At a glanceWednesday, May 06, 2020

Collection Industry News At A Glance - May 6, 2020
Wednesday May 6, 2020
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Convoke Introduces Debt Settlement Directory

ARLINGTON, Va., May 6, 2020 /PRNewswire/ -- Convoke, a leader in SaaS solutions for the debt collection market, today announced the most recent software update to its debt collections compliance and management hub. Each year, Convoke develops and releases several updates to its platform to support its clients' evolving needs. With this release, Convoke is pleased to introduce the Debt Settlement Directory, as well as other enhancements which include the addition of Data Group elements related to COVID-19.

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Opinion: How the coronavirus pandemic could forever change home buying and mortgage lending

Extraordinary times call for extraordinary measures. Business leaders in all parts of the U.S. economy are taking bold steps to respond to the coronavirus crisis. Those of us in the mortgage industry are implementing reforms that will be long-lasting in terms of how lenders operate and how consumers obtain financing. Here are three ways in which the crisis may permanently affect the housing sector.

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CFPB Seeks Health Guidance for Bringing Employees Back to Offices

The Consumer Financial Protection Bureau is looking to proactively confront the needs that will accompany its federal workers’ return to pre-pandemic business-as-usual in the eventual aftermath of COVID-19. The agency, charged with ensuring that America’s financial institutions are fair to its citizens, on Monday released a request for information seeking “public health preparedness and medical advisory services to advise senior leadership on a variety of health and operational matters” in response to the coronavirus pandemic and to help ease its impacts on the CFPB workforce. 

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U.S. household debt reached $14.3 trillion, credit standards tightened in first quarter

(Reuters) - American households added $155 billion of debt in the first quarter and overall debt levels rose to a new record at $14.30 trillion, the Federal Reserve Bank of New York said on Tuesday in a report that provides a snapshot of where household balance sheets stood before the coronavirus pandemic brought much of the economy to a halt.

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FTC Updates Congress on Efforts to Educate Consumers about Their FCRA Rights

The Federal Trade Commission has submitted a report to Congress updating lawmakers on the agency’s efforts to educate consumers about their rights to dispute and correct errors in their credit reports.

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NCUA’s Harper sends lawmakers new letter for CU relief

In a letter to Senate Banking Committee Chairman Mike Crapo R-Idaho, and Ranking Member Sherrod Brown, D-Ohio, NCUA Board Member Todd Harper has proposed several legislative opportunities to provide credit unions with relief during the coronavirus pandemic.

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Could COVID-19 Mean Lower Credit Card Limits?

Credit card issuers may be more likely to cut your credit line if you increase spending, have a subprime credit rating or use a hardship program to skip payments. But even those with decent credit could be at risk.

"If you start carrying more debt, credit card issuers become worried that you're in a financial crisis," says Beverly Harzog, bestselling author, credit card expert and consumer finance analyst at U.S. News. "Right now, that alone is understandable. But if you're also opening several new cards or getting personal loans, the issuer might cut your limit to decrease their own risk."

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Agencies are Cutting Access to Mortgage Data for Low-Income Borrowers

Two Urban Institute (UI) analysts have raised an alarm about changes to federal regulations that threaten to limit access to important data about the mortgage market and credit availability for low and moderate-income borrowers and communities. Most of the changes are coming through rulemaking at the Consumer Financial Protection Agency (CFPB) and relate to the Home Mortgage Disclosure Act (HMDA).

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Nearly 50 Million Cardholders Had Credit Limits Reduced, Card Closed Involuntarily in Last Month Due to COVID-19 Impact

CHARLOTTE, N.C., May 4, 2020 /PRNewswire/ -- One in four American credit cardholders said they've involuntarily had their credit limit slashed on at least one of their credit cards or even had a card closed by their issuer in the past 30 days, according to a new report from CompareCards.

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Governor Walz Signs Executive Order on COVID-19

[ST. PAUL, MN] — Governor Tim Walz today signed Executive Order 20-50, exempting federal, tribal, state, and local COVID-19 relief funds from being automatically intercepted by creditors and debt collectors.

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Legislative Update In The Debt Settlement Industry: Enacted And Proposed Legislation

In the past year new enacted and proposed legislation has developed within the debt settlement industry. Felix Shipkevich and Bianca Petcu, of Shipkevich PLLC recently hosted a webinar that detailed the new enacted and proposed legislation titled, Legislative Update in The Debt Settlement Industry: Enacted and Proposed Legislation. The webinar discussed the newly enacted legislation in Virginia and Texas, and the newly proposed legislation in Illinois, New Jersey, New York, and California. This article contains a summary of the legislative changes discussed during that webinar.

