At a glanceFriday, September 27, 2019

Collection Industry News At A Glance - September 27, 2019
Friday September 27, 2019
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What Charles Scharf’s Visa years say about his plan for payments at Wells

Wells Fargo has named Charles Scharf to be its next CEO, placing an experienced bank executive at the top of the troubled company.   In the payments world, Scharf is best known as the CEO of Visa Inc. from 2012 to 2016, where his strategies for faster payments, fintech partnerships and other key issues may shed light on what Scharf has planned for Wells Fargo.

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NAFCU economist: Consumers key in fragile economy

NAFCU's Curt Long attributed the 2 percent economic growth during the second quarter to "a standout performance from U.S. consumers." However, he acknowledged that "there is an undeniable fragility in the economy, and any slippage from the consumer would almost certainly mean a recession is nigh."

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‘They Are Coming For You’: Cyber Security Experts Warn Of Potential Threat

LARIMER COUNTY, Colo. (CBS4)– “They are coming for you,” that’s the message behind the Cyber Security Summit in Loveland. The FBI Internet Crime Complaint Center estimates the loss from internet theft, fraud, and exploitation in 2018 topped $2.7 billion. That’s part of the reason why the Larimer County Sheriff’s Office and the Fort Collins Area Chamber of Commerce gathered online security experts together to take part in the Cyber Security Summit. The goal was to educate small business operators how to protect their valuable information.

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Fintech lenders have doubled their market share in 4 years

Fintechs are providing 49.4% of unsecured personal loans as of March, according to a study released Tuesday by credit reporting agency Experian, more than twice the 22.4% share they held in 2015. Borrowers with slightly lower — or near-prime — credit scores (601 to 660) make up a larger percentage of the fintech customer base when compared against traditional banks. Experian said it did not investigate why consumers are increasingly turning to fintechs for loans. But the trend comes as traditional banks are partnering with fintechs to launch digital lending platforms.

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Examining Legislation to Protect Consumers and Small Business Owners from Abusive Debt Collection Practices

Protect Consumers and Small Business Owners from Abusive Debt Collection Practices,” on Thursday,  September 26, 2019, at 10:00 a.m. in room 2128 of the Rayburn House Office Building. This single-panel hearing will have the following witnesses:
• The Honorable Rohit Chopra, Commissioner, Federal Trade Commission
• Rev. Dr. Cassandra Gould, Pastor, Quinn Chapel A.M.E. Church (Jefferson City, MO) and
Executive Director, Missouri Faith Voices
• Ms. Bhairavi Desai, Executive Director, New York Taxi Workers Alliance
• Ms. April Kuehnhoff, Staff Attorney, National Consumer Law Center
• Professor Dalié Jiménez, Professor of Law, University of California, Irvine School of Law
• Ms. Sarah Auchterlonie, Shareholder, Brownstein Hyatt Farber Schreck
• Mr. John H. Bedard, Jr., Owner, Bedard Law Group, P.C.

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House Financial Services Committee to hold Sept. 26 hearing on real-time payments

The House Financial Services Committee’s Task Force on Financial Technology will hold a hearing entitled “The Future of Real-Time Payments,” at 2:00 p.m. on Thursday, September 26, 2019.  There will be a live webcast of the hearing.

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Office of Financial Research Picks Up Hiring After Trump Cuts, Director Says

An agency designed to warn policymakers of risks to the U.S. economy is, once again, hiring. The Office of Financial Research — beset by budget cuts and staff reductions under the Trump administration — is now looking to expand to about 150 employees, Director Dino Falaschetti said Wednesday during a House Financial Services subcommittee hearing on financial stability. Staff is now “in the neighborhood of 100 employees,” down from a peak of nearly 220 in 2017, he said. 

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Call providers, FCC acknowledge concerns with call blocking

A number of phone service providers and the Federal Communications Commission (FCC) acknowledged potential issues with call blocking errors as a result of a new caller identification framework – known as SHAKEN/STIR – during a NAFCU-attended PACE Consumer Protection Coalition meeting Wednesday.

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Federal watchdog sues Maryland debt collection company

A federal watchdog agency sued a debt collection company and its owner Wednesday, accusing them of collecting debts without a "reasonable basis" to assert that consumers owed the money. The Consumer Financial Protection Bureau filed its federal lawsuit against Beltsville, Maryland-based Fair Collections & Outsourcing Inc. and other related companies owned by Michael Sobota, of Ormond Beach, Florida.

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Quarterly Consumer Credit Trends: Consumer Bankruptcy, BAPCPA, and the Great Recession

This is part of a series of quarterly reports of consumer credit trends produced by the Consumer Financial Protection Bureau using a longitudinal, nationally-representative sample of approximately five million de-identified credit records maintained by one of the three nationwide credit reporting companies. This eighth report explores how the volume and types of bankruptcy filings have changed throughout the period 2001-2018, which includes the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and the Great Recession. The report considers changes in the attributes of bankruptcy filers by analyzing credit scores and the amount of debt consumers hold prior to bankruptcy. 

