allegedly bilked consumers out of millions of dollars using false promises that they could reduce their monthly payments, or eliminate or reduce their student loan debt.

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BB&T and SunTrust announce $66 billion merger, creating the sixth-largest US bank

New York (CNN Business)Two of the largest US regional banks are joining forces in a bid to compete with the nation's biggest players.   B&T (BBT) and SunTrust (STI) on Thursday announced a $66 billion merger, forming the sixth-largest US bank based on assets and deposits.

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Attorney General Becerra Denounces CFPB Rollback of Payday Lending Rule

SACRAMENTO – California Attorney General Xavier Becerra issued the following statement denouncing the Consumer Financial Protection Bureau’s (CFPB) rollback of the Payday Lending Rule that protects consumers from the worst harms associated with short-term payday lending:    

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Credit unions respond to CFPB payday proposal

Washington, DC (February 6, 2019) – The Consumer Financial Protection Bureau (CFPB) today released a proposed rule making changes to its short-term, small-dollar lending rule. Credit Union National Association (CUNA) has consistently advocated for the CFPB to revise its rule to ensure their 115 million credit union members have access to short-term, small-dollar lending options.  

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Consumer Financial Protection Bureau Releases Notices of Proposed Rulemaking on Payday Lending

Washington, D.C. — The Consumer Financial Protection Bureau today is proposing to rescind certain provisions of its 2017 final rule governing “Payday, Vehicle Title, and Certain High-Cost Installment Loans.” Specifically, the Bureau is proposing to rescind the rule’s requirements that lenders make certain underwriting determinations before issuing payday, single-payment vehicle title, and longer-term balloon payment loans. The Bureau is preliminarily finding that rescinding this requirement would increase consumer access to credit.

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Federal Reserve Board finalizes set of changes that will increase the transparency of its stress testing program for nation’s largest and most complex banks

The Federal Reserve Board on Tuesday finalized a set of changes that will increase the transparency of its stress testing program for the nation's largest and most complex banks. The changes are intended to improve public understanding of the program while maintaining its ability to independently test large banks' resilience.

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Ill. League, CUs talk CFPB rules, reg. burden with Director Kraninger

Illinois credit unions and the Illinois Credit Union League had the opportunity to meet with Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger in Chicago on Monday, the latest meeting between credit unions and the new director.

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Consumer Financial Protection Bureau Settles with Cash Tyme

Washington, D.C. — The Consumer Financial Protection Bureau (Bureau) today announced a settlement with Cash Tyme, a payday retail lender with outlets in Alabama, Florida, Indiana, Kentucky, Louisiana, Mississippi, and Tennessee. Cash Tyme is the operating name for CMM, LLC, and its wholly owned subsidiaries in those states.

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Fed survey: Banks report weakened demand for loans

“The Fed’s fourth-quarter SLOOS indicates that current and anticipated lending conditions among banks are deteriorating," said NAFCU Chief Economist and Vice President of Research Curt Long. “Loan demand is weakening across a broad range of loan types, and lending officers expect loan performance to decline this year even as standards tighten. It is notable that the survey was conducted during the government shutdown, when a number of other economic sentiment indices plummeted. But it is certainly another troubling sign on the horizon and warrants the patience that the FOMC has recently begun preaching.”

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SCOTUS to Decide If Courts Must Defer to the FCC’s Interpretation of “Unsolicited Advertisements” under the TCPA

On November 13, 2018, the Supreme Court agreed to consider the amount of deference a federal court is required to give the Federal Communications Commission in determining what constitutes an unsolicited advertisement within the meaning of the Telephone Consumer Protection Act (TCPA). PDR Network v. Carlton & Harris, No. 17-1705. The case is scheduled for oral argument on March 25, 2019.

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PayPal Credit Reaches $50B In TPV

PayPal Credit said Monday that it has reached $50 billion in total payment volume.   The company said that of that tally, PayPal Credit total payment volume in the United States alone was roughly $10 billion in 2018, and logged more than $2 billion across November and December 2018.   Regionally speaking, the company said Monday that use of the credit products has been global in scope, with “significant” traction across Germany and the United Kingdom.

