At a glanceWednesday, May 29, 2019

Collection Industry News At A Glance - May 29, 2019
Wednesday May 29, 2019
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Resource Management Services, Inc. supports the concepts of benchmarking and best practices through our continued education and research projects.  At the Collection and Recovery Solutions 2019, we had the survey for creditors and servicers available at the Debt Connection Lounge.  Since our kickoff, Anthony and team have worked to fine-tune an audit oversight survey for creditors and debt buyers, and an audit oversight survey for agencies, attorneys and specialty vendors as well. 

To participate in the Creditor Audit Oversight Survey, please use the link below

To participate in the Agency Audit Oversight for agencies, attorneys and specialty vendors Survey, please use the link below:

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Stranded in State Court: Supreme Court Holds that Third-Party Counterclaim Defendants Cannot Remove Class-Action Counterclaims to Federal Court

As Congress appreciated when it enacted the Class Action Fairness Act of 2005 (CAFA), large, multistate class actions are better suited for federal courts, not state ones. Following that logic, the Supreme Court has since recognized (repeatedly) that CAFA is designed to encourage federal jurisdiction over certain class actions in order to avoid unfairness to defendants in state courts. As a result, the Court has shown a degree of solicitude toward pro-removal interpretations of the federal jurisdictional statutes when the interpretation of those statutes was in doubt.

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The Unlikely Partnership Between Community Banks And Fintech That’s Changing The Financial World

Fintech’s role as a disruptor in the financial space often aligns it with other technologies that have fundamentally altered the industries to which they were introduced. Just as streaming effectively drove video rental to digital-only, the promise of fintech is often portrayed as the displacement of stodgy brick-and-mortar banks in favor of primarily online banking. While that’s certainly a component of fintech’s influence on the financial industry, the way in which it is playing out in lending—arguably the largest aspect of fintech’s disruption in finance—reveals a far more complex relationship between big banks, community banks and their fintech counterparts,

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Learn the latest methods for Locating People and Assets – including how technology changes have forever changed how we skip.  Learn how to, when to, who to, and the ROI.  Plus, where is this industry heading – and preparing for the future.

Michael Goins of TD Bank, will return as the Moderator for this event.  Mike will preside over this comprehensive skip session – with 4 different panels.  From people locate, to solution options, to asset locate (both for dormant judgment and collateral) and through vendor oversight – this half-day session has the information and strategies you need to most effectively manage your collection and recovery operations in today’s world.  Learn what’s new and what’s changed in skip tracing solutions.

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Here are 5 things the CFPB will focus on in 2019

The Consumer Financial Protection Bureau recently published its spring 2019 rulemaking agenda, showing the regulatory matters it reasonably anticipates having under consideration during the period of May 1, 2019 to April 30, 2020. The CFPB explained that the new permanent Director Kathy Kraninger is now ready to begin rulemaking activities after having recently completed a listening tour. “A permanent director of the Bureau took office in December 2018,” the CFPB said in a statement. “The director recently completed a listening tour to engage with bureau stakeholders, employees and outside experts, building on feedback submitted through more than 88,000 public comments in response to the Bureau’s 2018 Call for Evidence initiative.” “The bureau expects to communicate further information about future planning and priorities in the coming months,” the bureau continued.

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Reading between the lines of CFPB’s regulatory to-do list

The biggest news about the Consumer Financial Protection Bureau's rulemaking to-do list may not be the items topping the agenda — but what was left off of it. The agency's recent spring rulemaking agenda includes significant items, including a new process for collecting small-business lending data as well as plans to update underwriting rules for loans backed by Fannie Mae and Freddie Mac. But a year and a half after the Trump administration assumed leadership of the bureau, heralding a series of regulatory relief changes, some in the industry might have been expecting more from the latest report.

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Millions of mortgage records leaked due to website flaw

Hundreds of millions of documents and personally identifiable information related to mortgage deals from First American Financial Corp. were leaked online due to a website vulnerability.   According to a report by KrebsOnSecurity, digitized records including bank account numbers and statements, mortgage and tax records, Social Security numbers, wire transaction receipts, and driver's license images were available – without authentication – to anyone with access to a web browser. records, Social Security numbers, wire transaction receipts, and driver's license images were available – without authentication – to anyone with access to a web browser.

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Global Payments and TSYS agree $21.5 billion merger, CEO says more software deals could follow

The financial-technology merger frenzy continued on Tuesday, as Global Payments Inc. officially announced a $21.5 billion all-stock deal for Total System Services Inc.   The deal is the third such combination to be announced in the payments industry this year that is focused on creating a two-party platform that can serve both financial institutions and merchants. Fiserv Inc. announced plans to acquire First Data Corp. in January, while Fidelity National Information Services Inc. said it planned to combine with Worldpay Inc. in March.

