At a glanceWednesday, November 06, 2019

Collection Industry News At A Glance - November 6, 2019
Wednesday November 6, 2019
Mid Week Newsletter:
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Articles

 
Third-Party Debt Collections Industry at a Crossroads as Slow Technology Advancements Impede Industry

The collections industry is at a crossroads. Collections balances in the U.S. continued to grow in the last decade, yet at the same time, the number of third-party collections companies declined dramatically. A new TransUnion (NYSE: TRU) and Aite Group report, The State of Third-Party Collections 2019, found that contraction in the industry is largely due to strong consumer credit performance combined with a regulatory environment that has slowed modernization efforts.

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$11 trillion U.S. mortgage market has a shadowy new player

Financial regulators led by the Treasury's Steven Mnuchin and the Federal Reserve's Jerome Powell have been put on notice about the risk of an economically damaging cash crunch in the $11 trillion home mortgage market. Behind the concern aired recently at the Financial Stability Oversight Council headed by Secretary Mnuchin: the rapid growth of so-called shadow banks in the origination and servicing of home loans, especially riskier ones.

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4 Out of 5 People Who Use Digital Banks Would Switch to Amazon

Nearly two-thirds of U.S. consumers are thinking about opening a new savings account, and about half of them (47%) say they would be comfortable with an online-only provider like Ally, Discover or Synchrony, according to a survey conducted by the Consumer Bankers Association and Novantas.

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Fed survey reveals strong loan demand

The Federal Reserve Monday released its third-quarter senior loan officer opinion survey (SLOOS), which revealed "stronger loan demand, but tighter underwriting standards, particularly for subprime applicants," said NAFCU Chief Economist and Vice President of Research Curt Long.

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California DMV data breach left drivers’ Social Security numbers exposed: report

Thousands of California drivers had their Social Security numbers exposed in a data breach that gave federal agencies unauthorized access, the California Department of Motor Vehicles (DMV) announced Tuesday, according to a report.   The breach also showed which drivers don’t have Social Security numbers, making it especially concerning for illegal immigrants who were issued driver’s licenses by the state, The Los Angeles Times reported. The state had promised the drivers that immigration agencies would not gain access to their information.

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AT&T to Pay $60 Million to Resolve FTC Allegations It Misled Consumers with ‘Unlimited Data’ Promises

AT&T Mobility, LLC, will pay $60 million to settle litigation with the Federal Trade Commission over allegations that the wireless provider misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds.   In a complaint filed in 2014, the FTC alleged that AT&T failed to adequately disclose to its unlimited data plan customers that, if they reach a certain amount of data use in a given billing cycle, AT&T would reduce—or “throttle”—their data speeds to the point that many common mobile phone applications, such as web browsing and video streaming, became difficult or nearly impossible to use.

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Deep Dive: How Demand For Instant Payments Is Affecting Lending

Drafting, applying and being approved for loans can be complicated and drawn out processes for consumers and business owners alike. Borrowers must often complete hefty amounts of paperwork before they are approved, and payments disbursed via paper checks can add delays. Lenders are under more pressure to meet expectations and compete as the demand for instant payouts grow, but delivering faster or instant loan disbursements is easier said than done. Lenders must balance delivering the speed consumers demand while offering stringent authentication measures.

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CFPB Performs Well on FISMA Audit

The Consumer Financial Protection Bureau (CFPB) performed well on its fiscal year 2019 FISMA audit, reaching a Level 4 and meeting the threshold for effectiveness, according to a report released October 31 by CFPB’s inspector general. The audit found that while most of the agency’s results matched its FY18 audit, CFPB improved its capabilities in the Identify domain, pushing the maturity level up to Level 4. The improvements came in CFPB’s risk management program, where the bureau developed a plan for insider threat, used automation to track the life cycle of hardware, and conducted an agency-wide risk assessment.

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AOL Has Highest Email Breach Rate, Gmail The Lowest: Study

There is nowhere to hide when it comes to data breaches. A new study by Who is Hosting This found that most common email addresses are vulnerable — and so are their providers. For instance, 99.83% of emails with AOL.com have been breached, the company says. Next are MSN (95.12%), Hotmail (87.15%), Yahoo (86.64%) and Gmail (74.09%).

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Jobs: Companies struggle to find skilled cybersecurity workers as attacks intensify

WASHINGTON — As internet crimes and abuse stalk the globe, cybersecurity firms are having trouble attracting and keeping skilled workers to help protect networks. Today some 2.8 million professionals work in cybersecurity around the globe, but an additional 4 million trained workers would be needed to close the skills gap and properly defend organizations, according to the 2019 ISC2 Cyber Security Workforce Study. The global nonprofit is the largest association of certified cybersecurity professionals. The data reveals that in the U.S. alone, nearly a half million workers would be needed to fill the shortage.

