At a glanceWednesday, March 27, 2019

Collection Industry News At A Glance - March 27, 2019
Wednesday March 27, 2019
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Payday lending bill will be changed; how is the question

INDIANAPOLIS (Statehouse File) — There is zero chance the payday lending bill will advance in the form it passed the Senate, House Financial Institutions Chairman Woody Burton said after a lengthy hearing on the controversial bill. But what will happen to Senate Bill 613 is unclear. Burton urged those who support the measure and opponents who want it dead to seek compromise. The result could be a substantially amended bill that still keeps some form of payday lending, a bill reduced to just a summer study committee of the issue, or no bill at all.

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Collection and Recovery Solutions 2019 is pleased to announce Rich Karlgaard, Publisher and Futurist, Forbes Media, as the Keynote Speaker, on “Best Practices in Business Adaptability”, at the Four Seasons Hotel, Las Vegas May 8 – 10, 2019.  Forbes publisher and global futurist, Rich Karlgaard, cuts through the clutter. He forecasts the business and technology world as it is likely to unfold over the next two, five, and ten years.

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Climate Change and the Federal Reserve

Climate change describes the current trend toward higher average global temperatures and accompanying environmental shifts such as rising sea levels and more severe storms, floods, droughts, and heat waves. In coming decades, climate change—and efforts to limit that change and adapt to it—will have increasingly important effects on the U.S. economy. These effects and their associated risks are relevant considerations for the Federal Reserve in fulfilling its mandate for macroeconomic and financial stability.

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Report: Half of Breaches Trace to Hacking, Malware Attacks

Beazley Breach Response Services, a unit of global insurance company Beazley, reports that nearly half of the more than 3,300 breaches it investigated last year traced to a hack attack or malware infection. And half of those hacking/malware attacks were tied to business email compromise schemes. The rise of business email compromise - aka CEO fraud - has been well documented. By last July, global losses due to BEC attacks had reached at least $12.5 billion, the FBI warned (see: CEO Fraud: Barriers to Entry Falling, Security Firm Warns). David Stubley, who heads security testing firm and consultancy 7 Elements in Edinburgh, Scotland, says attackers increasingly target cloud-based email environments, including Office 365 email inboxes

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GAO: Equifax-Like Breaches Require Greater Civil Penalties

One way to ensure greater protection for consumers and their personal information following massive data breaches is to give the U.S. Federal Trade Commission the ability to impose greater civil penalties against consumer reporting agencies, such as Equifax, a new government report concludes. That conclusion is part of the report issued on Tuesday by the Government Accountability Office, "Consumer Data Protection: Actions Needed to Strengthen Oversight of Consumer Reporting Agencies." The document is in response to questions raised by Sen. Elizabeth Warren, D-Mass., and Rep. Elijah Cummings, D-Md., about the Equifax data breach. The report also comes as the House Committee on Oversight and Reform is conducting hearings about data security at consumer reporting agencies.

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Citi to Build Digital Consumer Payments Business for Institutions

New York – Citi’s Treasury and Trade Solutions (TTS) is developing a new business line for consumers to make digital payments to institutions. This is part of TTS’s overall strategy to enable digital commerce for clients and extend its significant presence and capabilities beyond the wholesale payments space. Under this umbrella, a new planned service will be made available to offer institutional merchants the ability to collect from a wide range of payment methods including cards, e-wallets and new and innovative bank transfers such as Request to Pay and Open Banking—as they gain traction. In turn, their consumers will have access to a wide variety of payments methods of their choice.

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FTC Seeks to Examine the Privacy Practices of Broadband Providers

The Federal Trade Commission issued orders to seven U.S. Internet broadband providers and related entitiesseeking information the agency will use to examine how broadband companies collect, retain, use, and disclose information about consumers and their devices.

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Tim Cook says Apple Card is a game changer. Experts are not so sure

New York (CNN Business)Apple CEO Tim Cook said Monday that the tech company's new credit card would be "the most significant change in the credit card experience in 50 years." But not everyone's buying it. The card, which will push users toward Apple Pay, offers a run-of-the-mill suite of spending rewards, and the security features — while laudable — don't move the needle, according to analysts. Apple's first credit card will debut this summer in partnership with Mastercard (MA) and Goldman Sachs (GS), the issuing bank. Notably, the card is built into the iPhone's Apple Wallet app, and a physical, laser-etched titanium card is optional. The card has no annual or foreign transaction fees, and will allow users to track spending by category on their phones. Cash back registers daily.

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Stay On CFPB Payday Lending Rule Upheld

A federal judge late last week ordered a stay on the August 2019 compliance date tied to the “payday lending rule” mandated roughly two years ago by the Consumer Financial Protection Bureau (CFPB). As reported late last week across outlets such as American Banker, the rule had been drafted under the tenure of Richard Cordray, who had served as the previous director. The new Director Kathleen Kraninger has proposed eliminating one of the components of the rule, which put in place new underwriting requirements for lenders (such as verifying borrowers’ ability to repay the payday loans). The rule also had another component, focused on how often a lender can try to debit payments from a customer’s bank account.

