At a glanceFriday, March 27, 2020

Collection Industry News At A Glance - March 27, 2020
Friday March 27, 2020
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AG’s Office Issues Emergency Regulation to Protect Consumers from Harmful Debt Collection Practices During Covid-19 Emergency

Boston — Attorney General Maura Healey announced today that her office has filed an emergency regulation designed to protect consumers from unfair and deceptive debt collection practices during the COVID-19 crisis.   The new regulation, 940 CMR 35.00, filed with the Secretary of State’s Office and effective immediately, prohibits creditors from engaging in methods of debt collection that can require people to leave their homes or have in-person contact, including filing new lawsuits against Massachusetts consumers, visiting their homes or places of work, or repossessing their cars, among other protections. The AG’s emergency regulation also prohibits debt collection agencies and debt buyers from making unsolicited debt collection telephone calls to consumers.

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Attorney General Becerra: Federal Appeals Court Upholds Judgment Against Dish Network for Illegal Telemarketing Calls

SACRAMENTO – California Attorney General Xavier Becerra today issued the following statement in response to an appellate court decision that upholds a lower court judgment and injunction against Dish Network. Today’s ruling in the Seventh Circuit Court of Appeals affirms the June 2017 trial court judgment holding the company accountable for engaging in an illegal nationwide telemarketing campaign. Dish Network, both directly and through its authorized direct marketing businesses, made millions of unwanted calls to people on the Do Not Call Registry and tens of millions of illegal robocalls, many directed to California residents

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Director Kraninger Remarks During Financial Stability Oversight Council Meeting

During this challenging time for our nation and the world, the Consumer Financial Protection Bureau (or CFPB) is diligently working to protect consumers in the financial services marketplace and providing Americans with much needed peace of mind.

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Distressed Debt Balloons to Almost $1 Trillion, Nears 2008 Peak

(Bloomberg) -- The amount of distressed debt in the U.S. has quadrupled in less than a week to nearly $1 trillion, reaching levels not seen since 2008 as the collapse of oil prices and fallout from the coronavirus shutters entire industries across the globe. In total, the tally has ballooned to $934 billion of U.S. corporate bonds that yield at least 10 percentage points above Treasuries and loans that trade for less than 80 cents on the dollar, according to data compiled by Bloomberg. That’s nearly double the amount from less than a week ago. The total is probably even higher, because the calculation excludes debt of small-to-medium sized companies whose loans trade rarely, if at all.

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U.S. jobless claims surged to record 3.28 million last week

The number of Americans filing for unemployment benefits surged to a record 3.28 million last week as businesses shuttered and laid off workers as part of efforts to slow the spread of the coronavirus.  In the biggest insight yet into the economic toll thmic is already inflicting,e pande initial jobless claims in the week ended March 21 surged from 282,000 in the prior week and more than quadruple the previous record high of 695,000 in 1982, according to Labor Department figures released Thursday. The data date back to 1967.  Economists’ projections for the figure ranged as high as 4.4 million.

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Fed chair Powell says will provide nearly unlimited lending

WASHINGTON -- Jerome Powell says the Federal Reserve would provide essentially unlimited lending to support the economy as long as it is damaged by the viral outbreak. In an interview Thursday morning on NBC's “Today” show, the Fed chair said the bank's efforts are focused on helping the economy recover quickly once the threat from the virus has passed. Powell also acknowledged that the economy “may well be” in a recession, but said that this is a unique downturn in that it was caused by efforts to control the disease. The economy itself was strong before the outbreak began, he said.

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Mortgage applications drop by biggest amount in 11 years

The number of people applying for a mortgage — either to refinance or buy a home — plunged by the largest amount in more than 11 years, according to the Mortgage Bankers Association. The MBA’s index that measures application volume dropped 29.4% last week from the previous one. That was the biggest decrease — percentage-wise — since January 2009, the MBA found. Refinancing applications led the decline, falling 33.8% versus the previous week, while applications to purchase a home slipped 14.6%.

