At a glanceWednesday, June 12, 2019

Collection Industry News At A Glance - June 12, 2019
Wednesday June 12, 2019
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CFPB To Hold First Symposium On June 25

WASHINGTON, D.C. – The Consumer Financial Protection Bureau announced today that its first symposium will be held on June 25 at 9 a.m. The symposium, part of a series announced earlier this year, will focus on the Dodd-Frank Act’s prohibition on abusive acts or practices. The symposium will be webcast on the Bureau’s website.    The Dodd-Frank Act authorizes the Bureau to take enforcement, supervision, and rulemaking actions concerning unfair, deceptive, or abusive acts and practices (UDAAP). The meaning of abusiveness is less developed than the meaning of unfair or deceptive, which have been defined substantially by the Federal Trade Commission Act. The symposium will provide a public forum for the Bureau and the public to hear various perspectives on the meaning of abusiveness.

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Returning to the stage – Mark Naiman, Absolute Resolutions Corp. and Manuel Newburger, Barron and Newburger. Joining them in the debate will be Christopher Mitcham, SNAAC and Thomas Nusspickel, American First Finance.  Topics are sure to be diverse – as we make plans now – we can take your recommendations as well. I’m sure you’ll see some operational debate on how to proceed with technology do’s and don’ts, regulations and of course, compliance concerns. Don’t miss this session – and the rest of Debt Connection Symposium & Expo. We’ll also have more sessions on Skip, Regulatory, Debt Settlement, Legal, Training and AI too! 

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Data security settlement with service provider includes updated order provisions

The domino principle. The ripple effect. The butterfly phenomenon. Apply the analogy of your choice to describe what happens  when one software developer’s allegedly lax security practices result in the breach of confidential customer information maintained  by multiple businesses that use the software. If your business is a service provider – or if your company uses third-party service providers to help manage your data – a proposed FTC settlementmerits your attention. One notable aspect of the case: a proposed order that includes new data security requirements reflecting the current Commission priority of updating its data security orders.

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Auto Dealer Software Provider Settles FTC Data Security Allegations

An Iowa company that sells software and data services to auto dealers has agreed to take steps to better protect the data it collects, to settle Federal Trade Commission allegations that the firm’s poor data security practices led to a breach that exposed the personal information of millions of consumers.  In a complaint, the FTC alleges that LightYear Dealer Technologies, LLC (doing business as DealerBuilt) failed to implement readily available and low-cost measures to protect personal information it obtained from its auto dealer clients.

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Capital One, Discover prepping for next downturn

In the latest sign of concern about the trajectory of the U.S. economy, two large credit card issuers signaled greater caution Tuesday about their willingness to make borrowing capacity available to consumers. The comments by the CEOs of Capital One Financial and Discover Financial Services suggested that the card industry has moved into a new stage of preparation for the eventual end of the nation’s decade-old economic expansion.

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Highlights of Director Kraninger’s First Six Months

WASHINGTON, D.C. – June 11th marks the first six months of Director Kathleen L. Kraninger leading the Consumer Financial Protection Bureau.  “It is an honor and privilege to serve American consumers. As Director, my focus is to prevent harm to consumers by using all the tools Congress gave us, including education, regulation, supervision and enforcement. I look forward to building on the efforts and progress of these first six months,” said Director Kraninger. 

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Civil rights groups question CFPB oversight of student loan market

Several civil rights groups have sent a letter to Director Kraninger questioning whether the CFPB is engaging in the oversight of the student loan market that they believe is necessary to “root out potentially discriminatory practices.”  In particular, the groups suggest that access to income-driven repayment programs is being provided “in an unequal way, with a disproportionate impact by race or sex.” The groups point to statements made by Director Kraninger at her March 2018 appearance before the House Financial Services Committee and in her May 2019 letter to Senator Elizabeth Warren regarding the CFPB’s supervision of student loan servicers as the source of their concern that the CFPB is ignoring its “independent oversight responsibilities and the immediate need for investigative action given the well-documented racial disparities in student loan outcomes.”