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Fintech Lenders Could Hold the Keys to Recession Recovery

After plenty of adaptation for survival over the last few years, it’s been largely smooth sailing for fintech companies in 2019. Global expansion is steadily increasing. Billions of dollars in venture capital funds are flowing into fintech startups. And bank-fintech partnerships continue to flourish as fintech providers and traditional financial services firms seek increased symbiotic collaboration. General economic winds, however, are starting to blow in a different direction, as the stock market has taken some hits, the real estate market has tightened and despite the fed lowering interest rates, economic experts forewarn of a potential recession.

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CFPB Announces Additions to Executive Team

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (Bureau) today announced the following additions to its executive team:   Desmond Brown will serve as the Deputy Associate Director for the Consumer Education and Engagement Division. Mr. Brown has more than two decades of experience working with national and local organizations to increase financial well-being and economic opportunities for consumers. He first joined the Bureau as a program specialist for the Office of Financial Empowerment in 2012. He earned his Masters of Policy Management from Georgetown University, and his B.S. in Political Science from Southern Connecticut State University. 

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Berger: Regulators, Congress must coordinate on fintech

NAFCU President and CEO Dan Berger urged key members of the Federal Financial Institutions Examination Council (FFIEC) to consider enacting regulation to achieve a level playing field between fintech companies and traditional financial institutions as he shared the association's new fintech whitepaper.

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Noticeable August auto default rise happens again

NEW YORK - The noticeable upturn in defaults finance companies might be used to seeing from July into August unfolded again this year, according to the S&P/Experian Consumer Credit Default Indices. Data through August from S&P Dow Jones Indices and Experian showed the auto loan default rate climbed 9 basis points to 0.98%, mimicking a track that analysts have seen several times during this segment of the year. After remaining steady last year, S&P and Experian reported the July to August upward movement in 2017 was 10 basis points after coming in at 8 basis points in 2016. The rise during this stretch in 2015 was just 4 basis points. But in 2014, it was also was 8 basis points.

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FTC Testifies before House Appropriations Subcommittee On the Agency’s Work to Protect Consumers and Promote Competition

In testimony before the House Appropriations Subcommittee on Financial Services and General Government, the Federal Trade Commission described its work to protect consumers and promote competition through vigorous enforcement, education, advocacy, and policy work, and by anticipating and responding to changes in the marketplace.


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Blend bringing “one-tap” mortgage pre-approvals to U.S. Bank. Is Wells Fargo next?

When Quicken Loans launched Rocket Mortgage nearly four years ago, the lender kicked off a revolution that has seen nearly all large lenders take their mortgage process digital. Rocket Mortgage claims it’s as simple as “Push Button. Get Mortgage,” and enables borrowers to be approved for a mortgage in mere minutes. Consider the ante upped. Digital mortgage tech provider Blend, which powers the digital mortgage experiences of U.S. Bank, Wells Fargo, and a number of other sizable lenders, announced this week that it is now offering a “one-tap” mortgage pre-approval.

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5 changes lenders want from CFPB’s rewrite of QM rule

WASHINGTON — The Consumer Financial Protection Bureau should not hold back in revamping its mortgage underwriting rule, according to public comment letters from the industry. The effects of that rule, which requires lenders to verify borrowers' ability to repay and provides legal protection for "qualified mortgages" with low debt-to-income ratios, so far has been limited. That is because Fannie Mae- and Freddie Mac-backed loans are automatically QM regardless of their DTI thanks to a temporary exemption known as the "patch."

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U.S. consumers’ access to credit may be worse than previously thought: Fed study

(Reuters) - As many as 60 million Americans tend to have a hard time qualifying for credit cards and other loans, making it more difficult for them to recover from financial setbacks, according to a report released on Tuesday by the New York Federal Reserve. The findings show that the number of Americans who cannot easily access loans may be twice as many as previously estimated, when people who cannot easily qualify for loans because of blemishes in their credit histories are taken into account.

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Only 31% of Employees Get Annual Training on Cyber Security

The Chubb’s Third Annual Cyber Report reveals employee education is key for small businesses to prevent cyberattacks. Even with headline after headline about the latest data breach, people are not encouraged to defend against their cyber exposure. The goal of the report is to determine the level of understanding individuals have about their cyber risks. While at the same time looking at the steps they are taking to protect themselves.

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Consumer survey finds bipartisan support for effective debt collection regulation

A new survey asked likely voters across the country what they thought of a proposed debt collection rule. The response was strong and had broad opposition. Proposed earlier this year by Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger, the rule would authorize debt collectors to expand how often consumers could be contacted as well as the ways such contacts could be made: email, text messages, and more. Conducted by Lake Research Partners and Chesapeake Beach Consulting, the poll was jointly commissioned by the Americans for Financial Reform (AFR) and the Center for Responsible Lending (CRL). The results, released on September 11, found stark opposition by consumers to regulatory reforms announced by the CFPB. Consumers are strongly united in wanting more and better protection in this area of financial regulation.