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Attorney General Josh Stein Takes Additional Steps to Protect North Carolina Consumers During COVID-19 Pandemic

(RALEIGH) Attorney General Josh Stein took two additional steps today to help protect North Carolinians as many face financial difficulties during the COVID-19 pandemic. Attorney General Stein is suspending all of the North Carolina Department of Justice’s collections efforts of state debts effective immediately and until further notice. He is also asking all local and municipal utilities to commit to maintaining access to water, power, gas, and other vital services for residents.  “North Carolinians who are struggling with their health, have been laid off from their job, or are facing cuts to their income in the wake of COVID-19 should not have to bear additional burdens that will further harm their health or their finances,” said Attorney General Josh Stein. “That’s why I’m suspending the Department of Justice’s debt collection efforts and why I’m asking local and municipal utilities to ensure that North Carolinians have continued access to water, gas, and power. Now, more than ever, we must do the right thing for fellow North Carolinians.”

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Attorney General Becerra Joins Multistate Letter Urging Secretary DeVos to Protect Student Loan Borrowers During COVID-19 Public Health Crisis

SACRAMENTO – California Attorney General Xavier Becerra today joined a multistate coalition of 27 attorneys general in submitting a comment letter to Secretary of Education Betsy DeVos calling on her to immediately implement emergency measures to protect federal student loan borrowers in the wake of the COVID-19 crisis. Under the Higher Education Relief Opportunities for Students Act of 2003 (“HEROES Act”), Secretary DeVos has the authority to waive or modify statutory or regulatory provisions applicable to student financial assistance programs during a national emergency.

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$2 trillion coronavirus stimulus bill gives student-loan borrowers six months of relief

Student-loan borrowers struggling to make payments as the coronavirus cripples parts of the U.S. economy will get a temporary break under the $2.2 trillion stimulus bill the Senate unanimously approved late Wednesday.  The Coronavirus Aid, Relief and Economic Security (CARES) Act lets student-loan borrowers take a six month break from making payments on their federally-backed student loans.

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Federal Agencies Encourage Banks, Savings Associations, and Credit Unions to Offer Responsible Small-Dollar Loans to Consumers and Small Businesses Affected by COVID-19

WASHINGTON, D.C. – Five federal financial regulatory agencies today issued a joint statement encouraging banks, savings associations, and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19.  The statement of the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency recognizes that responsible small-dollar loans can play an important role in meeting customers’ credit needs because of temporary cash-flow imbalances, unexpected expenses, or income disruptions during periods of economic stress or disaster recoveries.

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CFPB Provides Flexibility During COVID-19 Pandemic

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today announced that it is providing needed flexibility to enable financial companies to work with customers in need as they respond to the COVID-19 pandemic. The Bureau is postponing some data collections from industry on Bureau-related rules to allow companies to focus on responding to consumers in need and making changes to its supervisory activities to account for operational challenges at regulated entities.

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FTC Returns More than $3.1 Million to Victims of Student Loan Debt Relief and Credit Repair Scheme

The Federal Trade Commission is mailing checks totaling more than $3.1 million to consumers who were victims of a student loan debt relief and credit repair scheme.   Strategic Student Solutions (also doing business under other names) and its owner, Dave Green, settled FTC allegations that they charged consumers illegal upfront fees and falsely promised to reduce their student loan debt or monthly payments by enrolling them in student loan forgiveness or other programs. The FTC also alleged that the defendants falsely promised to apply monthly payments to consumers’ student loans and to improve their credit scores and histories.

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Big U.S. banks offer forbearance on mortgages -California Governor

SAN FRANCISCO, March 25 (Reuters) - Four of the nation’s five largest banks have agreed to postpone foreclosures and offer forbearance on mortgage payments for three months for homeowners impacted by COVID-19, California Governor Gavin Newsom said on Wednesday. But while JP Morgan Chase, US Bank, Wells Fargo , Citi and 200 state-chartered banks and credit unions all agreed to offer 90 days of protections, Bank of America had “unfortunately” only committed to 30 days, he said.

