Consumer bureau chief to face lawmakers for first time since confirmation

The director of the Consumer Financial Protection Bureau (CFPB) will appear before a House panel next week as Democrats ramp up their oversight of the controversial regulator, the committee’s chairwoman said Thursday. Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, said Thursday that CFPB Director Kathy Kraninger will testify next week before the panel. The Financial Services Committee is scheduled to hold a March 7 hearing on the impact of the Trump administration's takeover of the CFPB. It was unclear if Kraninger would attend the hearing until Waters confirmed the director would appear before the panel. “She will be there. She is a witness,” Waters said. "It's confirmed."

Former Arizona official pleads guilty to taking bribes from debt company

PHOENIX — A former Arizona public official pleaded guilty Monday to one count of bribery after he accepted at least $26,000 in exchange for giving a debt collection company confidential government information. Leslie Gene Nelson, 59, accepted the cash bribes from 2010 to 2013 and helped Culver City, California-based Professional Collection Consultants collect about $1 million in debts, according to a press release. Nelson worked for the Arizona Department of Economic Security and gave PCC government database information about thousands of people’s income, using Social Security numbers the company provided.

BankThink Square’s ILC bid is a regulatory end run

Like the now famous Bill Clinton political slogan “It’s the economy, stupid” from the 1992 presidential campaign, most in our industry are missing the core issue with Square’s application to form an industrial loan company. “It’s the ILC loophole, stupid” is an apt expression for refocusing the spotlight on ILCs. Square itself is not so much the problem as the ILC deposit insurance loophole. It is the same underlying issue that sparked the Independent Community Bankers of America’s opposition to the Walmart application over a decade ago. The ILC loophole allows for an unintended and potentially dangerous expansion of the deposit insurance safety net.

Cisco: Patch routers now against massive 9.8/10-severity security hole

Cisco is warning businesses that use its wireless VPN and firewall routers to install updates immediately due to a critical flaw that remote attackers can exploit to break into a network. The vulnerability allows any attacker with any browser to execute code of their choice via the web interface used for managing Cisco RV110W Wireless-N VPN Firewall, Cisco RV130W Wireless-N Multifunction VPN Router, and Cisco RV215W Wireless-N VPN Router. The networking giant has assigned the bug, tagged as CVE-2019-1663, with a severity score of 9.8 out of a possible 10 under the Common Vulnerability Scoring System (CVSS).

Billions of dollars in defaulted student loans are going uncollected, lawsuit says

A contractor for the Education Department is suing the federal agency, alleging that billions of dollars in defaulted student loans go uncollected because the government is not lining up new private debt collectors.

Oregon Attorney General Ellen Rosenblum leads push to protect student borrowers

Oregon's attorney general is joining a growing movement among states to protect those who take out student loans, introducing legislation that would crack down on student loan servicers like Navient and Nelnet. Attorney General Ellen Rosenblum backed a proposal on Monday that would regulate student loan services and force them to be licensed under the state. It would also create a student loan ombudsperson to help borrowers navigate a complex loan process. "Graduates are often asked to make financial decisions with relatively poor information, and in a market where debt servicers are ultimately calling the shots," the attorney general said during a press conference.

Regions Bank to Exit Indirect Lending Space

Regions Bank has set the wheels in motion to shutter its indirect auto lending business, Auto Finance News has learned. The Birmingham, Ala.-based bank will continue to originate direct auto loans. “We informed the dealers and sent out a notice to them on Jan. 14,” Tom Lazenby, senior vice president and line of business executive for Regions Bank’s Dealer Financial Services unit, told Auto Finance News. “We will be purchasing paper through March 4, and we will fund loans through April 1.” Regions Bank had $3.1 billion of loans outstanding at yearend 2018. Its portfolio has declined 24.4% since 2016.

PRA Group Makes Big Bets on Debt Collection

Debt collection isn't a glamorous business but it can be profitable. PRA Group (NASDAQ:PRAA)has been a leader in the debt-collection industry, and recently, it's been stepping up its efforts to try to grow its portfolio of collection assets and put itself in position to dominate the industry during the next swing in the business cycle.

