At a glanceWednesday, May 22, 2019

Collection Industry News At A Glance - May 22, 2019
Wednesday May 22, 2019
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Dennis and Judy Hammond present Debt Connection Symposium and Expo 2019 where collection compliance takes center stage. An exciting concept in conferences – focusing on oversight, education, networking and connecting with clients, service providers, product suppliers, agencies and attorneys. Whether you are a Creditor, Debt Buyer, Collection Agency, Attorney or Industry Vendor, from the compliance, operations or relationship management side of the business, Debt Connection Symposium and Expo will provide you a high quality conference experience with a solid lineup of opportunities for your educational and networking needs.

With collections, compliance and accountability as our educational focus, we a take a fresh look at the operational decisions affecting our company’s goals, whether it impacts the protection of the consumer, the brand, or the company’s performance and continued existence.  Success and achievement are a combination of knowledge, relationships and action. These principles will be examined throughout the conference.

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Ransomware Not Gone but More Targeted, Report Says

Cyber-criminals continue to grow more sophisticated, developing advanced attack methods, including tailored ransomware, according to the Q1 Global Threat Landscape Report, published today by Fortinet. In addition to targeted attacks, criminals are also using custom coding, living-off-the-land (LotL) and sharing infrastructure to maximize their opportunities, the report said. Despite a decline in previous high rates of ransomware, ransomware itself is far from gone. Instead, cyber-criminals are using more targeted attacks. Ransomware “is being customized for high-value targets and to give the attacker privileged access to the network. LockerGoga is an example of a targeted ransomware conducted in a multi-stage attack. There is little about LockerGoga that sets it apart from other ransomware in terms of functional sophistication, but while most ransomware tools use some level of obfuscation to avoid detection, there was little of it used when analyzed,” the report said.

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AFCC Debt Settlement Market 2019 Study Offers in-Depth Analysis and Insights Forecasts by Focusing on Top company analysis- Rescue One Financial, Freedom Debt Relief, Pacific Debt, Accredited Debt Relief, CuraDebt Systems, Guardian Debt Relief

AFCC Debt Settlement Market Research Report 2019 revises in-depth Research of the Market condition and the competitive analysis globally. It Analyses the main factors of the AFCC Debt Settlement market based on Current Market situations, size, growth, share, segments, manufacturers, business overview and AFCC Debt Settlement scenario during the forecast period (2019-2025).

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Attorney General Josh Stein Gets Temporary Restraining Order Against Out-Of-State Payday Lender

RALEIGH, NC (May 21, 2019) — Attorney General Josh Stein was granted a temporary restraining order against the Miami, Fla.-based online payday lender Approved Financial, Inc. in a case he filed on May 15, 2019. The case alleges illegal, unlicensed lending practices, usury, unlawful debt collection, and unfair and deceptive practices. The temporary restraining order, entered by Superior Court Judge Stephen R. Futrell, prevents Approved Financial from soliciting, making, or collecting on loans to North Carolina consumers, and repossessing or selling their vehicles for the next 35 days until a preliminary injunction hearing.

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How proposed robocall rule could impact CUs in Compliance Blog

NAFCU Regulatory Affairs Counsel Mahlet Makonnen provides an update on the Federal Communications Commission's (FCC) declaratory ruling related to robocalls to resolve call-blocking uncertainty in the latest Compliance Blog post.   Makonnen flags that on June 6, the FCC will consider a declaratory ruling and Third Further Notice of Proposed Rulemaking (TFNPR) that would allow both voice service providers to automatically block suspected robocalls unless a consumer opts out.

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Merkley intros bill to protect patients’ credit scores

WASHINGTON - Sen. Jeff Merkley, D-Ore., introduced legislation, the Medical Debt Relief Act of 2019, on Tuesday, saying he wants to make sure Americans’ credit scores are not left in ruin simply because they had the misfortune of needing costly medical care.

The Medical Debt Relief Act is cosponsored by Sens. Richard Blumenthal (D-CT), Elizabeth Warren (D-MA), Bob Menendez (D-NJ), and Dick Durbin (D-IL).

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Allied Wallet Settles With FTC Over Fraudulent Payment Allegations

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PayThink Fed should step aside on real-time payments

Beyond its monetary policy and bank supervisory functions, many would be surprised to learn the Federal Reserve has a third role: operating, oddly enough, revenue-generating payments services that compete with private-sector systems.

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Underemployment for recent grads worse today than in early 2000s

The underemployment rate for recent college graduates is higher today than it was in the early 2000s. More people are working in jobs they’re overqualified for in order to make ends meet, taking jobs that don’t require a college degree. That’s despite a decade of low unemployment and economic growth and stock market highs.   As of March, the underemployment rate for workers aged 22 to 27 stands at 41.3%, according to the Federal Reserve Bank of New York.

