At a glanceFriday, May 17, 2019

Collection Industry News At A Glance - May 17, 2019
Friday May 17, 2019
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Wireless carriers tell FCC they stopped selling user location data to aggregators

The top national wireless carriers in the U.S. have told the Federal Communications Commission they stopped selling customer location data to third-party aggregators.  The top national wireless carriers in the U.S. have told the Federal Communications Commission they stopped selling customer location data to third-party aggregators.

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Consumer Financial Protection Bureau Files Suit Against Forster & Garbus, LLP

The Consumer Financial Protection Bureau today filed a lawsuit in the federal district court in the Eastern District of New York against Forster & Garbus, LLP, a New York debt-collection law firm.  The Bureau’s complaint alleges that Forster & Garbus violated the Fair Debt Collection Practices Act by representing to consumers that attorneys were meaningfully involved in its lawsuits when, in fact, attorneys were not meaningfully involved in preparing or filing them. The Bureau’s complaint also alleges that Forster & Garbus violated the Consumer Financial Protection Act’s prohibition against deceptive acts and practices by making such representations to consumers through its lawsuits. 

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Labor, Consumer Groups Challenge CFPB Proposal to Ease Payday Loan Regulation

A coalition of consumer and labor groups is challenging the Consumer Financial Protection Bureau’s proposal to ease an Obama-era restriction on payday lenders, using language that suggests there are legal grounds to block the new rule. CFPB Director Kathy Kraninger in February introduced the bureau’s proposed plan to effectively unwind regulation imposing underwriting standards on payday lenders, which was originally supposed to go into effect Aug. 19. The proposed rule has been championed by payday and auto title lenders but opposed by consumer groups.  The coalition, led by Americans for Financial Reform and the Center for Responsible Lending, submitted its 220-page comment Thursday, when the comment period on the CFPB’s proposal closed. The consumer advocates called the proposal “arbitrary and capricious,” a direct reference to the Administrative Procedure Act, which tells courts to invalidate agency actions that are found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

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Fintech, Loans and A New Financial Revolution

Investors and borrowers are highly interested in Fintech and its incredible potential. This new type of financial service is bringing a new edge to the banking sector as a whole and gives different types of clients the convenience to find competitive, advantageous services.

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CFPB Chief Says Education Department Is Blocking Student Loan Oversight

The director of the Consumer Financial Protection Bureau says the Trump administration's Education Department is getting in the way of efforts to police the student loan industry. The revelation, in a letter obtained by NPR, comes at the same time that lawsuits allege that widespread wrongdoing by student loan companies is costing some borrowers thousands of dollars.

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WASHINGTON, May 15, 2019—Federal Communications Commission Chairman Ajit Pai is proposing bold action to help consumers block unwanted robocalls. He has circulated a declaratory ruling that, if adopted, would allow phone companies to block unwanted calls to  their customers by default. In addition, companies could allow consumers to block calls not on their own contact list. The accompanying draft Further Notice of Proposed Rulemaking would propose a safe harbor for providers that implement network-wide blocking of calls that fail caller authentication under the SHAKEN/STIR framework once it is implemented.

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Solutions by Text wants to applaud the Consumer Financial Protection Bureau in understanding the popularity of communicating via text message and incorporating that communication channel in its proposed rule implementing the Fair Debt Collection Practices Act.   The CFPB earlier this week released its proposed debt collection rule to update and amend the FDCPA, which was initially enacted in 1977 and, in fact, references telegrams and collect calls. The FDCPA does not currently include any provision that explicitly governs the use of digital technologies, such as text messaging and email, despite the widespread popularity that both channels share among consumers. 

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CFPB sued for not collecting data on business lending to women, minorities

A California community group has filed suit against the Consumer Financial Protection Bureau, accusing it of failing to collect data from banks on lending to women- and minority-owned small businesses as required by federal law. Filed on Tuesday in San Francisco federal court, the lawsuit by the California Reinvestment Coalition said the data is critical to identifying “credit deserts” where the small businesses may have difficulty getting loans. The 2010 Dodd-Frank Wall Street reform act required the CFPB to collect and publish the data but the bureau has not done so, the lawsuit said.

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How FinTech is driving innovative lending

The benefits of a thriving SME sector are clear and regularly cited by governments and economists. In Singapore, SMEs account for around two-thirds of the workforce and a large chunk of GDP growth. But if these firms can’t get funding, their failure to thrive has a dampening effect on the larger economy. For larger companies and multinationals, the options for accessing credit are established and numerous, but for sole proprietors and small businesses, the most frequent solution is to seek a loan. Their traditional route for sourcing loans has been to approach the banks, but for those with no credit history, insufficient collateral, or no proof of a stable revenue stream for repayments, credit solutions offered by banks have remained out of reach – a situation ripe for technological disruption. 

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CUs, NAFCU meet with regulators on payday lending

NAFCU met with the CFPB and NCUA yesterday to discuss issues related to payday lending, including the bureau's proposal to delay and change some requirements of its payday lending rule and credit unions' payday alternative loans (PALs) programs. NAFCU's advocacy efforts led the bureau to take into account credit unions' concerns in the final 2017 rule and create a safe harbor for PALs.

