At a glanceFriday, October 18, 2019

Collection Industry News At A Glance - October 18, 2019
Friday October 18, 2019
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Retail Sales Slump Raises Questions About Consumer Spending

One of the laws of physics, loosely phrased, is that an object in motion stays in motion, on its path, until outside forces act to change that path.   The outside forces may be coming to bear on the engine that’s led the economy on an upward path — the U.S. consumer.   As reported Wednesday (Oct. 16), data from the U.S. Commerce Department showed retail sales in the country were down 30 basis points last month. The news was less than stellar on two fronts, namely that 1) economists had expected gains — to the tune of positive 30 basis points — and 2) the data represented the first drop in seven months.

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Kraninger provides insights into innovation, rulemakings

CFPB Director Kathy Kraninger testified before the Senate Banking Committee Thursday and provided lawmakers with insights into the bureau's ongoing efforts related to consumer protection and education, innovation, and more.   Kraninger was providing the bureau's semi-annual report to Congress this week; she testified before the House Financial Services Committee Wednesday. Ahead of both hearings, NAFCU Vice President of Legislative Affairs shared with lawmakers NAFCU's support of CFPB efforts to target bad actors and encouraged more regulatory relief for credit unions.

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Goldman CEO on how he’s turning the Wall Street powerhouse into a giant digital bank for consumers

Goldman Sachs CEO David Solomon said Thursday that the company is just starting to build out its consumer-facing digital banking offerings. “We’re building for the long term. I feel good about the progress that we’re making,” the Goldman chief said in an interview with CNBC’s Wilfred Frost. “I think we’re in the early stages of building a digital platform for consumers that gives them more information, more tools are their disposal.”

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Senators Press CFPB To Dig Into Problems With Public Service Student Loan Program

Four U.S. senators told the head of the nation's top consumer protection agency Thursday that they want her to launch examinations into serious problems with a program designed to offer loan forgiveness to public service workers. An NPR story this week revealed that the Consumer Financial Protection Bureau attempted such examinations but was thwarted by the Trump administration's Department of Education.

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Bill seeks to lower the cost of higher education

The House Committee on Education and Labor has introduced a measure designed to overhaul the higher education system by lowering the cost of college for students and families.   Lawmakers said the College Affordability Act would improve the quality of higher education through stronger accountability while expanding opportunities by providing students the support and flexibility needed for success.

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Three New California Laws Will Impact Consumer Credit

Three new laws signed by California Gov. Gavin Newsom in recent days will impact consumer credit in the state by capping interest rates on payday and other consumer installment loans, giving automatic exemptions for bank account levies and removing exemptions for attorneys and mortgage loans from the Rosenthal Act.

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CFPB’s Debt Collection, Payday Lending Rules Come Under Fire In Congressional Hearing

Payday lending practices again came under fire Wednesday (Oct. 16) from members of the U.S. Congress, as Kathy Kraninger, director of the Consumer Finance Protection Bureau (CFPB), faced lawmakers during their semi-annual review of the agency. The hearing, before the U.S. House Committee on Financial Services, came a few days after U.S. Rep. Ayanna Pressley of Massachusetts introduced new legislation that would require the CFPB to regulate the debt collection industry. During the Wednesday hearing, U.S. Rep. Maxine Waters of California blasted the agency and Kraninger over debt collection, along with payday lending rules.

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Fed Beige Book reports ‘slight’ growth in some regions

The outlook: The U.S. economy seem to be slowing a bit, and only expanded at “a slight to modest pace” since early September, according to the latest Federal Reserve Beige Book. The report, basically a summary of anecdotes collected by the central bank from its business contacts across the country, suggested the economy was slightly weaker than in the summer. Business activity varied across the country, with Midwest and Great Plains report more downbeat than the southern and western regions. The early impact of the strike at General Motors GM, -0.70%  was seen as limited.

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Written Testimony of Kathleen L. Kraninger, Director, Consumer Financial Protection Bureau, Before the Senate Committee on Banking, Housing, and Urban Affairs

Chairman Crapo, Ranking Member Brown, and distinguished Members of the Committee thank you for the opportunity to present the Consumer Financial Protection Bureau’s most recent Semi-Annual Report to Congress.    The Bureau presents these Semi-Annual Reports to Congress and the American people in fulfillment of its statutory responsibility and commitment to accountability and transparency.  The Bureau’s Spring 2019 (October 1, 2018, to March 31, 2019) Semi-Annual Report meets this mandate. My testimony is intended to highlight the contents of this Semi-Annual Report (Report).

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FTC Releases FY 2019 National Do Not Call Registry Data Book

The Federal Trade Commission today issued the National Do Not Call Registry Data Book for Fiscal Year 2019. The FTC’s National Do Not Call (DNC) Registry lets consumers choose not to receive most legal telemarketing calls. The data show that the number of active registrations on the DNC Registry increased over the past year, while the total number of consumer complaints decreased for the second year in a row.

