At a glanceFriday, June 14, 2019

Collection Industry News At A Glance - June 14, 2019
Friday June 14, 2019
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Resource Management Services, Inc. supports the concepts of benchmarking and best practices through our continued education and research projects.  We’ve kept these short, but meaningful.  All responses are confidential, and can be anonymous.  All participants can receive a copy of the results by providing their contact information to us.  No individual company information or contact information will be provided in the analysis and results.

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Warren bill would wipe out nearly all student debt in US

Sen. Elizabeth Warren (D-Mass.) on Thursday announced a bill that would forgive billions of dollars in outstanding student loans and wipe out almost all student debt held in the U.S. Warren’s bill would forgive up to $50,000 in student loan debt for anyone with a total household income below $100,000. Debtors with between $100,000 and $250,000 in total household income would have less of their debt eliminated the closer they are to the upper limit on eligibility for forgiveness. "The student debt crisis is real and it’s crushing millions of people -- especially people of color,” Warren said in a statement. “It’s time to decide: Are we going to be a country that only helps the rich and powerful get richer and more powerful, or are we going to be a country that invests in its future?”

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FDIC’s Consumer Compliance Supervisory Highlights

The Federal Deposit Insurance Corporation (FDIC) today issued the new Consumer Compliance Supervisory Highlights publication. The purpose of this publication is to enhance transparency regarding the FDIC's consumer compliance supervisory activities and includes a high-level overview of consumer compliance issues identified during 2018 through the FDIC's supervision of state non-member banks and thrifts.   This issue of Consumer Compliance Supervisory Highlights also includes a "Resources & Information for Financial Institutions" on page 6 and an appendix of "Most Frequently Cited Violations and Enforcement Actions" to support supervised institutions' efforts to manage consumer compliance responsibilities effectively.


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CFPB to Hold June 25 Symposium on Abusive Acts or Practices

Having announced in April 2018 that it would be holding a symposia series, the CFPB has now set a date for the first symposium of the series.  The first symposium, to be held on June 25, 2019, will focus on the Dodd-Frank Act’s prohibition of abusive acts or practices, specifically the meaning of abusiveness.  It will be webcast on the Bureau’s website. The Dodd-Frank Act does not authorize state attorneys general to bring claims against national banks or federal savings associations to directly enforce Dodd-Frank’s UDAAP provisions.  However, under Section 1042(a)(2) of Dodd-Frank, a state attorney general can bring claims against national banks or federal savings associations “to enforce a regulation prescribed by the Bureau under a provision of [Title 10].”  Thus, this enforcement authority would presumably be triggered if the Bureau were to adopt a rule regarding what is an “abusive act or practice” under Section 1031 of Dodd-Frank.

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SunTrust and BB&T merger: Here’s the name of the new bank

The biggest bank in Atlanta is getting a new partner — and a new name.
combined SunTrust and BB&T will be known as Truist Bank, officials announced Wednesday. Expect to see that name (pronounced TRUE-ist) splashed across the region in the next year or so, from the Braves stadium in Cobb County to one of the city’s tallest skyscrapers.

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FTC Releases Agenda for PrivacyCon 2019

The Federal Trade Commission today released the final agenda for the fourth annual PrivacyCon, which will take place on June 27, 2019 and focus on the latest research and trends related to consumer privacy and data security.  FTC Chairman Joe Simons will provide opening remarks for PrivacyCon 2019, which will be followed by four sessions of presentations and discussions on research submitted for the event.

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CRA feedback published; NAFCU maintains opposition to CU inclusion

The Federal Reserve Thursday published a summary of feedback from various roundtable discussions on ways to modernize the Community Reinvestment Act (CRA). NAFCU has strongly opposed extending CRA regulations to credit unions and will continue to advocate against additional constraints on credit unions.   The CRA was enacted in 1977 to encourage banks to meet the financial needs of the communities they serve. Since consumer safeguards and fair lending are already a part of credit unions' statutory and regulatory fabric, the CRA does not apply to the industry.

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Warren asks financial regulators for information about discrimination in algorithms

Sen. Elizabeth Warren (D-Mass.) in a letter on Wednesday called on the heads of financial regulatory bodies to provide information on reports that automated lending algorithms may produce discriminatory outcomes. In the letter, Warren referenced a recently published analysis that found financial technology (fintech) companies’ algorithmic models may lead to discriminatory outcomes or overcharges to borrowers. Warren submitted the letter to the heads of the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau. "While some FinTech products have the potential to expand access to financial services for underserved populations, we believe these new business models and products also present new challenges for regulators," Warren wrote.

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Third Circuit Interprets “Debt Collector” to Include Debt Buyer

Earlier this year, on February 22, 2019, a three-judge panel upheld a lower court ruling that debt-buying businesses could be liable for violations under the Fair Debt Collections Practices Act (the “FDCPA”).   The FDCPA’s purpose is to protect consumers from deceptive or unfair debt collection practices and applies to “debt collectors,” which is defined as those engaged “in any business the principal purpose of which is the collection of any debts” and those “who regularly collect” debts “owed or due another.” 15 U.S.C. § 1692(a).  The underlying case involves Crown Asset Management, LLC (“Crown Asset”), which is a purchaser of charged-off consumer debt.  After purchasing an account, if the consumer has not filed for bankruptcy, Crown Asset will refer the matter to a third-party service for collection or hires a debt collection law firm to file a lawsuit on its behalf.  Barbato v. Greystone Alliance, LLC, 916 F.3d 260 (3d Cir. 2019).  In 2014, Mary Barbato sued Crown Asset for violations under the FDCPA, due to Crown Asset’s alleged failure to identify itself as a collection agency. 

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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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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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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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Portfolios For Sale

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Capital Asset Management, Inc.

(317) 633-6633

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Credit Service of Logan, Inc.

(435) 752-2660

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Rapid Debt Recovery

(847) 461-3099


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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