United States: CFPB Highlights Analysis On The Use Of Non-Traditional Data In Credit Process
The CFPBhighlightedthe results of an analysis comparing the uses of traditional and non-traditional sources of information by consumers in the credit process. In 2017, the CFPB grantedno-action relieffrom certainRegulation Brequirements to Upstart Network, Inc. ("Upstart Network") to use alternative data (such as education and employment history) and machine learning for the purpose of an underwriting and pricing model. The no-action letter was contingent on Upstart Network providing the CFPB with information about compared results between (i) its credit underwriting and pricing model (a tested model) and (ii) a more standard model. Upstart Network was tasked with answering:
Robocall blocking apps caught sending your private data without permission
Robocall-blocking apps promise to rid your life of spoofed and spam phone calls. But are they as trustworthy as they claim to be? One security researcher said many of these apps can violate your privacy as soon as they are opened. Dan Hastings, a senior security consultant cybersecurity firm NCC Group, analyzed some of the most popular robocall-blocking apps — including TrapCall, Truecaller, and Hiya — and found egregious privacy violations.
‘An important step forward’: New Chase research reveals true weight of student debt
report from JPMorgan Chase Institute." data-reactid="15" style="margin: 0px 0px 1em; color: #26282a; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: #ffffff; text-decoration-style: initial; text-decoration-color: initial;">Student loan borrowers — particularly those who are younger and from lower-income families — are spending up to 17% of their annual income on repayments, sometimes putting off basic needs to meet them, according to a comprehensive new report from JPMorgan Chase Institute. The research — which used data from 4.9 million Chase checking accounts from 2012 and 2018 that made at least one student loan payment — presented a more nuanced picture about just how much debt borrowers have as well as how exactly borrowers are repaying their loans.
Attorney General James Holds Lender Responsible For Ripping Off Student Borrowers
NEW YORK – Attorney General Letitia James today held financing company Equitable Acceptance Corporation responsible for violating consumer protection laws and the unlawful financing of student loan debt relief services.“Higher education is supposed to be a gateway to prosperity, not a trapdoor to financial ruin,” saidAttorney General Letitia James.“Equitable scammed students by offering worthless services that were available at no cost. No longer will Equitable be able to prey on New Yorkers, and they will, instead, be forced to wipe the slate clean and forgive the loans of those it victimized.
Researchers discover troubling new security flaw in all modern Intel processors
Researchers from BitDefender have uncovered a concerning security vulnerability present in all modern Intel processors. If executed, the flaw could permit an adversary to access the computer’s kernel memory, which could potentially result in them gaining access to sensitive information, like passwords, tokens, and private conversations. The flaw affects all machines using Intel processors that support the SWAPGS system call, which allows the processor to swap between the kernel mode and user mode memory rings. This feature is part of thespeculative executionfeatures present in most modern processors, which allow the CPU to predictively execute tasks in anticipation of them being required.
When it comes to student debt, it is time to talk solutions
Student loan debthas more than doubled in the last decadeand 92 percent of that debt is held by the federal government. Loan forgiveness or free college have been the topic du jour from many presidential candidates. And, while they might make for good campaign rhetoric, these proposals are unlikely to become law. Luckily, Sens.Tim Scott(R-S.C.) andJoe Manchin(D-W.Va.) introduced legislation, theStudent Loan Disclosure Modernization Act, to help student loan borrowers – and has the added benefit of actually being able to become law.
CFPB: Alternative Data Could Increase Availability, Lower Cost of Credit
The use of alternative data in credit decisions could make a significant difference in the cost and availability of credit for consumers, according to anew blog postpublished yesterday on the CFPB’s website. The blog post highlights data submitted to the bureau regarding outcomes generated by using an underwriting and pricing model incorporating alternative data—such as information about borrowers’ education and employment history—created by the Upstart Network. Upstart has been operating under a no-action letter from the CFPB to develop and test the model since 2017.
Housing sentiment hits record high, as bidding wars vanish
Falling mortgage rates and strong employment drove consumer confidence in housing to a record high in July, according to a monthly index from Fannie Mae. At the same time, bidding wars eased thanks to lower demand in some of the hottest markets. Of the index’s five components, “confidence about not losing job” and “mortgage rates will go down” rose the most. The gains come despite a very low supply of homes for sale and affordability challenges. Mortgage rates dropped dramatically this spring, down from a high of around 4.5% at the start of this year to 3.85% at the end of July, according to Mortgage News Daily.
SNAAC to wind down operations, liquidate portfolio
A little more than three years after announcing an aggressive growth plan based on a strategy to add a significant number of dealership customers throughout the United States, Security National Automotive Acceptance Company (SNAAC) is departing the auto-finance business.