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Consumer debt hits new record of $14.3 trillion

Consumer debt hit a fresh record high to start 2020, even as credit card balances declined while Americans adjusted to the coronavirus pandemic. Household debt balances through March totaled $14.3 trillion, a 1.1% increase from the previous quarter and now $1.6 trillion clear of the previous nominal high of $12.7 trillion in the third quarter of 2008 during the financial crisis, according to New York Federal Reserve data released Tuesday.

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Credit card applications have dropped by 40% amid coronavirus—here’s when to apply for a new card

When consumers face economic hardship, opening a new credit card may be a helpful option to get by. But surprisingly, many Americans aren’t taking this approach during the global coronavirus pandemic. New credit card applications were down 40% from the first week of March to the last week, according to a new report from the Consumer Financial Protection Bureau’s (CFPB) Consumer Credit Panel.

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Banks have the biggest share of mortgages in forbearance

The overall share of home loans in forbearance rose to 7.54% in the last full week of April, from 6.99% in the prior week, with bank-based servicers holding the biggest slice. Mortgage servicers that were banks had 8.41% of their portfolios in forbearance in the April 20 to April 26 period, up from 7.87% in the prior week, the Mortgage Bankers Association said in a report on Monday. Independent servicers had 7.13% of their portfolios in forbearance, up from 6.52%, the report said.

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Credit Unions, CUSOs Fighting Fraudsters

“Credit unions across the country are on high alert for scammers looking to take advantage of members during the pandemic and are stepping up fraud prevention efforts as a result,” according to PYMNTS’ April Credit Union Tracker® done in collaboration with PSCU.  Detailing warnings recently issued by New York’s Sidney Federal Credit Union and the City of Boston Credit Union, among many others, credit union (CU) members are the target of cyberattackers posing as the Centers for Disease Control (CDC), the World Health Organization (WHO) and other legitimate organizations publicly associated with the pandemic response.

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Anti-Robocall Law Exemption Faces Test in Supreme Court Argument

The Supreme Court on Wednesday will hear argument as to whether automatic phone calls for government debt collection should be exempt from an anti-robocall law.

Businesses are hopeful the court will invalidate the law’s exemption for the debt calls—and then strike down the entire anti-robocall statue as unconstitutional.

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Working at home had a positive effect on productivity during the pandemic, survey says

Almost everyone seems to hate getting stuck in an office cubicle next to a co-worker who won’t shut up.  Bosses who call too many meetings can be even more annoying.  And traffic jams on the way home from work might be the worst way to cap the day after that.  So perhaps it’s not exactly shocking to learn that working from home during the COVID-19 pandemic has had a positive effect on workers’ productivity, according to 54% of respondents in a recent survey of professionals ages 18-74.

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D.C. joins states in getting student loan companies to provide relief amid pandemic

Nine states and the District have reached agreements with student loan companies to provide residents relief during the health crisis, offering a lifeline to millions of people with debt held by private outfits.

A dozen loan servicing companies, including Navient, Nelnet and Aspire, will let borrowers postpone their payments for three months without the threat of late fees or negative impacts on their credit ratings. The companies also will hold off on filing debt collection lawsuits during that time and help eligible borrowers enroll in payment plans tied to their income.

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Hospitals still aggressively collecting medical debt amid pandemic

Despite government shutdowns and increased economic hardship among Americans, hospitals are continuing to use aggressive tactics like garnishing wages to collect past-due medical debt, according to a report from ProPublica and MLK50: Justice Through Journalism.

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Americans are getting fewer robocalls because of the pandemic

(CNN Business)One of the biggest consumer headaches has eased up at least in part due to the pandemic.

The number of robocalls made to US phone numbers last month was the lowest in two years, according to new data provided to CNN Business from YouMail, a robocall-prevention service that tracks robocall traffic across the country. This includes both scam and legitimate calls, such as payment reminders from banks.

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Almost half of America is now carrying credit card debt, and more of it

Nearly half (47%) of U.S. adults, or about 120 million people, currently have credit card debt, up from 43% reported in early March, according to a new report from

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Coronavirus drives record number of complaints to consumer bureau

The Consumer Financial Protection Bureau (CFPB) received a record-breaking number of complaints about banks and lenders in April as millions of Americans struggle to navigate the economic toll of the coronavirus pandemic, the bureau's director said Friday.

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CFPB Report Shows Credit Applications Dropped Significantly in March 2020

According to a new report from the Consumer Financial Protection Bureau’s Consumer Credit Panel (“CCP”), consumer credit applications have dropped significantly since the onset of the COVID-19 pandemic.

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Coronavirus drives record number of complaints to consumer bureau

The Consumer Financial Protection Bureau (CFPB) received a record-breaking number of complaints about banks and lenders in April as millions of Americans struggle to navigate the economic toll of the coronavirus pandemic, the bureau's director said Friday.