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Small-dollar loans highlight banks’ coronavirus relief efforts

With the novel coronavirus pandemic shutting down nearly every aspect of daily life, banks have begun extending cheap credit and other forms of relief to help customers withstand the economic shocks. Liberty Bank in Middletown, Conn., for example, will soon begin making unsecured consumer loans of up to $5,000 at no interest for its customers. The $5.9 billion-asset bank has committed $5 million to that loan program to go along with other customer relief efforts.

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In recognizing businesses and non-profits for their achievements and commitment to quality in the workplace, FMA was recognized at the annual Better Business Bureau Awards of Excellence on March, 2020. Recognized as a Winner of Distinction, this was the sixth time (2015-2020) to be recognized by the Better Business Bureau for service excellence.

When asked what it means to FMA to receive this recognition, Mike Janakes, president, states “We work hard to provide top notch service to our customers and clients and it is an honor to be recognized for our efforts.”

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A Rent Wipeout Could Ignite a Mortgage Crisis

(Bloomberg Opinion) -- The rent is too high. And that’s causing consternation across Wall Street desks still traumatized by the 2008 financial crisis.

As the days go by in an unprecedented shutdown of the U.S. economy to slow the coronavirus outbreak, any amount of rent looks increasingly difficult to cover for a wide swath of Americans, from recently fired service workers to local small-business owners. Unfortunately for those most affected, these payments can’t simply be wiped out — at least, not without dire repercussions. My Bloomberg Opinion colleague Noah Smith wrote a column this week arguing that people need a break on all sorts of debts. But when it comes to rent, there’s pretty much no way around people eventually paying what they owe, ideally with the help of the U.S. government, or else risk “turning a health crisis into a banking crisis.”

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Coronavirus & Crypto Lending: Could the Crisis Bring New Clients?

The crisis brought on by the coronavirus has been a shock to the entirety of the global economy. All around the world, every industry is scrambling to find ways to adjust to the new paradigm that was thrust into reality several weeks ago. One of the most visible points of damage has been global financial markets. In just about every corner of the financial world, markets have cliff-dived, sending investors into a frenzy and forcing companies to build new strategies and contingency plans.

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DeVos halts collection of defaulted federal student loans

The Trump administration has stopped seizing the wages, tax refunds and Social Security benefits of people who are in default on their federal student loans, an administration official confirmed to POLITICO on Tuesday.

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Mortgage industry lays out its case for widespread coronavirus emergency relief

The mortgage industry’s biggest trade and lobbying groups are banding together to push the federal government for widespread relief for all borrowers affected by the coronavirus outbreak in the U.S.

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The top reasons people get into credit card debt—and how to avoid them, from an Equifax expert

Nobody wants to fall into debt, but it happens all too easily — and quickly. Some of the most common expenses that throw people into credit card debt are unexpected medical bills, emergency expenses and even just everyday spending, such as on groceries, that adds up. But according to Beverly Anderson, president of global consumer solutions at Equifax (one of the three main credit bureaus), the top reasons people get into credit card debt are actually quite predictable since the majority of people who take it on make the following three mistakes.

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House Democrats unveil bill to cancel $30,000 in student debt per borrower amid coronavirus

House Representatives Ayanna Pressley (D-MA) and Ilhan Omar (D-MN) are proposing to cancel student debt with new legislation aimed at helping borrowers adversely affected by the coronavirus, or COVID-19. The legislation, called the Student Debt Emergency Relief Act, proposes the cancellation of at least $30,000 in outstanding debt, tax-free, and proposes that the Education Department (ED) “immediately assume responsibility” for the monthly payments of borrowers who hold federal loans while suspending involuntary collections or garnishments of wages or federal income tax returns amid the crisis.