FCC BANS MALICIOUS CALLER ID SPOOFING OF TEXT MESSAGES & FOREIGN ROBOCALLS
WASHINGTON, August 1, 2019—The Federal Communications Commission today adopted new rules banning malicious caller ID spoofing of text messages and foreign calls. These new rules will close a loophole in the law that prevented the agency from pursuing scammers sending spoofed text messages and international fraudsters making spoofed calls to Americans.
MegaCortex ransomware slams enterprise firms with $5.8 million blackmail demands
A new variant of MegaCortex ransomware is making its way across Europe and the United States, leaving blackmail demands worth millions in its wake.
Accenture iDefense researchers described campaigns making use of MegaCortex v.2 in a blog poston Monday. According to Leo Fernandes, Senior Manager of the Malware Analysis and Countermeasures (MAC) team, the operators behind theransomwareare focusing on corporate targets -- and are in it to hit the criminal jackpot. During recent, targeted attacks, the operators of the C++ malware have focused on infiltrating servers containing corporate resources in order to encrypt them and any connected network hosts.
JPMorgan’s Jamie Dimon talks college affordability, the economy and why the bank is hiring coders
JPMorgan chief executive Jamie Dimon paid a visit to Wilmington, Del., on Monday to visit the bank’s extensive corporate offices, glad-hand among the state’s 11,000-strong workforce in a town hall meeting, and take in a coding boot camp it funds called Zip Code Wilmington. That last group trains computer coders in a 12-week, $12,000-tuition program to educate potential workers for JPMorgan, which has roughly 250,000 employees globally. Students either completed college or dropped out and pivoted to software as a way to earn an average of $74,000 upon graduation, according to Zip Code officials. Dimon sat down with The Inquirer to elaborate on why he’s going on his 10th annual bus tour of the bank’s East Coast operations — including Philadelphia, Boston, and Washington — and his views on the economy.
Bank consolidation has heated up in recent weeks. Eighteen deals, with a total value of more than $2.4 billion, have been announced since mid-July. Half of the year’s 10 biggest agreements ranked by deal value were announced in June and July. To be sure, the overall pace of consolidation still lags that of prior years. The 143 deal announcements to date is 15% lower than during the same period last year. The aggregate deal value of $14.4 billion, excluding the BB&T-SunTrust megamerger, is off 31% from 2018. Here are some of the most noteworthy deals announced in June and July.
Compliance Blog explores DOJ, Nissan MAC settlement
Following the Department of Justice's (DOJ) announcement of a $3 million settlement with Nissan Motor Acceptance Corporation for alleged violations of the Servicemembers Civil Relief Act (SCRA), NAFCU's Brandy Bruyere reviews the settlement and answers questions on the SCRA specifically related to vehicle repossession in a new post on the Compliance Blog.
PWCI – NETWORK OF PROFESSIONAL WOMEN IN THE COLLECTIONS AND CALL CENTER INDUSTRIES MEETS AT DCS2019
PWCI – Network of Professional Women in the Collections and Call Center Industries meets at DCS2019. KEEP YOUR SKILLS SHARP! Join Alex Siotos and other PWCI members and women in the industry in this roundtable discussion from 1:30 p.m. to 2:50 p.m. on Tuesday, September 10th at the Red Rock in Las Vegas.
An update on credit access and the Bureau’s first No-Action Letter
For some consumers, the use of unconventional sources of information, or “alternative data,” to evaluate creditworthiness may be a way to increase access to credit or decrease the cost of credit. Alternative data includes information not typically found in core credit files of nationwide consumer reporting agencies and may indicate a likelihood of meeting obligations on time that a traditional credit history may not reflect.
Fed to offer faster payments system, setting up clash with big banks
The Federal Reserve on Monday announced it will build its own infrastructure for near-instant payments, a move that will have sweeping implications for banks and consumers nationwide. Such a system would allow people to receive money in their bank accounts within seconds after it’s sent to them, lightning speed by today’s standards. Under the traditional system that handles card payments and direct deposits, transactions are settled en masse three times a day and only during business hours, a costly reality for the millions of Americans living paycheck to paycheck.
Created in July 2010, the Consumer Financial Protection Bureau (CFPB) has been a welcome advocate for consumers wronged by businesses and financial institutions. In its short lifetime, the agency has fielded 1.5 million consumer complaints, publishing just fewer than 1.2 million of them in a convenientsearchable form. The CFPB commands attention, as 97% of complaints sent to the CFPB get timely responses from the companies involved.
Why tech-savvy young adults can’t quit bank branches
In the age of the app, it would be easy to assume that adults in their 20s and 30s would never go to a bank branch. Millions of young adults have all kinds of options to visit and do business with their financial institution from a much closer distance at all hours: on their smartphones, via Venmo and Instagram app.