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FTC Launches Merchant Cash Advance Probe

The Federal Trade Commission has launched an investigation into the merchant cash advance industry just days after FTC Commissioner Rohit Chopra called on the watchdog to tackle unfair small business lending practices. The Washington Post reported late last week that the FTC has opened an investigation into potentially unfair contract terms imposed on small business borrowers by merchant cash advance companies and other small to medium-sized business (SMB) lending companies. The district attorney of Manhattan has also launched a criminal investigation into the industry, while the New York State attorney general’s office is in the midst of a civil probe into the matter that revealed last year, reports said.

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Mortgage-specific provisions in the CFPB’s proposed debt collection rules

Continuing our coverage of the CFPB’s proposed debt collection rules, this blog post will focus on a few provisions that pertain specifically to mortgage servicers. In part, the proposal continues the CFPB’s efforts to harmonize mortgage servicing regulation (which generally promotes communication with consumers) and debt collection regulation (which generally restricts communication with consumers).  The CFPB structured its mortgage servicing rules in a way that is intended to enable servicers to make a host of required communications without running afoul of the federal Fair Debt Collection Practices Act (FDCPA).  To accomplish this, the CFPB incorporated a variety of exceptions and alterations to the mortgage servicing rules to avoid FDCPA risk.

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OCC report highlights risks arising from innovation and nonbank competition

The OCC’s Semiannual Risk Perspective report focuses on key issues that pose threats to bank safety and soundness and legal compliance.  Among such issues discussed in the Spring 2019 report, which generally reflects bank data as of December 31, 2018, are risks arising from financial innovation and new technologies. One of the most significant issues discussed in the report involves artificial intelligence and alternative data, with the OCC highlighting the potential fair lending risks arising from these innovations.  It stresses the need for bank management to understand and monitor underwriting and pricing models to identify potential disparate impact and other fair lending issues.  The OCC observes that new technologies for evaluating and determining 

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51 attorneys general call on Betsy DeVos to cancel up to 42,000 disabled veterans’ student debts

WASHINGTON — In a letter sent to Education Secretary Betsy DeVos on Friday evening, 51 attorneys general called on the Education Secretary to automatically cancel disabled veterans' student debt, something that is not currently done by the Department of Education.    "We write to...urge the Department of Education to take prompt action to satisfy its statutory mandate to discharge the student loans of veterans who are permanently and totally disabled or otherwise unemployable," wrote the attorneys general. "As a nation, we have a moral obligation to assist those who have put their lives on the line to defend us." 

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Multibillion-Dollar B2B FinTech Firms Emerge From Investors’ Pockets

The B2B FinTech market flexed its muscles this week, with investments landing at alternative small business lending, payroll and Software-as-a-Service (SaaS). However, the big news includes the emergence of a new unicorn, as well as a B2B FinTech that — thanks to its latest funding — is now Europe’s most valuable FinTech. Plus, Salesforce announced a new fund to propel funding for the B2B space. The latest in B2B FinTech investments is below.

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Colorado Enacts Student Loan Servicer Licensing Law and Maryland Expands Regulation of Servicers

Colorado and Maryland have each enacted legislation regulating student loan servicers. On May 13, Colorado Governor Jared Polis (D) signed into law SB 19-002, and that same day, Maryland Governor Larry Hogan (R) signed HB 594.   The Colorado law, SB19-002, is the more sweeping of the two, establishing a licensing requirement for student loan servicers, similar to what has been enacted   in California, Connecticut, the District of Columbia, Illinois, Washington, and more recently, New York. Titled the “Colorado Student Loan Servicers Act,” SB19-002 will require servicers of education loans owed by Colorado residents to be licensed by Colorado’s Uniform Consumer Credit Code (UCCC) Administrator. The law also:

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Consumer Financial Protection Bureau Launches Financial Education Tool for Active-Duty Servicemembers

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) significantly expanded its Misadventures in Money Management financial education tool to active-duty servicemembers. Misadventures in Money Management was initially developed for future servicemembers who signed a contract to enlist in the armed forces, but had not yet shipped off to basic military training. Today the CFPB is expanding the program to be available for all servicemembers on active duty, including in the Reserve or the National Guard.

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FTC Returns Nearly $315,000 to Consumers Who Bought Worthless Credit Card Interest Rate Reduction Programs

The Federal Trade Commission is mailing 305 checks totaling $314,945 to consumers who paid up-front for worthless credit card interest rate reduction programs pitched by Payless Solutions using illegal robocalls.   According to the FTC’s complaint, filed jointly with Florida’s Office of the Attorney General, the Orlando-based defendants illegally called thousands of consumers nationwide—including many seniors—and claimed their program would save them at least $2,500 and enable them to pay off their debts more quickly. After convincing consumers to provide their credit card information, the defendants then charged between $300 and $4,999 up-front for their worthless service. The agencies also alleged that in some cases the defendants illegally charged consumers without their consent.

