At a glanceWednesday, May 20, 2020

Collection Industry News At A Glance - May 20, 2020
Wednesday May 20, 2020
Mid Week Newsletter:
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Collections Face A New Reality

In the classic movie "The Wizard of Oz," Dorothy steps out of her house after experiencing a tremendous storm and says, "Toto, I've got a feeling we're not in Kansas anymore."  The same revelation applies to the collection industry, which has been weathering severe social and economic conditions.  As your collection organization emerges from the other side of this storm, you will be stepping into a dramatically altered collection environment.  Welcome to our new reality.  This changed environment represents a significant shift in how you engage in collections going forward and will require organizations to react, adapt, and engage quicker.  

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Attorney General Becerra Calls on Auto Manufacturers to Ensure Consumers Timely Vehicle Lease Returns During the COVID-19 Pandemic

SACRAMENTO – California Attorney General Xavier Becerra today, leading a coalition of 12 attorneys general, sent a letter to 10 major auto manufacturers addressing troubling reports that dealerships are engaging in predatory and harmful practices in connection with the return of leased vehicles amidst the COVID-19 pandemic. Today, the coalition calls on auto manufacturers to ensure that their financing arms and affiliated dealerships have proper controls in place to timely accept the returns of leased vehicles during the pandemic.

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In Letter to Fed and Treasury, Waters Presses for Emergency Lending Programs Not to Support Predatory Lenders

Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, sent a letter to Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, and Steven Mnuchin, Secretary of the U.S. Department of the Treasury, following up on conversations to ensure that the Federal Reserve and Treasury programs and facilities to respond to the COVID-19 crisis do not support predatory lenders.

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California Bill Would Require Mortgage, Auto and PACE Forbearances and Restrict Payday Lending COVID-19 Update May 13, 2020

Through an amendment to Assembly Bill 2501, California Assembly Banking and Finance Chair Monique Limon has introduced sweeping forbearance legislation that would impact single-family and multifamily mortgages, auto-secured financing, Property Assessed Clean Energy (PACE) financing, and payday loans. Named the COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020, the bill provides for mandatory long-term forbearances; prohibitions on foreclosures, evictions and repossessions; and mandatory payment plans and fee restrictions on payday loans. The bill would take immediate effect and continue in force until 180 days after the Governor declares that the emergency related to COVID-19 has ended.

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Over 4 million Americans are now skipping their mortgage payments

Fewer Americans are calling their mortgage servicers to ask for relief from mortgage payments, but the housing industry isn’t out of the woods yet.  More than 4.1 million homeowners are in forbearance plans now, according to the latest data from the Mortgage Bankers Association.

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FTC warns of coronavirus contact-tracing text scams

The Federal Trade Commission on Tuesday warned the public about scammers taking advantage of contact tracing to steal your information. Contact tracers are generally hired by a state's department of public health. If a tracer contacts you, they won't ask for personal information. If the person contacting you is asking for money or sensitive information like your Social Security number, bank account or credit card number, it's a scam. 

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Coronavirus hammers U.S. homebuilding; permits tumble

WASHINGTON (Reuters) - U.S. homebuilding dropped by the most on record in April and permits for future construction tumbled, underlining fears that the coronavirus crisis would lead to the deepest economic contraction in the second quarter since the Great Depression.

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Santander agrees to $550 million U.S. settlement over subprime auto loans

WASHINGTON (Reuters) - Santander Consumer USA Holdings Inc said on Tuesday it had agreed to make changes to its underwriting practices as part of a $550 million settlement with 33 states and the District of Columbia over subprime auto loans. The states said Santander violated consumer protection laws by placing borrowers with subprime credit into auto loans it knew carried a high probability of default. Santander has agreed to pay $65 million for restitution for some customers and to waive deficiency balances on loans worth $478 million. It will also pay $7 million to the states to manage restitution claims.