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Spring 2019 rulemaking agenda

The Bureau is publishing its Spring 2019 Agenda as part of the Spring 2019 Unified Agenda  of  Federal Regulatory and Deregulatory Actions, which is coordinated by the Office of Management and Budget. As an independent regulatory agency, the Bureau voluntarily participates in the Unified Agenda. The agenda lists the regulatory matters that the Bureau reasonably anticipates having under consideration during the period from May 1, 2019, to April 30, 2020, as described further below

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California Senate passes legislation to create state-chartered cannabis banks

LOS ANGELES — The California Senate on Tuesday approved legislation to create state-chartered cannabis banks to help the industry get around restrictions on access to banking services. Under the state legislation, which was approved by a vote of 35 to 1, private banks or credit unions can apply for a limited-purpose state charter so they can provide depository services to licensed cannabis businesses. The measure, Senate Bill 51, still requires approval of the Assembly and California Gov. Gavin Newsom to become law. Marijuana businesses, including pot shops, are forced to deal predominantly in cash due to continued federal banking restrictions that make it nearly impossible for them to have bank accounts with federally chartered financial institutions. Passage in the nation’s most populous state could add pressure on the U.S. Congress to legalize banking for the marijuana industry.

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Operators of Payment Processing Firm Settle Charges for Assisting Fraudulent Schemes that Took More than $110 Million from Consumers

Payment processor Allied Wallet, its CEO and owner Ahmad (“Andy”) Khawaja, and two other officers, Mohammad (“Moe”) Diab and Amy Rountree, have agreed to settle Federal Trade Commission charges that they assisted numerous scams by knowingly processing fraudulent transactions to consumers’ accounts.   According to the FTC’s complaint, the operators of Allied Wallet knowingly processed payments for merchants that were engaged in fraud. These include merchants that were subject to law enforcement action by the FTC and the SEC, such as Stark Law, a phantom debt collection scheme; TelexFree, a pyramid scheme; and MOBE and Digital Altitude, two business coaching schemes that defrauded consumers with claims they would make substantial income.

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NAFCU files amicus supporting FCUs’ ability to bring suit in federal court

NAFCU yesterday announced that it has filed an amicus brief in support of Navy Federal Credit Union as the credit union appeals a lower-court decision that determined it did not have diversity jurisdiction to file a federal lawsuit.  In order to sue in federal court, certain criteria must be met: the plaintiff and defendant either have to have a federal case or controversy, or be citizens of different states. If this criteria is not met, then the lawsuit must be filed in state court.

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FCC’s Call Blocking Plans Could Create Problems for Collections

Plans announced on May 15 by the FCC to empower voice service providers to offer more aggressive call-blocking programs could create significant problems for creditors and debt collectors.  In addition to allowing providers to block unwanted calls by default, the FCC plans to allow providers to offer opt-in blocking in which a consumer can elect to block calls from any numbers that are not on the consumer’s own contact list.  Such opt-in blocking could result in the blocking of legitimate communication attempts, such as collection calls from creditors or debt collectors.

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CFPB: Proposed rule with request for public comment.

The Bureau of Consumer Financial Protection (Bureau) proposes to amend Regulation F, 12 CFR part 1006, which implements the Fair Debt Collection Practices Act (FDCPA) and currently contains the procedures for State application for exemption from the provisions of the FDCPA. The Bureau's proposal would amend Regulation F to prescribe Federal rules governing the activities of debt collectors, as that term is defined in the FDCPA. The Bureau's proposal would, among other things, address communications in connection with debt collection; interpret and apply prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection; and clarify requirements for certain consumer-facing debt collection disclosures.

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Fed Chair Powell: Business debt is rising but does not pose a threat to the system

Federal Reserve Chairman Jerome Powell said rising levels of corporate debt need watching but so far do not pose a threat to the financial system.  The central bank chief spoke Monday at the Financial Markets Conference in Amelia Island, Florida, on assessing risks to the financial system a decade after the end of the financial crisis that caused the economy to sink into its worst downturn since the Great Depression.

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Fannie Mae and Freddie Mac are refinancing fewer mortgages than at any point since the crisis

Recently released data from the Federal Reserve Bank of New York’s Center for Microeconomic Data revealed that the first quarter of this year was the mortgage business’ worst quarter in more than four years, but a deeper dive into the data shows that on the refinance side of things, it may have been the worst quarter since the financial crisis.

