At a glanceWednesday, September 18, 2019

Collection Industry News At A Glance - September 18, 2019
Wednesday September 18, 2019
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Consumer Financial Protection Bureau to Enhance Consumer Complaint Database

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) announced that it will continue the publication of consumer complaints, data fields and narrative descriptions through the Bureau’s Consumer Complaint Database while making several enhancements to the information available to users of the database. The enhancements include: modified disclaimers to provide better context to the published data; integrating financial information and resources into the complaint process to help address questions and better inform consumers before they submit a complaint; and information to assist consumers who wish to contact the financial company to get answers to their specific questions. Additionally, the Bureau will work to provide enhanced features for the database that include dynamic visualization tools on recent complaint data.

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The head of the CFPB now believes that the financial regulator is unconstitutionally structured

The head of the Consumer Financial Protection Bureau now believes that the financial regulator she leads is unconstitutionally structured.    CFPB Director Kathleen Kraninger notified senior lawmakers on Tuesday that the bureau had determined that the law that established the agency in the wake of the financial crisis gave her too much independence. That brings her position in line with the one adopted by the Department of Justice in March 2017.

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PayThink Fintechs give small business more choice for credit than just banks

It’s no secret working capital is the lifeblood of all small businesses. It’s the fuel that keeps them running, helps them grow and take on new opportunities.  And yet, so many small businesses struggle with cash flow. In fact, according to a recent study from Intuit QuickBooks, 61% of small businesses have had cash flow issues in the past year.   A very common step business owners take when experiencing a cash flow crunch is seeking external resources to help bring some quick capital in the door. Until very recently, many business owners marched straight to their bank to apply for a traditional business loan. While bank loans on the national or local level are a tried and true way of securing additional funds, they are no longer the only way of obtaining capital.

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California Consumer Privacy Act (CCPA) – Amendment Update

The dust has finally settled in the California State Legislature and the big winner for amendments to the CCPA is AB-25, which started out as carving out employees from the definition of consumer for the purpose of CCPA. The bill ended up narrower with respect to employees but broader in other respects by absorbing a few other proposed bills as well. The status of AB-25 is that it passed unanimously in both chambers and will become law when signed by the governor, who has a deadline of October 13 to sign.

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NAFCU details concerns with CFPB’s debt collection proposal

Highlighting a number of "indirect effects" credit unions – which are not debt collectors as defined in the Fair Debt Collection Practices Act (FDCPA) – will face as a result of the CFPB's proposed rule related to third-party debt collection, NAFCU's Kaley Schafer outlined regulatory improvements the bureau can make before finalizing the rule.

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Chicago Brokerage to Pay $1.5 Million Fine for Lack of Cybersecurity

A Chicago-based futures brokerage will pay $1.5 million for letting cyber criminals breach the firm’s email systems and withdraw $1 million from a customer’s account. The order from The U.S. Commodities Futures Trading Commission also finds that Phillip Capital Inc. failed to disclose the cyber breach to its customers in a timely manner.  The order alsi finds that PCI failed to supervise its employees with respect to cybersecurity policy and procedures, a written information systems security program and customer disbursements.

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CFPB Symposium: Behavioral Economics

Featuring remarks from CFPB Director Kathleen Kraninger and Deputy Director Brian Johnson as well as testimony from academic and policy experts on the topics of: (1) the methodological foundations of behavioral economics and (2) behavioral law and economics and consumer financial protection.
The Consumer Financial Protection Bureau will host the second of its symposia series on September 19, 2019 at 9:00 AM at the Bureau's headquarters, 1700 G St. NW, Washington, D.C. 

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Trump administration asks Supreme Court to take up challenge to consumer bureau

The Trump administration and Consumer Financial Protection Bureau (CFPB) on Tuesday asked the Supreme Court to take up a lawsuit challenging the agency’s constitutionality. Top Justice Department and CFPB attorneys argued in a brief filed Tuesday that the structure of the powerful financial watchdog infringes on the president’s executive authority. The lawyers urged the Supreme Court to take up a case that could have potentially fatal implications for the CFPB, halting or weakening its efforts to police the financial sector.