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Consumer Backlash Meets Indiana Senate’s Payday Loan Bill

(Indianapolis, Ind.) - A coalition is urging Indiana lawmakers to stop a bill that would significantly expand high interest loans in the state.  Senate Bill 613 would allow loans with interest rates above 72 percent, which is currently considered felony loan sharking. Indiana veterans groups, faith organizations and social service agencies say the bill would open the door to predatory lending practices. But supporters maintain it fills a gap for borrowers, between traditional bank or credit union loans and payday lending. Erin Macey, a senior policy analyst with the Indiana Institute for Working Families, says the only winners would be the payday lenders.

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The Asset Management Industry Should Take the Lead on A.I. Standards

The increased sophistication of fintech poses many policy concerns, especially when harnessing A.I. in asset management. Currently, there is a lack of international regulatory standards for A.I. and machine learning in asset management. Since A.I. is already being used by investment managers to improve operational structure, investment strategy, and trading efficiency, the need to address this policy gap is urgent.

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Proposed Amendment to FTC Cybersecurity Rules Could Affect Retirement Plans

The Federal Trade Commission is considering amendments to cybersecurity rules that could have an impact on retirement plan professionals. Earlier this month, the FTC voted 3-2 to propose amendments to the Standards for Safeguarding Customer Information, which became effective in 2003 and require that financial institutions develop, implement and maintain a comprehensive information security program. They also propose to amend the Privacy of Consumer Information Rule under the Gramm-Leach-Bliley Act, which went into effect in 2000 and requires financial institutions to inform customers about their information-sharing practices and allow customers to opt out of having their information shared with certain third parties.

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Payday lenders get unexpected reprieve from CFPB rule

A federal judge delivered another victory to payday lenders by leaving in place a stay on the compliance date for the Consumer Financial Protection Bureau’s 2017 payday lending rule. That rule, drafted under former CFPB Director Richard Cordray, had two key components: new underwriting requirements for high-cost, small-dollar lenders, and limits on how often a lender can attempt debiting payments from a borrower's bank account.

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The 2019 MIT Fintech Conference: A Show Review

On Friday, March 8, I attended the 2019 MIT Fintech Conference at the Aloft Boston Seaport Hotel in downtown Boston. This was the fifth annual conference planned and hosted entirely by a team of graduate students, primarily from the MIT Sloan School of Management and Harvard Business School. I was impressed by the quality and professionalism of the event, which exceeded some professional events I have attended. Most of all, I was impressed by the energy and enthusiasm of the students for the fintech space; one of the bank panelists during the event lamented that banking had become perceived as “boring” by students over the years, hindering recruitment.  I think that is changing; the conference sold out well in advance, and had about an equal mix of students and professionals. If incumbent financial institutions can find a home for these students, they will be well positioned for the future.

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Opinion analysis: An extremely narrow Fair Debt Collection Practices Act ruling

On Wednesday, the Supreme Court unanimously affirmed the U.S. Court of Appeals for the 10th Circuit in Obduskey v. McCarthy & Holthus LLP, holding that parties who enforce security interests are not debt collectors within the meaning of the Fair Debt Collection Practices Act provided that they do no more than the bare minimum required by state law to enforce the security interest. Justice Stephen Breyer’s opinion for the court is short and primarily focused on the text of the statute. After the argument, in which the justices sounded skeptical about the petitioner’s reading of the text, this outcome is hardly surprising. Indeed, the most notable thing about this case is probably Justice Sonia Sotomayor’s concurrence.

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Resource Management Services, Inc. is pleased to announce Marian Sangalang, Vice President of The Bureaus, Inc. and currently President of RMA International, will moderate a roundtable, “Best Practices in Debt Sales at the Collection and Recovery Solutions 2019 conference at the Four Seasons Hotel, Las Vegas May 8 – 10, 2019.

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California Consumer Loans Exempt from Usury May Be Deemed “Unconscionable”

In a little-noticed development with significant ramifications, the California Supreme Court ruled in De La Torre v. CashCall Inc., S. Cal. 5th 966 (2018), that the interest rate on consumer loans of $2,500 or more may render the loans  "unconscionable” under the California Financial Code—even though the loan is not usurious under California law. The financial product that is subject to the  litigation is an unsecured $2,600 loan, payable over a 42-month term, with an  annual percentage rate of up to 135%, which is typically made to subprime borrowers.

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Nevada joins coalition against abusive payday lending

Nevada Attorney General Aaron Ford is pressuring the Consumer Finance Protection Bureau to enforce a rule that would protect borrowers from abusive lending. In 2017, the CFPB announced a new rule that would protect borrowers and ensure they would have the ability to repay loans, while also prohibiting lenders from using abusive tactics for repayment, the Attorney General’s office said in a statement. The rule went into effect in 2018 and was meant to protect borrowers and stop lenders from using abusive tactics to get people to repay their loans, but compliance was delayed until Aug. 19 of this year. The protection bureau has proposed to delay compliance until Nov. 19 — three years after the regulation was finalized — and is now looking into another rule that would rescind this ruling entirely, according to a statement from the Nevada attorney general’s office.