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Attorney General James Urges CFPB To Abandon Proposed Rules That Promote Discrimination In Mortgage Lending

NEW YORK – New York Attorney General Letitia James submitted two comment letters urging the Consumer Financial Protection Bureau (CFPB) not to adopt two new rules, which would undermine the ability to enforce fair lending laws and prevent discrimination against communities of color in the mortgage lending market.

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CFPB Private Education Loan Ombudsman Issues 2019 Annual Report

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) Private Education Loan Ombudsman issued today the 2019 Annual Report showing that from September 1, 2017 through August 31, 2019 the Bureau handled approximately 20,600 complaints related to private or federal student loans. Of these, there were approximately 6,700 private student loan complaints and 13,900 federal student loan complaints. The report also provides policymakers with a series of recommendations.

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Ponzi Scheme Promoter Sentenced to 22 Years in Federal Prison for $396 Million Scheme—The Largest Ever Charged in Maryland

 Baltimore, Maryland – U.S. District Judge Richard D. Bennett today sentenced Kevin B. Merrill, age 54, of Towson, Maryland, to 22 years in federal prison, followed by three years of supervised release, for conspiracy and wire fraud arising from a $396 million investment fraud scheme that operated from 2013 through September 2018, with an additional $260 million in attempted investments at the time of Merrill’s arrest.  Judge Bennett also ordered Merrill to pay restitution in the full amount of the victims’ losses, which will be determined later, but which is at least $189,166,116.  Judge Bennett will also enter an order of forfeiture, with the exact amount of forfeiture still to be determined.

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Written Testimony of Kathleen L. Kraninger, Director, Consumer Financial Protection Bureau Before the House Committee on Financial Services

Chairwoman Waters, Ranking Member McHenry, and distinguished Members of the Committee thank you for the opportunity to present the Consumer Financial Protection Bureau’s most recent Semi-Annual Report to Congress.  The Bureau presents these Semi-Annual Reports to Congress and the American people in fulfillment of its statutory responsibility and commitment to accountability and transparency.  The Bureau’s Spring 2019 (October 1, 2018, to March 31, 2019) Semi-Annual Report meets this mandate. My testimony is intended to highlight the contents of this Semi-Annual Report (Report).

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Google Effectively Bans PayDay Lenders from Advertising their Loans

Google has banned high-interest rate lenders from the Google Play app store. First reported by, the move was said to be made to protect people from “exploitive personal loan terms.” The report quoted a Google spokesperson: “Our Google Play developer policies are designed to protect users and keep them safe. We expanded our financial-services policy to protect people from deceptive and exploitative personal-loan terms.” Google has long managed what could, or could not, be advertised on its platform.

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RMAI Certified Members Applaud National Cybersecurity Awareness Month

October 16, 2019 (Sacramento, CA): Held every October, National Cybersecurity Awareness Month (NCSAM) is a collaborative effort between government and industry to raise awareness about the importance of cybersecurity and ensure all Americans have the resources they need to be safer and more secure online. This year’s overarching message – Own IT. Secure IT. Protect IT. – will focus on key areas, including citizen privacy, consumer devices, and ecommerce security.

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Site that sells stolen credit card data hacked by cyber vigilantes

BriansClub, an underground site that offers more than 26 million stolen credit cards for sale, has been hacked in an apparent case of cyber vigilantism.
Detailed today by security researcher Brian Krebs, the attack enabled those behind it to share the stolen card details with multiple sources who work with financial institutions to identify and monitor or reissue cards that show up for sale on underground markets.

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VanderSloot announces proposed reforms to medical billing and collection in Idaho

Melaleuca CEO Frank VanderSloot wants to change the way medical debt is handled in Idaho, and now he has revealed his plan to make those changes happen. VanderSloot spoke to a crowd of about 50 Idaho legislators at Melaleuca Global Headquarters.

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Why Medical Data is 50 Times More Valuable Than a Credit Card

As the healthcare company lurches into embracing cloud-based technology, protecting medical data has become even more essential. While banks and other financial organizations have long been data security experts, the healthcare field has been a bit slower to protect its data, which can often be more valuable than credit cards and bank account numbers.

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Debt Collection Industry Needs Language Access Laws, Says New York City Report

September 2019 report by the New York City Department of Consumer Affairs (DCA) recommends legislation to require debt collectors to provide language access services to Limited English Proficiency (LEP) consumers.

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How Has FTC Data Security Enforcement Changed?

In the wake of a federal appeals court ruling last year vacating a Federal Trade Commission enforcement action against cancer testing laboratory LabMD, the FTC's data security consent orders are becoming far more detailed and rigorous, says former FTC attorney Julie O'Neill. In June 2018, a U.S. appellate court ruled in favor of LabMD, vacating an FTC consent order that, among other things, required LabMD to establish a comprehensive information security program. In its ruling, the appeals court wrote that the FTC's consent order against LabMD "does not enjoin a specific act or practice. Instead, it mandates a complete overhaul of LabMD's data security program and says precious little about how this is to be accomplished."