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Attorney General Becerra Announces Over $550 Million Settlement Against Nation’s Largest Subprime Auto Financing Company for Deceptive Auto Loan Practices

SACRAMENTO – California Attorney General Xavier Becerra today, along with a coalition of 33 other attorneys general, announced a multistate settlement with Santander Consumer USA Inc. (Santander) that includes over $550 million in nationwide relief for consumers; California consumers will receive over $99 million of that amount. The settlement resolves allegations that Santander violated consumer protection laws by placing borrowers with subprime credit into auto loans it knew carried an unacceptably high probability of default. Santander has also agreed to injunctive terms that make important changes to its underwriting practices, which is especially important as the nation faces the economic fallout from the COVID-19 pandemic.

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CFPB to Provide Additional Extension of Comment Period for Supplemental Notice of Proposed Rulemaking on Time Barred Debt

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) announced today that it will provide an additional 60 days for the public to comment on its Supplemental Notice of Proposed Rulemaking (NPRM) on time-barred debt disclosures. The extension is intended to allow all interested parties with additional time to comment on the rulemaking as a result of the impact of the COVID-19 pandemic. The deadline was June 5, 2020; the comment period will now close on August 4, 2020.

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Mortgage regulator to loosen refinance restrictions for home loans in forbearance

The Federal Housing Finance Agency is making it easier to refinance your mortgage after being in forbearance. Fannie Mae FNMA, +5.35% and Freddie Mac FMCC, +4.96% have issued temporary guidance stipulating that borrowers will be eligible to refinance or buy a new home if they are in a forbearance agreement, but are also current on their mortgage, the FHFA said Tuesday. In other words, if a family has been granted the ability to skip mortgage payments, but continued to make them or reinstated their loan, they can get a new home loan.

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Media Advisory: CFPB Releases Video on Consumers Receiving Stimulus Payment on Prepaid Debit Card

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) released a video to inform consumers that they may receive their Economic Impact Payment (EIP) on a prepaid debit card starting this week. The payments, to provide relief as a result of the COVID-19 pandemic, are made possible by the CARES Act.

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Due to the economic impact of the COVID-19 health emergency, some Maryland-licensed collection agencies may decide to voluntarily cease business operations in the State. Whether such a decision results in disruptions to agency’s business operations that are temporary or permanent, the State Collection Agency Licensing Board (“the Board”) expects collection agencies to manage such disruptions in compliance with their respective business continuity plans and otherwise wind down operations in an orderly manner so as to protect consumers from unnecessary harm, especially when transferring consumer claims to other parties.

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Powell, Mnuchin to face Senate grilling on U.S. coronavirus response

WASHINGTON (Reuters) - The U.S. government’s handling of its massive economic response to the coronavirus pandemic will come under scrutiny on Tuesday as Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell testify before the Senate Banking Committee.

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5 ways the CFPB has eased industry’s coronavirus burden

The Consumer Financial Protection Bureau’s response to the coronavirus pandemic has included relaxing or eliminating rules so financial institutions can focus on aiding consumers. Continuing a regulatory relief focus for the agency that preceded the crisis, CFPB Director Kathy Kraninger said in March that the agency planned to deliver “temporary and targeted regulatory flexibility” to financial firms.

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FTC and SBA Warn Operator of and Lead Generator Lendio to Stop Potentially Misleading Coronavirus Relief Loan Marketing

The Federal Trade Commission and Small Business Administration (SBA) sent warning letters to two companies that may be misleading small businesses seeking SBA loans as a result of the coronavirus pandemic.   The letters are being sent to ITMedia Solutions, LLC (IT Media) and Lendio, Inc. (Lendio), whose marketing could lead consumers to believe they are affiliated with the SBA, or that consumers can apply on their site for loans through the Paycheck Protection Program (PPP) or other programs authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

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SMBs Could Get More Flexibility To Use PPP Loans

The rules surrounding small business loans from the Paycheck Protection Program (PPP) are being overhauled as demand cools and small and medium-sized business (SMBs) owners voice complaints that the money is hard to get. “When we conceived the program, we thought businesses would be able to get up and running after eight weeks, but we know now that’s not the case,” Sen. Ben Cardin (D-Maryland) said in a statement, according to a Wall Street Journal (WSJ) report on Sunday (May 17).