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CFPB should remove DTI requirement, income verification rules for QM

The Consumer Financial Protection Bureau (CFPB) should take special note of the challenges faced by credit unions and other smaller mortgage lenders in the absence of certain expansions of the Qualified Mortgage safe harbor, CUNA wrote to the CFPB Monday.   The letter comes in response to a CFPB advance notice of proposed rulemaking on whether to propose revisions to the definition of a QM in light of the planned January 2021 expiration of a category of QM eligible for purchase by Fannie Mae and Freddie Mac, the Temporary GSE QM, or the “GSE patch.”

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New report explores the relationship between Financial Well-Being and the contents of and engagement with credit reports

Today the Consumer Financial Protection Bureau (Bureau) released an Innovation Insight report which describes a first of its kind study exploring the relationship between subjective financial well-being and objective credit report characteristics and consumers’ engagement with financial information through educational tools. “Credit Characteristics, Credit Engagement Tools, and Financial Well-Being” presents the findings of a joint research study between the Bureau and Credit Karma, a personal finance technology company providing free credit scores and reports and credit-related educational tools. This report is the first to study the relationship between financial well-being and engagement with financial information based on a survey of consumers matched with actual data on engagement.

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Average FICO score stands at record high

The average FICO score stands at 706, a record high, said Ethan Dornhelm, vice president of scores and predictive analytics at FICO. That compares with 686 at the 2009 end of the Great Recession and it eclipses the 690 at the 2006 height of the housing bubble. The key drivers are U.S. economic expansion that has propelled job growth and an increase in consumer education about protecting and improving scores, Dornhelm said in a blog post. In addition, the passage of time is helping to remove the credit scars from events that happened during the financial crisis, he said.

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Banks Scrapping Regulators For Friendlier OCC Oversight

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California passes new rules that cap payday loan interest at 36%

More than 23 million people relied on at least one payday loan last year. On Friday, Sep. 13, California passed legislation that would make these loans less expensive for residents.   The California State Legislature passed the Fair Access to Credit Act, which blocks lenders from charging more than 36% on loans of $2,500 to $10,000. Previously, there was no interest rate cap on loans over $2,500, and the state’s Department of Business Oversight found over half of these loans carried annual percentage rates of 100% or more.

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Start-ups to grab $280 billion in banking payments revenues by 2025, study says

LONDON (Reuters) - Banks are set to miss out on as much as $280 billion in revenue from their payments operations by 2025, as new start-ups muscle in and more of the business of sending money to individuals and companies becomes instant and free, according to a new report.

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Wall Street banks are upping bets on their potential fintech competitors

The biggest banks on Wall Street are increasingly betting on their potential competition.   So far this year, major U.S. banks have participated in two dozen financial technology, or fintech, equity deals, according to a recent report by CB Insights. This is tracking to be on par with last year — which saw a 180% increase in bank investments from a year earlier.

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Supervisory Highlights, Issue No. 19 (Summer 2019)

In this issue of Supervisory Highlights, we report examination findings in the areas of automobile loan origination, credit card account management, debt collection, furnishing, and mortgage origination that were generally completed between December 2018 and March 2019 (unless otherwise stated). The report does not impose any new or different legal requirements, and all violations described in the report are based only on those specific facts and circumstances noted during those examinations.

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CFPB Partners with State Regulators for Financial Innovation Network

The Consumer Financial Protection Bureau (CFPB) this week announced a new partnership with a group of state-level regulating authorities to launch the American Consumer Financial Innovation Network (ACFIN), a network that is designed to “enhance coordination among federal and state regulators to facilitate financial innovation,” according to an announcement released by the CFPB.