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Minnesota lawmakers unveil plan for legislation aimed at robocalls

Minnesota lawmakers on Monday announced plans for legislation to crack down on invasive and predatory robocalls. Rep. Zack Stephenson (DFL- Coon Rapids), House Commerce Chair Laurie Halverson (DFL- Eagan) and Majority Leader Ryan Winkler (DFL-Golden Valley) announced the plans in an effort to strengthen consumer protection rights for Minnesotans. "Minnesotans are ready for this robo-call madness to stop," Stephenson told reporters at a Capitol news conference on Monday. "We have the tools to make that happen. It's time to put them to work."

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Exclusive: Turf War Blocked CFPB From Helping Fix Student Loan Forgiveness Program

Starting early last year, the nation's most powerful consumer protection agency sent examiners into companies that run student loan call centers to try to fix a troubled loan forgiveness program. But the Department of Education blocked the bureau from getting the information it needed, NPR has learned. The Public Service Loan Forgiveness Program is designed to help firefighters, military service members, nonprofit workers and others. But thousands of people say they were treated unfairly and rejected.

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This week: Kraninger gives CFPB update as Congress returns

After a two-week recess, the House and Senate are back in session today. NAFCU will continue its advocacy efforts on a number of key credit union issues, including the FY 2020 National Defense Authorization Act, and CFPB Director Kathy Kraninger will provide an update on the bureau's efforts to the House Financial Services Committee and Senate Banking Committee Wednesday and Thursday, respectively.

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PayThink There’s no time to dither over real-time payments

The future of the real-time payments landscape in the U.S. has never been more unclear. As it stands, The Clearing House RTP is the only live real-time payment network in the U.S. The Fed has announced its intention to build the FedNow network, which will be effectively a competitor to TCH, but we don’t know when this network will launch. To add to the confusion, Zelle is sometimes described as real time but it only clears in real time (transactions still settle via either traditional ACH or debit card rails), while Same Day ACH clears and settles in a few hours depending on the submission time, making it viable for some "real-time" use cases.

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SEC, CFTC, FinCEN Warn Crypto Industry to Follow US Banking Laws

The heads of three U.S. financial regulators warned the cryptocurrency industry to abide by banking laws in a joint statement published Friday. The statement, signed by Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert, Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco and Securities and Exchange Commission (SEC) Chairman Jay Clayton, “reminds” actors in the crypto space that they must comply with various banking and financial services laws in the U.S., regardless of what they call their cryptocurrencies or tokens. The agencies referred to the Bank Secrecy Act (BSA), which outlines how different financial services businesses should register with regulators.

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The next Elizabeth Warren? How Katie Porter is shaking up House banking panel

WASHINGTON — Rep. Katie Porter is less recognizable nationally than other progressive Democrats elected to the House in 2018. But among watchers of the Financial Services Committee, she has become perhaps the fiercest disruptor in Congress since Elizabeth Warren. The California Democrat has quickly found the spotlight in her first year on the panel, winning admirers who see her as a champion for the consumer as well as critics who view her more as a troublemaker.

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As US banks battle interest rates, loans may be silver lining

The Fed’s recent rate cuts will be in the spotlight when the big banks kick off the third-quarter earnings season this week. Citigroup, Goldman Sachs, JPMorgan and Wells Fargo are set to report ahead of Tuesday’s opening bell while Bank of America and Morgan Stanley will release their results in the days that follow.

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CFPB to Launch Consumer Financial Law Taskforce

The Consumer Financial Protection Bureau (CFPB) is launching a taskforce to streamline and update federal consumer financial laws. According to a statement issued by the agency, the new Taskforce on Federal Consumer Financial Law will examine the existing legal and regulatory environment facing consumers and financial services providers and offer ideas to “improve and strengthen consumer financial laws and regulations.” The taskforce will also produce research and legal analysis of consumer financial laws with a focus on “harmonizing, modernizing, and updating the enumerated consumer credit laws—and their implementing regulations—and identifying gaps in knowledge that should be addressed through research, ways to improve consumer understanding of markets and products, and potential conflicts or inconsistencies in existing regulations and guidance.”

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Governor Newsom signs legislation to fight predatory lending

SACRAMENTO — Governor Gavin Newsom today signed into law a measure protecting consumers from predatory lending practices that create “debt traps” for families already struggling financially. AB 539 by Assemblymember Monique Limόn (D-Santa Barbara) promotes affordable and accessible credit for consumers and encourages responsible lenders to offer safer loan alternatives. The bill bars payday lenders from charging high interest rates – sometimes as high as 200 percent – on loans between $2,500 and $10,000.

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National Creditors Bar Association 2019 Fall Conference

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October 16 - 19 , 2019


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September 15 - 17 , 2020


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