Apple invites first customers to apply for its credit card
After months of anticipation,Applehas invited some select customers to apply for its Apple Card. Apple CEO Tim Cookhad said during its third quarter earnings callthat the new credit card, released in partnership withGoldman Sachs, would be released in August. The card is part of Apple’s broader push to expand its services business from its 1.4 billion active Apple devices. Apple is counting on services to boost revenue as iPhone sales slow. Apple reported $11.46 billion in services revenue for the third quarter, with Cook telling CNBC’s Josh Lipton it was a “great services quarter.”
Weltman Grows Creditors’ Rights Practice with Opening of Louisville Office
LOUISVILLE, KY — August 5, 2019 — Weltman, Weinberg & Reis Co., LPA (Weltman), a full-service creditors’ rights law firm now in its 89th year of client service, is excited to announce the opening of its Louisville, Kentucky office. The office is located at 4360 Brownsboro Road, Unit 315 in the Summit II office space in Crescent Hill. This is the firm’s 9th office nationally, and the first in Kentucky.
Sentiment among consumer advocacy groups is split on theConsumer Financial Protection Bureau’s announcement of the30-day extensionon the comment period for its proposed debt collection rule. Last month a group of consumer advocacy groups and industry trade groups sent separatelettersto the CFPB requesting a 60- to 90-day extension on the comment period related to the Fair Debt Collection Practices Act. Today, the CFPB announced it would extend the comment period 30 days, to Sept. 18.
The Title Report has learned from multiple sources that the Consumer Financial Protection Bureau is on the verge of filing a lawsuit against an independent mortgage lender concerning violations of the Equal Credit Opportunity Act (ECOA). The action – which could come as soon as Monday morning, The Title Report has learned – concerns an investigation of an ECOA violation that appears to be based on marketing. Sources have told The Title Report that the target of the investigation is a small, three-person mortgage company located in Chicago, which marketed their services on a conservative AM radio station in the area. The Title Report reached out to legal counsel for the firm but has not gotten a response.
Student Debt Seen at $3 Trillion in 10 Years – Expert
Interest rates on student loans may not drop lower, but tuition can and should. That's according to Brendan Coughlin, head of consumer deposits and lending at Citizens Bank. "Tuition growth has been two times wage growth for the last two decades," Coughlin said. "That's really creating this funding gap where the average consumer can't possibly save at the same pace that tuition costs are going up and it's creating a big financial gap." Student debt is 15% of U.S. GDP, but "You got to really get to the root cause of this," said Coughlin. "So when wage growth isn't at the same pace of tuition growth, there's a funding gap." He mentioned that markets, of course, self correct, but tuitions have not come down, creating an affordability and debt problem.
Justice Department Reaches $3 Million Settlement with Nissan Motor Acceptance Corporation for Violating the Servicemembers Civil Relief Act
The Department of Justice announced today that Nissan Motor Acceptance Corporation (Nissan MAC) has agreed to pay $3 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA). The suit alleges that Nissan MAC repossessed 113 vehicles owned by SCRA-protected servicemembers without first obtaining the required court orders, and failed to refund up-front capitalized cost reduction (CCR) amounts to servicemembers who lawfully terminated their motor vehicle leases early after receiving military orders. This settlement is the Justice Department’s 10th settlement with an auto finance provider since 2015 and exemplifies continued efforts to enforce the SCRA’s motor vehicle repossession and lease termination provisions.
Attorney General James And DFS Superintendent Lacewell Take Action Against Fraudulent Mortgage Lender
NEW YORK – Attorney General Letitia James and New York Superintendent of Financial Services Linda A. Lacewell today filed suit in federal court against Vision Property Management, LLC; the company’s CEO, Alex Szkaradek; and a number of other companies affiliated with Vision for operating an illegal, deceptive, and unlicensed mortgage lending business in New York since at least 2011. By offering disguised, predatory subprime home loans and illegal finance-lease hybrid agreements, Vision and the other defendants took part in fraudulent activities that repeatedly targeted and took advantage of financially vulnerable New Yorkers.
How BofA’s Chief Turned Giant Problem Into Tech-Driven Powerhouse
When Bank of America’s Brian Moynihan talks about bringing fintech firms into “the tent,” he isn’t talking about inviting the folks of Silicon Valley, New York’s Silicon Alley, London, and elsewhere into BofA headquarters for a management retreat. He’s talking about equal regulation. Regulation makes a lot of people in banking roll their eyes and groan, but Moynihan saw from firsthand experience during the financial crisis the results of untethered financial innovation. It nearly brought down the entire financial system. The former lawyer is concerned that some of the same seeds are being sown again.
NAFCU supports enhanced data security protections under safeguards proposal
NAFCU's Andrew Morris shared the association's support of the Federal Trade Commission's (FTC) efforts to modernize its Safeguards Rule in a letter sent Friday. The proposed amendments would amend the FTC's implementation of the Gramm-Leach Bliley Act's (GLBA) safeguards provisions by aligning data security standards for nonbank financial companies more closely with those already established by prudential regulators.
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