FTC Top frauds of 2018

Every year, millions of consumers tell us – and our partners – about the frauds they spotted. In 2018, we heard from 3 million people and learned a lot from the reports entered into our Consumer Sentinel database. Here are some notable facts from the Consumer Sentinel Network’s 2018 Data Book – including that a new category of scams has earned the unenviable right to chant "We’re #1."

The Cybersecurity 202: These are the four parts of the economy most vulnerable to cyberattack, according to Moody’s

Across the world, there are four specific industry sectors at the highest risk of being devastated by cyberattacks. They also hold a big chunk of the world's debt -- to the tune of $11.7 trillion. That's the sobering conclusion from a new report this morning from Moody’s Investors Service, a division of the credit ratings agency. It found a major cyberattack could potentially bring banks, investment firms, securities exchanges and hospitals to financial ruin and prevent an organization from making good on some of what it owes. It's encouraging lenders to consider an organization's cybersecurity vulnerabilities before making loans in those sectors, the report says.

Square’s Miss May Not Be So Bad as Analysts See an Opening

Square Inc. slid in pre-market trading after its first-quarter forecast missed estimates, but several analysts said the drop offers a fresh chance to buy more stock in the payments company. Look “underneath the hood” for volume growth in sales of new products such as Square Register and Square Terminal, Guggenheim said. Moffettnathanson echoed the sentiment, saying the Cash App is just a small piece of the company and hardware sales will drive the future. Shares of Square slumped 5 percent before markets opened amid a batch of ugly tech earnings. The stock had gained 41 percent so far this year through Wednesday’s close, almost four times the return of the S&P 500 Index.

PayThink – Blockchain payments are making the grade at universities

Leaders at higher educational institutions are actively exploring blockchain applications, and with good reason. Blockchain can enhance areas as diverse as course offerings, recordkeeping and credentialing, institutional collaboration, decentralized learning and nontraditional education. Leaders in blockchain and education argue that blockchain might be the technology that revolutionizes higher education. It creates an auditable, distributed ledger of transactions that cannot be altered or removed, enabling transactions that are valid, authentic, trustworthy and immutable.

Financial institutions report widespread elder financial abuse

Financial institutions are seeing vast numbers of their older customers fall prey to financial exploitation by perpetrators ranging from offshore scammers to close family members—and they’re filing hundreds of thousands of reports with the federal government about these suspicions.

Walmart teams with Affirm to offer point-of-sale loans

Walmart will offer its customers point-of-sale loans for the first time — both on its website and in nearly 4,000 U.S. stores — under a partnership with the Silicon Valley lender Affirm. The deal is a watershed moment for the consumer finance industry, as the nation’s largest retailer embraces a financing option that is being popularized by consumers who prefer not to put their big-ticket purchases on a credit card. “Affirm is a great financing option for those customers who may prefer a fixed-term loan versus an open-ended revolving credit line to pay for larger baskets,” Walmart spokeswoman Marilee McInnis said in an email. “We want our customers to have choices that best meet their lifestyles.”

Consumer Financial Protection Bureau Announces System for Prepaid Issuers to Submit Account Agreements

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (Bureau) announced a streamlined electronic submission system for prepaid account issuers to submit their account agreements to the Bureau. Prepaid issuers can register for the system now before the April 1, 2019 effective date of the Bureau’s prepaid rule. 

JPMorgan’s Dimon: Square innovated where we should have

Jamie Dimon confessed on Tuesday to having a little bit of Square envy. During JPMorgan Chase’s annual investor day in New York, the bank’s chairman and CEO was asked what companies could get steamrolled by his bank, which has emerged as a financial-services disruptor. JPMorgan is investing billions of dollars per year in technology and recently rolled out its own online-only bank, dubbed Finn, and is set to become the first U.S. bank to launch a cryptocurrency. But rather than answer that question directly, Dimon responded by praising a company, Square, that has done things he wishes JPMorgan Chase had done.

As Feds Turn Away, New York Looks to Regulate Student-Loan Servicers

New York City owes $34.8 billion in student loans, a burden born across neighborhoods and demographic groups, but not born equally.   Blacks are more likely to owe educational debt than whites, according to research by the New York City Department of Consumer Affairs. Women are more likely to feel the squeeze of student-loan IOUs than men. Older debtors are more likely to fall behind in paying off their loans than their younger counterparts.