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Experian study finds fintechs more than doubled personal loan market-share in four years

COSTA MESA, Calif., Sept. 24, 2019 /PRNewswire/ -- Experian today released its first Fintech Marketplace Trends Report, highlighting the latest findings in fintech unsecured personal loans. According to the report, competition in personal lending between traditional financial institutions and fintechs is increasing with fintechs more than doubling their market share in four years to 49.4 percent, up from 22.4 percent in 2015. Experian data also shows that the unsecured personal loan category has grown significantly in the past four years as new loan originations were 1.3 million in March 2019 compared to 656,000 in March 2015." data-reactid="12" 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;">COSTA MESA, Calif., Sept. 24, 2019 /PRNewswire/ -- Experian today released its first Fintech Marketplace Trends Report, highlighting the latest findings in fintech unsecured personal loans. According to the report, competition in personal lending between traditional financial institutions and fintechs is increasing with fintechs more than doubling their market share in four years to 49.4 percent, up from 22.4 percent in 2015. Experian data also shows that the unsecured personal loan category has grown significantly in the past four years as new loan originations were 1.3 million in March 2019 compared to 656,000 in March 2015.

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Industry players encourage CFPB to remove DTI requirements from QM rule

A major industry player is urging the CFPB to remove DTI requirements from its qualified mortgage rule once the so-called “QM patch” comes to an end in 2021. According to its data, DTI “is a weaker predictor of default than other risk measures” and “its centrality to the current QM rule distorts the market by misrepresenting true loan risk.”

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Belizean Bank to Pay $23 Million and Cease Operations to Settle FTC Charges It Provided Substantial Assistance to the Sanctuary Belize Real Estate Scam

Under a proposed consent order, Belize’s Atlantic International Bank Limited (AIBL) will pay $23 million, representing approximately all of its U.S.-based assets, to settle Federal Trade Commission charges that it assisted various related entities (the Sanctuary Belize Enterprise, or SBE) in deceiving U.S. consumers as part of a scheme to sell property in Sanctuary Belize.

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WebRecon Stats for Aug 2019: They don’t call it “Fall” for nuthin’…

After everything (FDCPA, TCPA, FCRA) was up by double-digit percentages last month, everything is down by double-digit percentages this month. Well, almost. FDCPA had to be difficult and mess up my sweeping allegory by keeping its toe just under the line at 9.9%. But with that one exception, everything is double digits.

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Measuring the Effects of Loan Forgiveness

The impact of student loan forgiveness goes far beyond a reduced debt balance for borrowers, according to a new study.   Researchers from Harvard Business School, Indiana University and Georgia State University examined the effects of debt cancellation for borrowers whose private student loans were tossed out in court after their creditor, National Collegiate Student Loan Trusts, couldn’t prove the chain of title. In recent years, judges have tossed out numerous lawsuits against student borrowers because National Collegiate couldn't establish in documents that the company actually owned the debt.

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Kraninger pushes for axing policy intervention

Consumer Financial Protection Bureau Director Kathy Kraninger emphasized the need for cost benefit analysis when it comes to solid policymaking Thursday ahead of a series of panel discussions focused on behavioral economics. In her opening remarks, she also emphasized the need to preserve consumer choice when developing policies and rulemakings.

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VA concedes its debt collection systems leave veterans confused, frustrated

Veterans Affairs officials acknowledged to lawmakers that the department’s debt collection practices remain “too clunky and too confusing” to ensure families aren’t left in financial jeopardy. And they promised additional reforms within the next year. “We are too often fragmented, uncoordinated and highly variable in our processes,” said Jon Rychalski, chief financial officer for the Department of Veterans Affairs, told members of the House Veterans’ Affairs Committee on Thursday. “Frankly, we have a way to go before we can declare success.”

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Fort Worth Considers Rules Governing Payday Lending

New rules from the U.S. Consumer Financial Protection Bureau regulating payday lenders were supposed to take effect on Aug. 19. The rules – laid out in 2017 – would have regulated lenders’ ability to withdraw funds directly from a person’s bank account. Those rules are on hold for now as the agency and a payday lender trade group challenge it in court. In Texas, nearly 70 cities have their own rules regulating payday and other high-interest loans. But there’s one notable holdout: Fort Worth is Texas’ largest city with no laws on the books that regulate payday and auto title lenders.

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Attorney General Becerra to CFPB: Proposed Debt Collection Practices Rule Falls Far Shor

SACRAMENTO – California Attorney General Xavier Becerra today, as part of a coalition of 28 attorneys general, denounced the Consumer Financial Protection Bureau’s (CFPB) proposed Debt Collection Practices Rule, which falls far short of the regulation needed to protect consumers from abusive and unscrupulous debt collectors in the $11.5 billion industry. In the letter, the attorneys general recognize the importance of lawful debt collections and certain benefits of the proposed rule, but urge CFPB to fulfill its obligation to protect consumers in the financial marketplace rather than allow debt collectors to run rampant, putting customers at risk. 

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National Creditors Bar Association 2019 Fall Conference

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Washington, Washington, DC

October 16 - 19 , 2019


2019 CFPB Research Conference


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RMAi Annual Conference

February 04 - 06 , 2020

Questions about registration or sponsorship? Contact Sylvia Done at or 916-482-2462

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May 06 - 08 , 2020


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September 15 - 17 , 2020


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