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Leading U.S. Lenders Believe Collections to be Digitally Transformed in Next Two Years, says FICO and Aite Group

FICO, a leading analytics company, today announced results of a research report with Aite Group, a global research and advisory firm delivering comprehensive, actionable advice on business, technology and regulatory issues within the financial services industry. While lenders have invested in creating frictionless account opening and customer management processes, the report found that collections is one area along the credit lifecycle that is lagging behind in moving to a digital-first, customer-centric approach. The report shows the need to transform the debt collections process by investing in more analytics and technology to drive efficiencies and improve customer engagement. 

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U.S. Fed may tweak key ‘reverse repo’ rate: minutes

NEW YORK (Reuters) - The Federal Reserve may consider tweaking how much it pays mortgage agencies, money market funds and other non-banks in certain Treasury-backed transactions, the U.S. central bank’s minutes released on Wednesday showed. The minutes also showed that the Fed’s current patient approach to setting monetary policy could remain in place “for some time.” The Fed uses what is known as a reverse repurchase agreement (repo) program to control interest rates. Reverse repos, together with the interest the Fed pays banks on reserves they keep at the Fed and the term deposit facility, helped the Fed manage short-term interest rates after it raised them from rock-bottom levels after the 2008 global financial crisis.

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House rebukes Mulvaney’s efforts to rein in consumer bureau

The House voted Wednesday to undo the Trump administration’s reining in of the Consumer Financial Protection Bureau (CFPB) and prevent future directors from replicating those efforts. The bill from Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, passed the chamber along party lines in a vote of 231 to 191, with no Republicans supporting the measure. Called the Consumers First Act, the bill aims to reverse actions taken by former CFPB Acting Director Mick Mulvaney to loosen the bureau’s oversight of financial firms, rollback agency regulations, reorganize key departments and rebrand the polarizing watchdog.

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Technology could transform delinquencies says FICO survey

Technology is already changing how we do business and growing investment in collections is set to bring about a revolution in this area too. A new survey of senior leaders from large US banks, credit unions, and nonbank lenders conducted for FICO has found that the collections process is expected to get a tech makeover in the coming years. While the largest focus for tech investment by consumer lenders is originations and compliance (each up 63% from last year) followed by marketing (up 53%), there is also increased IT spend for servicing and collections (each up 42%).

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FDIC Resolves Payday Lender Lawsuit

The Federal Deposit Insurance Corporation (FDIC) has resolved a lawsuit with Advance America, Cash Advance Centers, Inc.; Check Into Cash, Inc.; and Northstate Check Exchange. Advance America et al. v. Federal Deposit Insurance Corporation et al. (D.D.C.). The lawsuit had alleged terminations of payday lender bank accounts. In exchange for the plaintiffs' agreement to dismiss the lawsuit, the FDIC is issuing: (1) a statement summarizing its longstanding policies and guidance regarding the circumstances in which the FDIC recommends that a financial institution terminate a customer's deposit account and reiterating preexisting public guidance to financial institutions about providing banking services and carrying out Bank Secrecy Act obligations; and (2) a cover letter transmitting the statement to the plaintiffs that reiterates prior correspondence from the FDIC Chairman, summarizes applicable FDIC policy, and notes that the FDIC is conducting additional training of its workforce.

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Massachusetts Consumer Data Privacy Bill Could Dramatically Expand Class Action Litigation Risk

Earlier this year, Massachusetts state senators introduced a consumer data privacy bill with a private right of action that could become the broadest in the country. The proposed law, An Act Relative to Consumer Data Privacy (S.120) would create a new category of litigation in local, state, and federal courts against businesses that collect personal information from Massachusetts consumers.

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Regulators Should Rescind ‘Small-Dollar’ Loan Rule

The Consumer Financial Protection Bureau is one of the most controversial regulators in Washington, D.C. Since its founding in 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the bureau has faced relentless scrutiny for its unconstitutional structure, reckless spending, aggressive enforcement activity, and flawed rulemakings, to name a few.
Critics have pointed out time and again the dire need for wholesale reform at the bureau. Fortunately, there is no better time than now. In late 2018, the Senate confirmed Kathleen Kraninger to head the bureau for a five-year term. With a new, permanent director installed, Kraninger has a unique opportunity to champion wide-ranging reforms, including everything from rulemakings to hiring practices.

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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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