Monetary Policy Report submitted to the Congress on February 22, 2019, pursuant to section 2B of the Federal Reserve Act

Economic activity in the United States appears to have increased at a solid pace, on balance, over the second half of 2018, and the labor market strengthened further. Inflation has been near the Federal Open Market Committee's (FOMC) longer-run objective of 2 percent, aside from the transitory effects of recent energy price movements. In this environment, the FOMC judged that, on balance, current and prospective economic conditions called for a further gradual removal of policy accommodation. In particular, the FOMC raised the target range for the federal funds rate twice in the second half of 2018, putting its level at 2-1/4 to 2-1/2 percent following the December meeting. In light of softer global economic and financial conditions late in the year and muted inflation pressures, the FOMC indicated at its January meeting that it will be patient as it determines what future adjustments to the federal funds rate may be appropriate to support the Committee's congressionally mandated objectives of maximum employment and price stability.

Robocalls are rampant despite the Do Not Call list — FCC urges phone providers to help stop them

The Federal Communications Commission, as part of a crackdown on the billions of unsolicited robocalls every year, is warning phone providers to implement technology to stop the scammers or face new government rules, FCC Chairman Ajit Pai said Tuesday “Recently I told the industry, ‘Look, we need to adopt call authentication, essentially a digital fingerprint, for every single phone call this year. We need to have it now or otherwise it’s going to be regulatory intervention,’” Pai told CNBC’s Jon Fortt, in a “Squawk Box” interview from the Mobile World Congress trade show in Barcelona, Spain.

NV Lawmakers Aim to Strengthen Consumer Protections on Payday Loans

CARSON CITY, Nev. - Two bills before the Nevada Legislature would tighten up the rules on payday lending, just as the Trump administration is proposing to loosen them. The Consumer Financial Protection Bureau recently proposed lifting the requirement that payday lenders verify that borrowers can pay back a loan. State Sen. Yvanna Cancela, D-Las Vegas, just introduced
Dollar Loan Center has distributed a packet to lawmakers that argues that a database would hurt the payday-lending industry, leave borrowers with less choice and be a risk for data breaches. A second bill, Assembly Bill 118 from Assemblywoman Heidi Swank, D-Las Vegas, would cap interest rates at 36 percent. Now, some payday loans have annual interest rates as high as 652 percent. Attempts at a similar cap have died in past legislative sessions.

Waters begins crackdown on credit reporting industry

House Democrats this week are kicking off work on the biggest overhaul of the consumer credit reporting industry in years, marking the first major legislative effort launched by new Financial Services Committee Chairwoman Maxine Waters.

CBA urges greater student loan transparency

On the heels of recently released survey findings determining student loans should carry clear, plain-language disclosures about the total costs, the Consumer Bankers Association (CBA) is advocating lending transparency.

CFPB Issues Small Entity Compliance Guide for Payday Loan Rule Payment Provisions

The CFPB has issued a new small entity compliance guide: “Payday, Vehicle Title and High-Cost Installment Lending Rule: Payment-Related Provisions.” The CFPB has proposed to revise its final payday/auto title/high-rate installment loan rule to rescind the rule’s ability-to-repay (ATR) provisions in their entirety and to delay the compliance date for the ATR provisions until November 19, 2020. However, its proposals would leave unchanged the rule’s payment provisions and continue to require compliance by August 19 with those provisions.

Equifax expecting punishment from CFPB and FTC over massive data breach

Equifax is expecting various forms of punishment from the Consumer Financial Protection Bureau and the Federal Trade Commission over the credit reporting agency’s massive data breach that exposed the personal information of 148 million U.S. consumers to hackers. The company revealed the expected sanctions in a recent filing with the Securities and Exchange Commission. According to Equifax, the CFPB and FTC have both notified the company that they expect to seek “injunctive relief damages” in regards to the data breach. Beyond that, the CFPB plans to seek “civil money penalties,” the company said.

Rep. Maxine Waters vows to fully empower CFPB employees

House Financial Services Committee Chairwoman Maxine Waters recently sent a letter to employees of the Consumer Financial Protection Bureau, promising to fully empower them to protect consumers. In the letter, Waters said that CFPB had faced challenges over the past two years, and expressed her concern that morale is suffering at the agency. She said the CFPB should be a place employees can be proud of their work and confident of the value they provide in protecting consumers.