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Why Cybersecurity Planning Should be an Integral part of the Marketing Function

Imagine yourself a member of a marketing department in any organization. You spend most hours of your days every week for the past years; designing, building and launching marketing campaigns and developing customer relationships. As well as developing your organization’s brand awareness, your main goals include attracting new customers as well as retain existing ones. After tremendous efforts and dedication, you succeed in attracting new customers and having them trust in exchanging value with your organization. Then, your organization becomes the victim of a cyber-attack and a data breach takes place, and unpleasantly the breach results in the exposure of your customers’ data.

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Consumer bureau chief reverses efforts to sideline advisory panels

The director of the Consumer Financial Protection Bureau (CFPB) will reverse some of her predecessors’ efforts to reduce the size and stature of four advisory boards, the agency announced Thursday.   CFPB Director Kathy Kraninger will instead lengthen the terms of members on four committees from industry and consumer advocates that advise the bureau and also have the panels meet more frequently.

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CFPB Announces Enhancements to Advisory Committees and Opening of Member Applications

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (Bureau) announced enhancements to its advisory committee charters. The enhancements are a result of CFPB Director Kathleen L. Kraninger’s engagement with current and former advisory committee members during her three-month listening tour. “I’ve seen firsthand how the Bureau benefits from the valuable input provided by committee members. I have also seen how the joint committee meeting is resulting in members sharpening their ideas by engaging in a thorough dialogue,” said Director Kraninger. “These enhancements demonstrate my commitment to ensuring that the Bureau’s advisory committees are helping to improve our work on behalf of consumers.”

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U.S. Supreme Court Holds FDCPA Has Extremely Limited Applicability to Persons Engaging in Nonjudicial Foreclosure Proceedings

The U.S. Supreme Court handed down its much-anticipated opinion in Obduskey v. McCarthy & Holthus LLP on March 20, ruling the federal Fair Debt Collection Practices Act does not cover persons engaged in “non-judicial foreclosures” except with respect to a single provision contained in the FDCPA. Colorado, like many western states, has a procedure that allows a lender to foreclose property without the need to file a lawsuit. Here, as you may recall, a Colorado borrower defaulted on his home loan and the mortgage servicer hired a law firm to pursue a non-judicial foreclosure. The borrower informed the law firm he was disputing the debt and the law firm, without responding to the dispute, proceeded with the non-judicial foreclosure.

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CFPB Proposal on Debt Collection Expected This Spring

The Consumer Financial Protection Bureau is expected to issue a notice of proposed rulemaking this spring to address a number of issues related to debt collection, including communication practices and consumer disclosures, according to its annual report to Congress on the Fair Debt Collection Practices Act released today. The report—which summarizes efforts by the CFPB and the Federal Trade Commission to enforce the FDCPA and educate consumers about debt collection—noted that the bureau fielded more than 81,000 complaints from consumers about first- and third-party debt collectors in 2018, and engaged in six public enforcement actions arising from alleged FDCPA violations.

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Consumer Financial Protection Bureau Releases Report on 2018 Administration of the Fair Debt Collection Practices Act

Washington, D.C. — The Consumer Financial Protection Bureau (Bureau) released the annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA). The report highlights the continued efforts by the Bureau and the Federal Trade Commission (FTC) to stop unlawful debt collection practices, including vigorous law enforcement, education and public outreach, and policy initiatives. The two agencies reauthorized their memorandum of understanding on Feb. 25, 2019 that provides for coordination in enforcement, sharing of supervisory information and consumer complaints, and collaboration on consumer education. The Bureau and the FTC continue to work closely to coordinate efforts to protect consumers.  

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FTC and CFPB Report on 2018 Activities to Combat Illegal Debt Collection Practices

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (Bureau or CFPB) reported on their 2018 activities to combat illegal debt collection practices. The annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA) highlights both agencies’ efforts to stop unlawful debt collection practices, including robust law enforcement, education and public outreach, and policy initiatives.

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Everything you need to know about router security to avoid getting hacked by cybercriminals

The bad news: most people don’t give a second thought to their routers. This lack of know-how puts a lot of households in a dangerous position. The United States Computer Emergency Readiness Team (US-CERT) has issued an alert about Russian state-supported hackers carrying out attacks against a large number of home routers in the U.S. Some routers are inherently flawed and can never be fixed. To help beef up your router’s security, here are five tactics for protecting your home network, devices and files from hackers.

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NAMB Pens Letter to CFPB on LO Compensation Regulations

The National Association of Mortgage Brokers (NAMB) has requested that the Consumer Financial Protection Bureau make immediate changes to Loan Originator compensation regulations. In a recent letter sent to CFPB Director Kathy Kraninger, NAMB President Richard Bettencourt addressed two specific initiatives: Permit voluntary reductions by Loan Officers to their compensation in response to competition, and to allow reductions to compensation when the Originator makes an error.

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Industry Events

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

NACTT 54th Annual Seminar Registration Open


JW Marriott Indianapolis 10 S. West Street Indianapolis, IN 46204
Indianapolis , IN
July 16 - 19 , 2019

800-445-8629 | 803-765-0860

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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More information about Debt Connection Symposium
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