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How human bias impacts cybersecurity decision making

In a newly released report, Dr Margaret Cunningham, psychologist and Principal Research Scientist at Forcepoint, examined six universal unconscious human biases, how they can influence cybesecurity decision making, and urges infosec pros and leaders to make an effort to overcome them. Our days are filled with decision making: when should we wake up, what will we eat, what will we wear, what tasks we need to complete and how, should we meet with friends, and so on and so forth. Most of these decisions are made on “autopilot” – quickly, without thinking much about it, and based on our own preferences, intuition, or past experiences. But some decisions require more effort to gain a clear look at the entire situation, to overcome unconscious biases, and to perform more analytical and logical reasoning.

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Seila Law to seek U.S. Supreme Court review of Ninth Circuit ruling that CFPB’s structure is constitutional

Appellant Seila Law has filed a motion for a stay of the Ninth Circuit’s mandate in its decision ruling that the CFPB’s single-director-removable-only-for-cause structure is constitutional pending the filing by Seila Law of a petition for a writ of certiorari with the U.S. Supreme Court.  Seila Law has not sought a rehearing en banc by the Ninth Circuit. Appellant Seila Law had asked the Ninth Circuit to overturn the district court’s refusal to set aside a Bureau civil investigative demand, arguing that the CID was invalid because the CFPB’s structure is unconstitutional.  In rejecting the constitutional challenge, the Ninth Circuit relied on U.S. Supreme Court precedent, which in the Ninth Circuit’s view, “indicate that the for-cause removal restriction protecting the CFPB’s Director does not ‘impede the President’s ability to perform his constitutional duty’ to ensure that the laws are faithfully executed.”  The Ninth Circuit commented that “the Supreme Court is of course free to revisit those precedents, but we are not.”

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Fourth Circuit Upholds $61 Million Judgment Against Dish Network for Third-Party TCPA Violations

The recent decision of the U.S. Court of Appeals for the Fourth Circuit affirming the district court's judgment imposing more than $61 million in damages against Dish Network for its vendor's violations of the Telephone Consumer Protection Act (TCPA) serves as a reminder that companies can be held liable for consumer protection law violations committed by third-party vendors—and underscores the importance of maintaining strong vendor oversight.

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What a debut securitisation tells us about fintech

Today, Lendinvest, a company which makes property loans over the internet, launched its first securitisation. It is the latest of a handful of securitisations from the UK’s fintech sector. Zopa, the peer-to-peer consumer lending, and Funding Circle, have also done something similar. In the US, as usual, there has been more, and bigger, deals. The £259m Lendinvest securitisation is backed by buy-to-let loans. It’s worth briefly going into its model, because it illustrates the basic point of fintech: it’s not so much about new things, as the absence of old things, plus securitisation. The company makes its buy-to-let loans over an internet platform. The system works through the UK’s extensive broker system (the brokers fill most of the applications on behalf of prospective borrowers).

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Arizona Federal Credit Union acquires Pinnacle Bank

Today, Arizona Federal Credit Union announced its intended acquisition of the operations of Pinnacle Bank of Arizona. The 125,000 member-owners of Arizona Federal will benefit by gaining access to additional mortgage services, small business services, SBA financing options and commercial lending services. The 2,600 clients of Pinnacle Bank will benefit by gaining access to a full suite of consumer financial services, including loans, insurance, credit cards, investment services and more.

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CFPB Pushes Pause On Payday Rule

The Bureau of Consumer Financial Protection (CFPB) has delayed the Aug. 19, 2019 compliance date for the mandatory underwriting provisions for its short-term, small-dollar (payday) rule, according to various reports. Compliance is being delayed 15 months, to Nov. 19, 2020. The CFPB is also correcting several errors in the rule. The Consumer Bankers Association (CBA) commended the delay“CBA commends the Bureau for reexamining the small-dollar credit marketplace and how lenders in this market meet consumers’ need for credit. We believe it is important that consumers receive the products they want and need at fair prices and on transparent terms. We believe it is equally important to rid the market of bad actors that engage in fraudulent transactions or violate federal laws and fashion rules that deter such conduct,” the CBA said.