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Media Advisory: Consumer Financial Protection Bureau Resources for Consumers During COVID-19 Pandemic

The Consumer Financial Protection Bureau (Bureau) has recently released several resources to help consumers take steps to protect their finances during the COVID-19 pandemic, including how to avoid financial scams and submit complaints to the Bureau.

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As the pandemic coronavirus (COVID-19) spreads throughout the world, reports from the Centers for Disease Control and World Health Organization provide guidelines for quarantine, social distancing (quite the challenge for traditional call centers) and good hygiene. The effects are already being seen in the economy, strained health care systems and in shortages of necessary supplies. The US Federal Reserve initiated an emergency interest rate reduction (the largest one-time reduction since the 2008 recession) to stabilize the economy, followed by another reduction to 0%. Layoffs are intensifying and unemployment is soaring as economists predict a global recession. 

Credit Issuers and ARM companies are actively deploying aspects of their business continuity plans to meet the safety needs of employees, and business needs of their customers. It has become glaringly obvious, that while companies have developed disaster readiness policies, most of these were predicated on singular sites going offline and not on a global pandemic with much further reaching implications and global considerations.

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Cory Booker wants to ban banks from charging overdraft fees during coronavirus outbreak

About half of Americans report the coronavirus pandemic is already having a negative effect on their income. To combat their worries about paying the bills, two Democratic senators are introducing a bill that would keep consumers from paying unnecessary bank fees.

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JPMorgan plans firm-wide hiring freeze amid virus uncertainty

JPMorgan Chase & Co. froze hiring across most of the firm as millions of people stay at home to help stem the spread of the coronavirus, according to people familiar with the matter. The bank asked managers in businesses including the corporate and investment bank, the consumer unit, and the asset- and wealth-management group to review job postings and pull listings for roles that don’t need to be filled immediately, said the people, who asked not to be identified discussing the private plans. 

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Agencies Provide Additional Information to Encourage Financial Institutions to Work with Borrowers Affected by COVID-19

WASHINGTON, D.C. – The federal financial institution regulatory agencies and the state banking regulators issued an interagency statement encouraging financial institutions to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications.

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FTC Sends More than $6.9 Million in Refunds to Victims of Office Supply Scam

The Federal Trade Commission is sending refunds totaling more than $6.9 million to small businesses, non-profits, and government agencies targeted by an office supply telemarketing scam that charged them for products they did not order. The FTC alleged that defendants’ victims included child care centers, schools, and police and fire departments.

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Agencies tell banks they will not be criticized for loan modifications

WASHINGTON — Five federal banking agencies and a trade group for state banking regulators issued guidance Sunday encouraging banks to make loan modifications for borrowers affected by the coronavirus. The joint statement by the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, National Credit Union Administration and Conference of State Bank Supervisors said banks will not be required to categorize those modifications as troubled debt restructurings.

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Banks supplement benefits to help employees affected by coronavirus

As the novel coronavirus spreads throughout the U.S., banks are adding extra benefits for employees working in branches as well as those pulled away from work to deal with illness and caregiving responsibilities. They are paying bonuses to front-line employees still working, or offering extra paid time off for those who are sick or self-quarantined, financial assistance with child care, or virtual doctors’ appointments. In a global pandemic, the added benefits aren’t just the right thing to do for employees, they’re also a valuable public health measure that could help slow the disease’s spread, bankers say.

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CFPB urged to protect elderly from pandemic scammers

WASHINGTON — As the coronavirus pandemic continues to make Americans economically vulnerable, lawmakers and consumer advocates are calling on the Consumer Financial Protection Bureau to protect older Americans from financial scams. Earlier this week, House Republicans warned CFPB Director Kathy Kraninger in a letter that the CFPB’s guidance on financial abuse of older adults has not been updated since 2013. And other consumer advocates are calling on the agency to give financial institutions better tools to protect customers against scams related to the pandemic.

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