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Cyber Security Expert Predicts Remote Working Will Worst Cyber Attack In History This Year

In a new column in Forbes, he predicts that the attack will come sometime in the next six months. In his report, McBride gives some tips on best practices to keep your network safe, but most of the damage will be done to government and corporate networks, not personal computers. Still, it is always good to practice proper cybersecurity with all of your home and work devices. 

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SBA releases coronavirus PPP loan forgiveness application

The Small Business Administration and Treasury Department on Friday released the application for business owners to fill out in order to have their Paycheck Protection Program loans forgiven.
The borrower is expected to complete the application and submit it to their lender, who will ultimately be responsible for assessing forgiveness. The process can be completed electronically.

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Eviction proceedings and debt collections can resume this month, Texas Supreme Court orders

Evictions and debt collection proceedings can resume in Texas next week, the Texas Supreme Court has ordered, after the court temporarily put both on hold during the coronavirus pandemic.
Eviction hearings can be held as soon as May 19, with orders authorizing evictions allowed starting May 26. That does not apply to certain tenants who are protected through the federal Coronavirus Aid, Relief and Economic Security Act, including renters in homes covered by federally backed mortgages.

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Student loan borrowers are paying a ‘secret price’ on other loans, study details

Carrying student loan debt can affect how much a consumer pays in interest for other financial products, such as mortgages and credit cards, according to a new report.  The report from the Student Borrower Protection Center (SBPC) found that “even borrowers who can afford their monthly student loan payment are paying an additional secret price on other credit products.”

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FTC Obtains Final Order against Do Not Call Violator, Banning Him From Nearly All Outbound Telemarketing

At the Federal Trade Commission’s request, a federal court has approved a final order against Jasjit “Jay” Gotra, the founder and CEO of Alliance Security Inc. (Alliance), which the agency charged in 2018 with causing more than one million calls to numbers on the National Do Not Call (DNC) Registry. The complaint also alleged that Alliance performed illegal credit inquiries on unsuspecting potential customers.

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Exclusive: U.S. Justice Dept. subpoenas Wall Street banks for small business loans info – sources

WASHINGTON (Reuters) - The U.S. Justice Department has sent grand jury subpoenas to big banks seeking records as part of a broader investigation into potential abuse of a $660 billion emergency loan program to help small businesses hurt by the novel coronavirus, two people with knowledge of the matter told Reuters.

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MN Commerce Department Issues Guidance

"The Commissioner recognizes that because of the concern surrounding the COVID-19 outbreak, and in light of the Governor’s Executive Orders, individual collectors should be working from home temporarily to protect themselves and others, even though their home location is not currently licensed as a branch office.  As such, the Department will not take action against any licensee who allows their individual registered collectors to temporarily work from home as a precautionary measure and pursuant to Governor Walz’s Executive Orders. "  The Department provides four points of criteria for licensees to follow.  Important read!

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Eviction proceedings and debt collections can resume this month, Texas Supreme Court orders

Evictions and debt collection proceedings can resume in Texas next week, the Texas Supreme Court has ordered, after the court temporarily put both on hold during the coronavirus pandemic.

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U.S. Outlook: Cybersecurity Legal Implications For Businesses Amid New Coronavirus Outbreak

Among the myriad challenges faced by businesses arising out of the global COVID-19 pandemic is the amplification of cybersecurity vulnerabilities and resulting increased risk of data breach and malware incidents. Throughout the world, employees are working from home via remote access technology and on personal devices, giving rise to unprecedented and likely unanticipated cybersecurity risks. Compounding this effect, malicious actors are out in force, preying upon the system and human insecurities created by the current COVID-19 climate.