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First Brief Filed in the Supreme Court’s TCPA Appeal: Our In-Depth Analysis

Recall that a couple months ago, the Supreme Court granted the Petition for Certiorari in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., a TCPA junk fax class action proceeding, setting the stage for what could be the beginning of the end of judicial deference to federal executive branch agency interpretation of federal regulations.  The process of potentially overhauling the deference courts give federal regulatory agencies has been on a slow boil since even before the passing of the late Justice Antonin Scalia, but began picking up steam with the appointment of Justice Neil Gorsuch in April 2017...

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GSE reform, CFPB underwriting rule are on collision course

As Congress and the Trump administration chart a future for the government-sponsored enterprises, they face a fast-approaching deadline when a huge chunk of Fannie Mae and Freddie Mac's loans could be in violation of federal underwriting requirements. The White House and Senate Banking Committee are pursuing parallel tracks to end the GSEs' federal conservatorships. Any resulting plan must deal with whether GSE-backed mortgages are still exempt from the Consumer Financial Protection Bureau's Qualified Mortgage rule.

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FTC to speed up its journey to the cloud

The cloud is not a new place for the Federal Trade Commission.  But over the next few years, the FTC is going to get much more familiar with the “as-a-service” model.  Raghav Vajjhala, the chief information officer of the FTC, said the agency will use a new multiple award contract with four vendors as the launching point for the agency’s IT modernization efforts.

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Voluntary Private Education Loan Rehabilitation Programs

The FDIC and the Board of Governors of the Federal Reserve System jointly are providing an advisory on Voluntary Private Education Loan Rehabilitation Programs to make financial institutions aware of an amendment to section 623 of the Fair Credit Reporting Act (FCRA). This amendment is contained in section 602 of the Economic, Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA). It gives consumers the opportunity to rehabilitate a private education loan with a previously reported default under certain conditions. Financial institutions that choose to establish a private education loan rehabilitation program under Section 602 of the EGRRCPA (Section 602 Program) that satisfies the statutory requirements, including written approval of the terms and conditions from their federal regulatory agency, are entitled to a safe harbor from potential claims under the FCRA related to removal of the reported default.

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The shutdown has ended, yet some small businesses still struggle to move on

The partial government shutdown has come to an end. Yet for small-business owners who are waiting on loans, the clock is still ticking. The government closure shuttered some agencies, including the Small Business Administration, for 35 days. Now that the SBA has finally reopened, it faces a backlog of loans to process. The Consumer Bankers Association pegged the tally of outstanding loans at about 300 for each day of the shutdown, or about $2 billion in lending, according to a letter it sentto President Donald Trump and Congressional leaders Jan. 22. The partial shutdown began on Dec. 22.

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CFPB, Payday Lenders Settle

The Consumer Financial Protection Bureau, the government watchdog agency, settled with a handful of payday lenders over alleged violations of the Consumer Financial Protection Act. Marketwatch, citing the CFPB, reported it settled with payday lenders and officials of the companies located in Canada and Malta. According to the report, the CFPB contended the companies told consumers they had to repay loans in states where the loans were running afoul of licensing and usury rules. 

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Don’t Collect Biometric Data Without Providing Notice

An Illinois court ruling underscores the importance of providing notice of biometric data collection and use. Violate the law and your company could be sued. One small word can have a huge impact, as evidenced by a recent Illinois Supreme Court ruling. In Rosenbach v. Six Flags Entertainment Corp., the word is “aggrieved,” the interpretation of which now means that any private entity collecting biometric information from individuals in Illinois that has not provided adequate notice can be sued, even if the plaintiff can’t prove harm.

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Industry Events

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

LendIt Fintech USA 2019

LendIt Fintech

San Francisco , CA
April 08 - 09 , 2019


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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