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Integrating Technology in Servicing and Lending

Earlier this year, Flagstar Bank and Detroit FinTech Bay announced the first startups to participate in the Flagstar Mortgage Tech Accelerator Program. DS News spoke to FinTech professionals including Flagstar Head of Digital Lending Rocky Stubbs about how the program is impacting the shape of FinTechs in the mortgage and real estate industry, and where technology needs to grow and adapt.

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Why Companies Are Forming Cybersecurity Alliances

In the physical world, governments are responsible for keeping citizens and corporations safe from enemies. The digital world, so far, has been a little different. When it comes to cybersecurity and cyber attacks, most governments have spent much more time increasing their offensive capabilities than protecting companies and individuals.

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Ouch: California Debt Collector Hit With $267 Million TCPA Verdict

TCPA cases against debt collectors and first-party creditors are notoriously difficult to certify. They typically involve individual issues of consent and revocation that make certification impossible. But when a debt collection TCPA case does get certified, look out! They can get painful, as a California-based debt collector just found out in McMillion v. Rash Curtis & Associates, 4:16-cv-03396 (N.D. Cal.). The jury returned a whopping $267 million for 534,000 calls. Ouch.

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Phone Companies Ink Deal With All 50 States And D.C. To Combat Robocalls

AT&T, Sprint and Verizon and nine other telecommunications companies teamed up with attorneys general of all 50 states plus the District of Columbia to announce a new pact to eradicate a common scourge in America: illegal robocalls. The agreement, which amounts to a set of anti-robocall principles, is aimed at combating and preventing the phone-ringing annoyance. Included in the deal is call-blocking technology that will be integrated into a dozen phone networks' existing infrastructure, at no additional charge to customers.

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FTC sues marketers of student loan “debt relief” – and financer who helped it happen

Every spring at colleges across the country, many graduates receive a diploma in their hand – and an albatross around their neck. The burden of student loan debt weighs heavily on American families. And given the pressures on cash-strapped employees, businesses say they’re paying a price in productivity. The FTC has brought numerous cases against companies that pitch deceptive student loan “debt relief.” Actions announced by the FTC and the Minnesota Attorney General continue that effort, but come with a twist that should be relevant to those in the financial sector.

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Fifth Third Bank Receives Approval on Application to Convert to National Bank Charter

CINCINNATI--()--Fifth Third Bancorp (Nasdaq: FITB) today announced that Fifth Third Bank has received approval from the Office of the Comptroller of the Currency (“OCC”) to convert from an Ohio state-chartered bank to a national bank. The conversion is intended to better align regulatory supervision with its expanding national business model by streamlining its operations under one uniform set of laws and regulations.

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Waters, HFSC members stand by CUs, share updates on key issues at Caucus

On the final day of NAFCU's Congressional Caucus, House Financial Services Committee Chairwoman Maxine Waters, D-Calif., and a host of key members from the committee pledged to stand by credit unions in the fight to keep the industry's tax exemption intact and many called to halt the current expected credit loss (CECL) standard.

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EOS USA, a leading provider of customer care and account receivable solutions, announces the appointment of Candice O’Brien as Chief Operating Officer (COO). A 25 year veteran of EOS USA, Ms. O’Brien most recently was Senior Vice President and head of US Asset Management (an EOS company). Ms. O’Brien holds an MBA from the University of Phoenix and is certified through the Risk Management Association (RMA). In addition, she currently sits on the board of NECA, a local division of the ACA. She is an industry expert in analytics, quality assurance and strategy development. “Candice assumes the COO mantle with a wealth of operational and financial experience”, said Tod Dillon, EOS USA CEO.

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Portfolios For Sale

$1,441,521 Medical
Capital Asset Management, Inc.

(317) 633-6633

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$2,848,199 Auto Deficiencies
Capital Asset Management, Inc.

(317) 633-6633

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$7,059,484 Medical
Capital Asset Management, Inc.

(317) 633-6633

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