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Senators Urge CFPB To Reconsider Debt Collection Overhaul

A group of senators is urging the Consumer Financial Protection Bureau to reconsider a recently proposed overhaul of debt collection practices that among other things let collectors send unlimited electronic communications to consumers spanning emails and texts. As reported, a group of more than 20 senators had said in a letter to the CFPB — where the group was led by Democrats Bob Menendez of New Jersey and Sherrod Brown of Ohio — that the Fair Debt Collection Practices Act would incur costs to consumers who do not have unlimited data plans.  In addition they could be harmed by scammers urging them to click on hyperlinks.

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Cosmic Bowling Networking Returns to DCS2019

"It's Out of This World" bowling will be the theme of the Debt Connection Symposium & Expo 2019 Networking Bowling Event!  Start Practicing Now!  You might also want to start thinking about your Team Shirts/Outfits for our Best Dressed Team contest!  High Score and Low Score Prizes - no need to be a bowling ace to join the fun and network with peers at DCS2019.

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Wells Fargo agrees to pay $385M to settle car loan lawsuit

SANTA ANA, Calif. (AP) — Wells Fargo has agreed to pay at least $385 million to settle a California lawsuit alleging it signed up thousands of auto loan customers for costly car insurance without their consent, resulting in many having their vehicles repossessed.   The bank filed the agreement Thursday in a federal court in Santa Ana. It still needs a judge's approval.

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FTC Staff Provides 2018 Annual Financial Acts Enforcement Report to the CFPB

The staff of the Federal Trade Commission has provided its 2018 Annual Financial Acts Enforcement Report to the Consumer Financial Protection Bureau on its enforcement and related activities regarding Regulation Z (Truth in Lending Act), Regulation M (Consumer Leasing Act), and Regulation E (Electronic Fund Transfer Act).

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WASHINGTON, D.C. – Oregon’s U.S. Senators Jeff Merkley and Ron Wyden have joined 24 colleagues in calling on Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger to reverse a proposed rule that would, for the first time, allow debt collection companies to send unlimited texts and e-mails to consumers. Just last year, often abusive and threatening debt collection tactics led to some 82,000 consumer complaints to the CFPB and nearly 458,000 to the Federal Trade Commission.

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Phone companies must adopt robocall-blocking tech by year end: FCC

The FCC has voted to give phone companies permission to block obvious robocalls before they reach phones.   The new rules, announced last month, were approved by the commission Thursday, give safe harbor to phone companies to block the calls, so long as they have “reasonable call analytics” showing that a robocall is happening and that consumers are told what’s going on — and can opt out if they so choose. USTelecom, a large trade group for the phone companies, expressed approval.

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CFPB: Payday loan protections

The Bureau of Consumer Financial Protection is issuing this final rule to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the regulation promulgated by the Bureau in November 2017 governing Payday, Vehicle Title, and Certain High-Cost Installment Loans (2017 Final Rule or Rule). Compliance with these provisions of the Rule is delayed by 15 months, to November 19, 2020. The Bureau is also making certain corrections to address several clerical and non-substantive errors it has identified in other aspects of the Rule.

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U.S. FCC makes it easier for phone companies to block ‘robocalls’

WASHINGTON (Reuters) - U.S. regulators on Thursday voted to allow phone companies to block unwanted “robocalls” by default as Americans grapple with billions of deceptive and annoying calls every year. The Federal Communications Commission (FCC) also voted to allow carriers to let companies block any calls not on a consumer’s contact list if the customer opts in. Apple Inc announced this week its revised iPhone operating software will give consumers the ability to allow only calls to ring from numbers in contacts, mail, and messages and send all others to voicemail automatically. FCC commissioners conceded that the vote will not end all unwanted calls and urged carriers to take further steps to block them. Several commissioners urged mobile phone providers to offer those call blocking tools free of charge.

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Oregon Amends Data Breach Notification Law to Apply to Vendors

On May 24, 2019, Oregon Governor Kate Brown signed into law Senate Bill 684, which requires vendors, service providers and other entities that maintain or possess consumers’ personal information to notify consumers of a security breach.

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Michigan AG demands data breach information

LANSING, Mich. — Three companies will be receiving letters demanding information about a data breach that has affected 12 million people around the country per Michigan Attorney General Dana Nessel.   Nessel made the announcement Wednesday saying the breach has involved at least three companies, American Medical Collection Agency (AMCA), Quest Diagnostics and Optum360.