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BankThink CFPB can do better by fintechs than a ‘policy tool’

The CFPB recently finalized three policy tools meant to promote financial innovation by offering some regulatory certainty. But the agency may need to go further to convince fintechs such tools are safe and beneficial. Two of those tools — the no-action letter and the compliance assistance sandbox — equip the CFPB with broad authorities to address various regulatory questions, including fair-lending risk associated with the use of machine learning and alternative data in credit underwriting.

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Bank failure in New Jersey is nation’s third in a week

Regulators have now closed three banks in the span of a week with the failure late Friday of City National Bank of New Jersey in Newark. City National Bank of New Jersey was shuttered by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corp. as receiver. City National’s operations were sold to Industrial Bank in Washington, D.C. Industrial is a unit of IBW Financial

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Erasing student debt would be a small stimulus but would create a ‘moral hazard,’ Moody’s says

Forgiving student loan debt would provide a modest bump to the economy but could risk “moral hazard” and eventually make the problem worse, according to Moody’s Investors Service. Some Democratic presidential candidates, including Sens. Bernie Sanders and Elizabeth Warren, have proposed wiping out a debt load that has exploded from $363 billion in 2005 to nearly $1.5 trillion now.

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District Court approves $12.5 million settlement in TCPA class action

On October 28, the U.S. District Court for the Northern District of Illinois granted final approval of a $12.5 million TCPA class action settlement between a group of consumers and three cruise lines and their marketing group (collectively, “defendants”). According to the opinion, a consumer filed the action against the defendants alleging they violated the TCPA’s prohibition of the use of an autodialer without prior consent. While the motion for class certification was pending, the parties reached an agreement-in-principle for a class-wide settlement.

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Nebraska payday lending ballot campaign gets $485,000 boost

LINCOLN, Neb. (AP) - A ballot campaign seeking to tighten the cap on how much interest payday lenders can charge in Nebraska has gotten a major boost from a national donor, increasing the odds that it will succeed in placing the issue on the 2020 ballot.

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The Next Wave of Federal Lawsuits Facing ARM Companies is Approaching

"ADA Filings Outpace TCPA Filings in 2019"

Today, a new threat faces virtually every company operating in the ARM industry.  A threat where violations occur passively, without any action or activity required on the part of the company.  A threat from consumer litigation that could conceivably result in an exponentially greater number of filings than the TCPA, and by current statistics, will likely surpass the number of TCPA filings in 2019 by a factor of 2X or more.  And, all you need to do to potentially violate the statute is launch or operate a public facing website or collection application.

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Attorney General Ellison sues companies and individuals running fraudulent student loan debt “forgiveness” scheme, obtains court order immediately halting conduct

Minnesota Attorney General Keith Ellison announced today that his office has joined with the Consumer Financial Protection Bureau (CFPB) and other jurisdictions in filing suit against three southern California companies and their owners and officers for running a fraudulent scheme that falsely promises borrowers student-loan forgiveness.

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FTC Releases Results of 2017 Mass-Market Consumer Fraud Survey

The Federal Trade Commission has released the results of a comprehensive survey conducted in 2017 that examined the prevalence of mass-market consumer fraud, how it is perpetrated, and what factors are associated with a greater likelihood that a consumer may fall victim to fraud. The FTC conducted similar surveys in 2003, 2005, and 2011.   The survey results show that 15.9 percent of the respondents were victims of fraud in 2017, which represents approximately 40 million U.S. adults.

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Agencies Announce Dollar Thresholds in Regulations Z and M for Exempt Consumer Credit and Lease Transactions

The Consumer Financial Protection Bureau (CFPB) and Federal Reserve Board today announced the dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) that will apply for determining exempt consumer credit and lease transactions in 2020. These thresholds are set pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amendments to the Truth in Lending Act and the Consumer Leasing Act that require adjusting these thresholds annually based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)

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Consumers Get More Control Over the Banking Data Shared With Financial Apps

Financial apps such as Plaid and Intuit’s Mint help consumers with budgeting, but they may also vacuum up lots of personal data from bank accounts, which could compromise privacy and potentially lead to security risks. Banks have begun giving their customers tools to safely connect to these apps and control what data is shared. Bank of America, Chase, and Wells Fargo have created dashboards to let customers decide what information to share, and experts say more consumers should use them. For example, you may want to provide your checking and credit card balances to a budgeting app but not the details of your mortgage.

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Will the Supreme Court Decimate the CFPB? Latest Developments

Even though the Supreme Court generally moves relatively slowly, the Court’s recent decision to grant certiorari in the CFPB v. Seila Law case is forcing courts and litigants to adjust quickly. And the Supreme Court is itself taking a number of procedural steps to move the case forward. What happens next could reshape consumer financial regulation for years to come.