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Consumer groups oppose allowing debt collectors to email, text and call seven times a week

Consumer advocacy groups across the country are encouraging the public to voice objections to a proposal last week from the Consumer Financial Protection Bureau to change the rules on how debt collectors contact people.  Under the plan, creditors could call debtors up to seven times a week, plus send emails and text messages.   “These new rules will sanction seven calls a week per account per debtor,” said Margot Saunders, senior counsel at the National Consumer Law Center in Washington, D.C. “Most consumers with overdue debts have several accounts overdue. Usually something terrible has happened and they don’t have any money.”

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WASHINGTON, May 13, 2019—Federal Communications Commission Chairman Ajit Pai today announced another significant step in ensuring implementation of more reliable caller ID information to combat malicious spoofed robocalls. The Chairman expects major phone companies to  emplement SHAKEN/STIR caller ID authentication standards this year, and he will host a summit on July 11, 2019 to examine industry’s progress toward meeting this deadline. The summit will also identify any challenges to   deployment of the SHAKEN/STIR framework and discuss how best to overcome them.

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CFPB details plan to reconsider and potentially eliminate existing rules

The Consumer Financial Protection Bureau is already in the midst of enacting changes to some of its rules, namely the requirements for the data collection and reporting stipulated by the Home Mortgage Disclosure Act and its enforcement practices, but those may not be the only rule changes coming from the CFPB. The CFPB announced Monday that it plans to “periodically” review its regulations and may amend or even abolish existing rules. According to the CFPB, the review of its rules is stipulated by the Regulatory Flexibility Act, which establishes that agencies should review certain rules within 10 years of their enactment and consider those rules’ impact on “small businesses.”

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CFPB Director Kraninger Announces Deputy Director

Washington, D.C. — Consumer Financial Protection Bureau (CFPB) Director Kathleen L. Kraninger today announced that Brian Johnson will serve as the Deputy Director. Mr. Johnson first joined the Bureau in December 2017 as Senior Advisor to the Director and was named Principal Policy Director in April 2018. Mr. Johnson has served as Acting Deputy Director since July 2018. 

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Consumer Financial Protection Bureau Outlines Plan to Review Rules Under the Regulatory Flexibility Act

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) published a notice on how it plans to periodically review regulations under the Regulatory Flexibility Act (RFA) and to request public input. Additionally, the Bureau published a notice requesting public input as part of its first RFA review examining the 2009 Overdraft Rule. 

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This week: NAFCU monitoring financial regulators, payday hearings

Ahead of a hearing Thursday where lawmakers are set to discuss the CFPB's proposed repeal of the payday lending rule, NAFCU and member credit unions will meet today with the bureau and NCUA to discuss the payday lending rule and credit unions' payday alternative loans (PALs) programs.

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Why creditors and servicers should care about the CFPB’s proposed debt collection rules

The Bureau’s proposed debt collection rules, released last week, only apply to debt collectors, as defined under the Fair Debt Collection Practices Act.  So, why should creditors and servicers be interested in them?  Lots of reasons. First, a number of provisions call for creditors (or by extension, servicers) to take action before a debt is assigned to a collection agency in order to facilitate the collection agency’s use of electronic communications with the consumer.  The various provisions that allow a consumer’s consent to receive electronic communications to be transferred from a creditor to a debt collector either require the creditor to keep records of the consumer’s prior E-SIGN consent, or require the creditor to make a disclosure to the consumer about placement of the debt with a collection agency, and then track any consumer opt-outs from receiving electronic communications from the debt collector. 

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It could become easier for people with student debt to file for bankruptcy

Lawmakers have introduced a bill that would make it easier for student loan borrowers to cancel their debt in bankruptcy. The measure, which is supported by 14 Democrats, one Republican and one independent, is dubbed the Student Borrower Bankruptcy Relief Act of 2019. “Americans struggling financially should have the option to discharge their student loans during bankruptcy as a last resort,” said John Katko, R-New York. “This bipartisan legislation makes that change.” A number of consumer advocacy groups, including Americans for Financial Reform, the National Consumer Law Center and the Center for Responsible Lending, praised the bill. “It’s important to have legislation that will provide vulnerable student loan borrowers who cannot repay their debt with a pathway to reestablish their financial stability,” said Cheye-Ann Corona, a senior policy associate at the Center for Responsible Lending.

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BankThink It’s a mistake to dismiss CFPB’s complaint database

The Consumer Financial Protection Bureau has frequently been criticized for inaccurately portraying the number of complaints in its database. Because the CFPB frames “mere” inquiries as complaints too, the validity of its data is being challenged. But customer voices are a business’s most valuable asset and need to be taken seriously — whether they are categorized as complaints or inquiries. When people turn to the CFPB with a complaint or an inquiry, they have an issue that hasn’t yet been resolved. With approximately one million complaints accepted over the course of seven years, the CFPB’s volume of complaints is not small. The banking industry should pay attention to each and every complaint, regardless of how many complaints there are in total.

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Industry Events

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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