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American Medical Collection Agency breach impact reaches 20 million

A third medical testing company announced it has been impacted by the American Medical Collection Agency data breach, putting the total number of patients potentially affected at 20 million.   In an 8-K form filed with the U.S. Securities and Exchange Commission, OPKO Health, Inc., said 422,600 customers may have been impacted by a data breach through its subsidiary, BioReference Laboratories, Inc.

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Senators say Fair Debt Collection Practices Act proposal puts industry ahead of consumers

LOS ANGELES – More than 20 U.S. senators are calling on the Consumer Financial Protection Bureau to reconsider a proposal  that would allow debt collectors to send unlimited texts and emails to consumers, as well as call them seven times a week per debt.   Led by Sens. Bob Menendez, D-N.J., and Sherrod Brown, D-Ohio, 19 Democratic and two Independent senators have signed a letter expressing their concerns that the proposed update to the Fair Debt Collection Practices Act would allow debt collectors to contact consumers more than they already do. Signees include 2020 presidential hopefuls Sens. Kamala Harris, D-Calif.; Kristin Gillibrand, D-N.Y.; Cory Booker, D-N.J.; Elizabeth Warren, D-Mass.; and Bernie Sanders, I-Vt. Read the letter in its entirety at the bottom of this article.

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WASHINGTON, June 6, 2019—The Federal Communications Commission today voted to make clear that voice service providers may aggressively block unwanted robocalls before they reach consumers.  Specifically, the Commission approved a Declaratory Ruling to affirm that voice service providers may, as the default, block unwanted calls based on reasonable call analytics, as long as their customers are informed and have the opportunity to opt out of the blocking. This action empowers providers to protect their customers from unwanted robocalls before those calls even reach the customers’ phones. While many phone companies now offer their customers call blocking tools on an opt-in basis, the Declaratory Ruling clarifies that they can provide them as the default, thus allowing them to protect more consumers from unwanted to implement call blocking programs.

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Texas Passes Debt Buyer Legislation Addressing Out-of-Statute Debt

The Texas Legislature has passed House Bill 996 which limits when a debt buyer can initiate legal action or arbitration to collect consumer debt and requires specific notices with respect to out-of-statute debt.  Upon approval by Texas Gov. Greg Abbott, the new provisions will become effective Sept. 1, 2019.

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Consumer Financial Protection Bureau Settles with Freedom Mortgage Corporation

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today announced a settlement with Freedom Mortgage Corporation (Freedom), one of the ten largest Home Mortgage Disclosure Act (HMDA) reporters nationwide.  Freedom is a mortgage lender with its principal place of business in Mount Laurel, N.J. For each year from 2013 through 2016, it originated more than 50,000 home-purchase loans, including refinancings of home-purchase loans. Freedom is required to collect, record, and report data on HMDA-covered transactions to comply with HMDA and Regulation C.

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Atlanta, GA and London, UK – June 5, 2019 – Telrock is proud to announce the release of SmartConnect, their next generation digital channel messaging software platform. SmartConnect represents a robust set of digital channel messaging capabilities that are quick to deploy, easy to use, very economical, and can be leveraged throughout the customer lifecycle. SmartConnect joins Telrock’s growing list of SaaS-based modern software solutions for creditors and collection professionals.

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Third-party breach compromises 7.7 million LabCorp patients’ data

Up to 7.7 million LabCorp patients may have had personal data exposed as a result of a massive breach at a third-party billing collection agency.  LabCorp disclosed the breach in a filing with the U.S. Securities and Exchange Commission on Tuesday, one day after Quest Diagnostics announced nearly 12 million of its patients had data exposed in the same incident.

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Portfolios For Sale

$10,165,229.55 Medical
Capital Asset Management, Inc.

(317) 633-6633

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$26.7 MIL Credit Cards
Sea Side Management, LLC

(800) 917-7183

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$1.7 MIL Other
Sea Side Management, LLC

(800) 917-7183

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   Debt Seller 

Rapid Debt Recovery

(847) 922-6519


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