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Consumer Financial Protection Bureau Report Shows Substantial Decline in Credit Applications in March

WASHINGTON, D.C. – A Consumer Financial Protection Bureau (Bureau) report examining the effects of the COVID-19 pandemic found that consumer credit applications declined substantially in March. Applications are measured by the number of credit pulls or “hard inquiries” that lenders perform when a consumer applies for new credit.

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Attorney General Becerra Urges Secretary Ben Carson to Further Protect Senior Homeowners with Reverse Mortgages Affected by COVID-19

SACRAMENTO – California Attorney General Xavier Becerra today, as part of a coalition of 26 attorneys general, sent a letter to U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson requesting further action to protect senior homeowners during the COVID-19 public health emergency. In today’s letter, the coalition argues that action is necessary so that senior homeowners who have a HUD-insured Home Equity Conversion Mortgage (HECM) – also known as a “reverse mortgage” – are given a fair opportunity to retain their home amidst the public health emergency.

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FTC to Co-Host Second Conference on Marketing and Consumer Protection on October 2

The Federal Trade Commission Bureau of Economics and the INFORMS Society for Marketing Science’s journal Marketing Science will co-organize the second FTC-Marketing Science Conference on Marketing and Consumer Protection on October 2, 2020 in Washington, D.C.

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CFPB makes more enhancements to consumer complaint database

WASHINGTON, D.C. -This week, the Consumer Financial Protection Bureau enhanced its consumer complaint database with the addition of a geospatial view. The CFPB explained consumers now will be able to view complaints by state with a U.S. map visualization. Previously, the regulator indicated consumers have been able to view complaints by using date, company name, key words and other filters. The bureau also has added new options, including the ability to:

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Wells Fargo to stop granting home equity lines amid uncertainty: sources

(Reuters) - Wells Fargo & Co, the largest U.S. mortgage lender, said on Thursday it will temporarily stop accepting applications for home equity loans given the economic uncertainty fueled by the COVID-19 pandemic. The suspension will stay in place until bank executives have better sense into what the economic recovery will look like, bank spokesman Tom Goyda said in a statement.

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NCUA chairman backs NAFCU’s call for CU CECL exemption

NCUA Chairman Rodney Hood Thursday called on the Financial Accounting Standards Board (FASB) to exempt credit unions from the current expected credit loss (CECL) standard. Since 2016, when the standard was issued, NAFCU has continuously urged FASB to exempt credit unions from the standard due to their unique capital framework and the negative impact the standard could have on the industry.

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Biggest U.S. banks says they submitted $45.8 billion in loans for emergency aid program

NEW YORK/WASHINGTON (Reuters) - The two largest U.S. banks, JPMorgan Chase & Co and Bank of America, said on Thursday that they submitted almost half a million applications worth nearly $46 billion to the Small Business Administration’s Paycheck Protection Program for small businesses hurt by the coronavirus shutdown.

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New SBA PPP, CFPB rules for CUs to be aware of

As credit unions work to secure paycheck protection program (PPP) loans for small businesses in their community and provide financial assistance for members impacted by the coronavirus pandemic, there are several new updates and resources for credit unions to be aware of.

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Governor Northam Announces Expansion of Payment Relief for Student Loan Borrowers

RICHMOND—Governor Ralph Northam today announced that Virginia has secured relief options for more than 200,000 Virginians with privately held student loans. The payment relief is the result of a new initiative by Virginia and several other states to work with the major private student loan servicers to expand on protections for federal student loan borrowers through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

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Wall Street uniform to get a new accessory – the face mask

HONG KONG/PARIS/LONDON (Reuters) - Face masks, temperature checks and packaged sandwiches could all become part of the daily routine for bankers as their employers work out how to get them safely back into the office.

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CFPB Paves Way for Consumers Facing Financial Emergencies to Obtain Access to Mortgage Credit More Quickly

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (Bureau) took steps to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic.  “The steps we are taking today will help consumers facing financial emergencies obtain access to mortgage credit faster,” said CFPB Director Kathleen L. Kraninger. “The pandemic is resulting in consumers facing various challenges, and our temporary and targeted solutions are intended to ensure that consumers receive the credit they need in a timely manner.”

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US consumer spending plunges record 7.5%, reflecting virus

WASHINGTON -- U.S. consumer spending plunged 7.5% in March, reflecting the growing impact of the coronavirus pandemic as Americans complied with stay-at-home orders.
The Commerce Department said that the spending decline was the sharpest monthly drop on records that go back to 1959, exceeding the previous record, a decline of 2.1% in January 1987.

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