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Servicemembers exhibit higher levels of financial well-being than the U.S. population over

Recently, the Department of Defense (DoD) released its Annual Report on the Financial Literacy and Preparedness of Members of the Armed Forces, which shows that servicemembers exhibit slightly higher levels of financial well-being compared to the general U.S. population. Last month, the CFPB’s Office of Servicemember Affairs (OSA) released a research brief on the financial well-being of veterans. The research showed that veterans, similarly to servicemembers, experience somewhat higher levels of financial well-being than non-veterans.

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CFPB takes action against frivolous debt-collection lawsuits

The Consumer Financial Protection Bureau is cracking down on a debt-collection firm it says files lawsuits against consumers who may not actually owe debts. The CFPB is suing Forster & Garbus, a debt-collection law firm that contracts with Citibank and Discover, among other clients, in US District Court. The firm collects on home-equity loan, student loan, credit card and auto loan debts, among others, according to the complaint filed by the CFPB. The bureau alleged that Forster & Garbus violated the Fair Debt Collection Practices Act by representing that attorneys were “meaningfully involved” in preparing and filing its lawsuits. In fact, the CFPB alleged, Forster & Garbus basically rubber-stamped its lawsuits, giving debt files only a cursory review before deciding to sue consumers.

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FTC Extends Comment Deadline on Proposed Changes to Safeguards Rule

The Federal Trade Commission has agreed to extend by 60 days the deadline for the public to submit comments on proposed changes to the Safeguards Rule, which requires financial institutions to develop, implement, and maintain a comprehensive information security program.

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OCC Report Highlights Key Risks for Federal Banking System

WASHINGTON — The Office of the Comptroller of the Currency (OCC) today reported credit, operational, compliance, and interest rate risks are key themes for the federal banking system in its Semiannual Risk Perspective for Spring 2019.Highlights from the report include: Credit quality is strong when measured by traditional performance metrics, but successive years of growth, incremental easing in underwriting, risk layering, and building credit concentrations result in accumulated risk in loan portfolios. Operational risk is elevated as banks adapt to a changing and increasingly complex operating environment. Key drivers for operational risk include persistent cybersecurity threats as well as innovation in financial products and services, and increasing use of third parties to provide and support operations that are not effectively understood, implemented, and controlled. Compliance risk related to Bank Secrecy Act/Anti-Money Laundering (BSA/AML) is high as banks remain challenged to effectively manage money laundering risks.

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Attorney General Becerra Announces Arrests, Charges Against 10 Individuals in Southern California Vehicle Title Washing Scheme

SACRAMENTO – California Attorney General Xavier Becerra today announced the arrest of ten individuals for allegedly using fraudulent information on credit applications to purchase vehicles from various car dealerships located in Los Angeles, Orange, Riverside, San Diego, and San Bernardino Counties. After purchasing vehicles using false or stolen identities, the defendants would then file fraudulent documents with the California Department of Motor Vehicles to remove lienholders and obtain a “clean title” to the vehicles. The vehicles were then sold on Craigslist or to used car dealers. The complaint was filed in Los Angeles Superior Court.

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Is the Point-of-Sale Trend Putting Pressure on Plastic?

The latest entrant to the credit market, point-of-sale loans, may be shaking up how consumers finance large purchases. According to the TransUnion (NYSE: TRU) Q1 2019 Industry Insights Report, this phenomenon, combined with the popularity of credit card reward programs, may be particularly taxing for the private label card category.   Point-of-sale loans provide consumers with an instant offer of credit in the form of an unsecured personal loan at checkout. During the transaction, consumers receive the payment amount and loan term, and the loan is paid back in monthly installments. Consumers who may have previously financed either small or large purchases such as clothing, furniture, electronics or home improvement projects with a private label card are opting for point-of-sale financing or leveraging their bank-issued credit cards. As a result, the private label card market—those cards provided on behalf of specific retailers—is shrinking.

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Convoke Adds Support for New State Document Requirements

ARLINGTON, Va.May 20, 2019  -- Convoke, a leader in SaaS solutions for the debt collection market, today announced the most recent software update to its debt collections compliance and management hub.  Each year, Convoke develops and releases several updates to its platform to support its clients' evolving needs.  This release includes updates which support state-specific regulatory compliance requirements, along with other enhancements to features and functionality which help Convoke's customers to optimize recoveries while realizing material cost savings.

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AG Pax­ton Joins Coali­tion Urg­ing CFPB to Restore States’ Author­i­ty to Pro­tect Consumers

Attorney General Ken Paxton today joined a 12-state coalition – led by Indiana and Arkansas – in support of a proposal by the Consumer Financial Protection Bureau (CFPB) to rescind a 2017 CFPB rule and replace it with a new one governing small, short-term loans. The existing rule ignores the states’ traditional role as the lead consumer protection authorities, and it harms consumers’ freedom to make decisions about the types of financial products that best serve them.  

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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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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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Industry Events

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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