Millennials Are Facing $1 Trillion in Debt

More than a decade has passed since young Americans faced debt levels this high.   Debt among 19 to 29-year-old Americans exceeded $1 trillion at the end of 2018, according to the New York Federal Reserve Consumer Credit Panel. That’s the highest debt exposure for the youngest adult group since late 2007.

Attorney General Becerra, Senator Jackson Introduce Legislation to Strengthen, Clarify California Consumer Privacy Act

SACRAMENTO – California Attorney General Xavier Becerra and Senator Hannah-Beth Jackson today unveiled SB 561, legislation to strengthen and clarify the California Consumer Privacy Act (CCPA). The CCPA is landmark legislation passed in 2018 that provides groundbreaking protections for consumers in their ability to control the use of their personal data. California is the first in the nation to pass a law giving consumers this right. SB 561 helps improve the workability of the law by clarifying the Attorney General’s advisory role in providing general guidance on the law, ensuring a level playing field for businesses that play by the rules, and giving consumers the ability to enforce their new rights under the CCPA in court.

FTC Approves Final Order with SoFi

Following a public comment period, the Federal Trade Commission has approved a final consent order with SoFi, resolving allegations that it misrepresented how much money student loan borrowers have saved or will save from refinancing their loans with the company.

Debt Settlement Market to Witness Huge Growth (658.37 million $): Freedom Debt Relief, National Debt Relief, Rescue One Financial

HTF MI released a new market study on Global Debt Settlement Market with 100+ market data Tables, Pie Chat, Graphs & Figures spread through Pages and easy to understand detailed analysis. At present, the market is developing its presence. The Research report presents a complete assessment of the Market and contains a future trend, current growth factors, attentive opinions, facts, and industry validated market data. The research study provides estimates for Global Debt Settlement Forecast till 2025*. Some are the key players taken under coverage for this study are Freedom Debt Relief, National Debt Relief, Rescue One Financial, ClearOne Advantage, New Era Debt Solutions, Pacific Debt, Accredited Debt Relief, CuraDebt Systems

CSBS and OCC battle over discovery in lawsuit challenging fintech charter

Earlier this month, the Conference of State Bank Supervisors (CSBS) filed a brief opposing the OCC’s motion to dismiss the second lawsuit filed by CSBS to stop the OCC from issuing special purpose national bank (SPNB) charters to fintech companies.  That brief was accompanied by an “Alternative Motion for Leave to Conduct Discovery” filed by CSBS. The OCC argued in its motion to dismiss that CSBS cannot have standing to sue until the OCC approves an application for an SPNB charter because only then could a CSBS member suffer an injury in fact.  According to the OCC, since it is still several stages away from actually granting an SPNB charter, the matter continues to be both constitutionally and prudentially unripe for judicial review.

Hacks On UK Financial Services Firms Jump In 2018

The Circuit Split Over the Definition of ATDS Under the TCPA Continues

When the Telephone Consumer Protection Act (TCPA) was enacted in 1991, most American consumers were using landline phones, and Congress could not begin to contemplate the evolution of the mobile phone. The TCPA defines Automatic Telephone Dialing System” (ATDS) as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C § 227(a)(1).  In 2015, the Federal Communications Commission (FCC) issued its 2015 Declaratory Ruling & Order (2015 Order), concerning clarifications on the TCPA for the mobile era, including the definition of “Automatic Telephone Dialing System” (ATDS) and what devices qualify. The 2015 Order only complicated matters further, providing an expansive interpretation for what constitutes an ATDS, and sparking a surge of TCPA lawsuits in recent years.

FTC Announces Agenda for the Tenth Session of its Hearings on Competition and Consumer Protection in the 21st Century

The Federal Trade Commission today announced the agenda for the tenth session of its Hearings Initiative. The session, focused on competition and consumer protection issues in broadband markets, will take place on March 20, 2019 at the Constitution Center Auditorium at 400 7th St., SW, Washington D.C. The hearing originally was scheduled for January 16, 2019, but was postponed due to the government shutdown

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