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How Banks Can Beat Fintechs in the War for Millennials and Gen Z

The accepted wisdom among many in financial services is that younger consumers — more focused on ethics and integrity generally — are more skeptical of financial institutions, and prefer to deal with (or to work for) the most innovative companies. New research based on input from thousands of consumers around the world basically throws cold water on those two notions.

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Bureau hasn’t budged on cutting payday loan protections

WASHINGTON (AP) — The Consumer Financial Protection Bureau has not budged on its June decision cutting additional protections.   “There was insufficient evidence and legal support for these requirements,” CFPB Director Kathleen Kraninger wrote in a Sep. 23 letter to Rep. Maxine Waters, D-California, who is chairwoman of the House Financial Services Committee and a critic of the agency’s move.

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Banks are using their Washington clout to stomp on the tech industry

Banks are using their long-established relationships on Capitol Hill and in regulatory agencies to undermine a relative newcomer struggling to get traction in Washington: the tech industry.   The battle of corporate titans is brewing as technology companies look to disrupt what Facebook's Mark Zuckerberg calls the "stagnant" financial industry by giving consumers new ways to pay for things and obtain credit.

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Consumer Financial Protection Bureau Announces Action Against Student Loan Debt Relief Operation

Today the Consumer Financial Protection Bureau (Bureau), along with the Minnesota Attorney General’s Office, North Carolina Department of Justice, and the Los Angeles City Attorney, announced an action to halt a student-loan debt-relief operation engaged in allegedly unlawful conduct and consisting of several related companies: Consumer Advocacy Center Inc., which does business as Premier Student Loan Center; True Count Staffing Inc., also known as SL Account Management; and Prime Consulting LLC, which is known as Financial Preparation Services. Defendants also include Albert Kim, Kaine Wen, and Tuong Nguyen, whom the Bureau alleges substantially assisted the student-loan debt-relief companies. The Bureau alleges that since at least 2015, the debt-relief companies operated as a common enterprise and deceived thousands of federal-student-loan borrowers and charged over $71 million in unlawful advance fees in connection with the marketing and sale of student-loan debt-relief services to consumers.  

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Hackers finding ways to exploit automotive software to overtake cars

A new report from IntSights details the many ways cybercriminals break into a new generation of highly digitized cars. Over the last ten years cars have become packed full of new technology that makes it easier to play music and movies, take calls, or get directions all from your dashboard. But this digitization has come at a cost, giving cybercriminals a seemingly endless amount of access points to take over vehicles.

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Portfolios For Sale

 
$40,974,307 Retail
BAL Financial LLC

(617) 595-5794

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$12,166,639 Credit Cards
BAL Financial LLC

(617) 595-5794

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$978,034.70 Consumer Loans
DSP Holdings, Inc., dba Debt Sales Partners

(330) 573-8448

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$936,976.80 Payday Loans
DSP Holdings, Inc., dba Debt Sales Partners

(330) 573-8448

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$4,078,746.27 Consumer Loans
DSP Holdings, Inc., dba Debt Sales Partners

(330) 573-8448

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$6,831,131.79 Medical
DSP Holdings, Inc., dba Debt Sales Partners

(330) 573-8448

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Profiles

 

   Agency 

Senibor Inc

(877) 957-5501

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   Debt Buyer 

Washington Networks LLC

(877) 215-2781

 

Industry Events

 
FTC and CFPB to Host December Workshop on Accuracy in Consumer Reporting

FTC and CFPB

Workshop to focus on issues affecting the accuracy of both traditional credit reports and employment, tenant background screening reports The workshop, which is free and open to the public, will be at the Constitution Center, 400 7th St., SW, Washington, D.C., and will be webcast live on the FTC’s website.

December 10 - 10 , 2019

Amanda Koulousias Bureau of Consumer Protection 202-326-3334

2019 CFPB Research Conference

CFPB



December 12 - 13 , 2019
RMAi Annual Conference



February 04 - 06 , 2020

Questions about registration or sponsorship? Contact Sylvia Done at sdone@rmaintl.org or 916-482-2462

Collection and Recovery Solutions 2020

Collection & Recovery Solutions - produced by Resource Management Services, Inc.

10440 Pioneer Blvd #2
Santa Fe Springs , CA
May 06 - 08 , 2020

562-906-1101

Debt Connection Symposium & Expo 2020

Resource Management Services, Inc.

Red Rock Casino Resort & Spa
11011 W Charleston Blvd
Las Vegas, NV 89135

September 15 - 17 , 2020

562-906-1101

More information about Resource Management Services, Inc.
More information about Debt Connection Symposium
More information about RMN Networking
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