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The most recent report on AFCC Debt Settlement Market issued by DecisionDatabases, numerous aspects of the current market scenario has been taken into consideration and a concise analysis has been put together to bring you with a study that has pre and post COVID analysis. It is essential to address the current outbreak of COVID-19 in the current market scenario. The complete shutdown in many parts of the globe has directly or indirectly has been impacted included supply chain operations, new product development, and other activities. Our team of an analyst is watching continuously the market movement and offers real-time analysis regarding growth, decline, and opportunities which help you to make a fruitful decision for your businesses.

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7-Year No-Interest Loans: What It Takes To Sell Cars In A Pandemic

Unemployment is mounting. The economy keeps falling deeper into a recession — or worse. The coronavirus continues to spread. But car sales surprisingly are climbing. Auto sales tanked in March — to 80% below their expected levels. And they remain well below normal. But while much of the economy continues its free fall, car sales have been on the rise for six straight weeks, according to data from J.D. Power, a marketing data and analytics company.

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Consumer Financial Protection Bureau Settles with Monster Loans, Thomas Chou, Sean Cowell, and Related Companies

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (Bureau) today filed a proposed stipulated final judgment to resolve its allegations in its lawsuit against California mortgage lender Chou Team Realty, LLC, which does business as Monster Loans (Monster Loans), and several individuals and related companies, including Thomas Chou and Sean Cowell. The Bureau alleged that Chou and Cowell were among the leaders of a scheme to use Monster Loans’ account with a major credit bureau to unlawfully obtain consumer reports for their associated student loan debt-relief companies, which in turn used the consumer reports to deceptively market their services nationwide and then charged consumers illegal fees.

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Firms that took a PPP loan under $2 million are about to get a break

Business owners who borrowed less than $2 million from the Paycheck Protection Program can breathe a little easier: They likely won’t face an audit from federal authorities. The PPP — a forgivable loan program that allows small businesses to cover up to eight weeks of payroll costs, mortgage interest and other expenses — was refilled to the tune of $310 billion on April 27 to help employers keep workers on board.

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Jones calls for investigation into repeal of federal payday lending rule

Wednesday, U.S. Senator Doug Jones (D-Alabama) sent a letter calling for Federal Reserve Board Inspector General Mark Bialek to open an investigation into the Consumer Financial Protection Bureau’s (CFPB) repeal of the Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule (Payday Rule).

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North Carolina Senate General Assembly Has Proposed, Though Not Yet Introduced, The “Modernize Debt Settlement Prohibition” Bill

We have been alerted that the North Carolina Senate General Assembly has begun debating a proposed bill to amend Article 56 of Chapter 14 of the North Carolina General Statutes to be recodified as Article 9 of Chapter 75 of the General Statutes. The proposed bill is currently still considered a draft and has not been officially introduced, given a bill number, or sponsored by a North Carolina Assemblyperson.

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Going virtual with your financial consultations during the Coronavirus emergency

As financial coaches, counselors, and educators, you provide vital services to Americans facing uncertainty as the coronavirus pandemic unfolds. You can continue this vital effort by adapting to working with those you serve remotely.

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U.S. Treasury, small-business agency grant leeway to smaller PPP loan borrowers

WASHINGTON (Reuters) - The U.S. Treasury and Small Business Administration clarified Wednesday that businesses that seek less than $2 million in emergency relief under the Paycheck Protection Program (PPP) will be considered qualified unless proven otherwise.

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Consumer Financial Protection Bureau Outlines Responsibilities of Financial Firms During Pandemic

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (Bureau) today released a statement and FAQs outlining the responsibility of certain financial firms during the pandemic. In the statement, the Bureau outlines the billing error responsibilities of credit card issuers and other open-end non-home secured creditors during the COVID-19 pandemic.

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FTC Files Complaint Alleging Telemarketers and Debt Collectors Worked Together To Bilk Organizations for Subscriptions and Books They Never Ordered

The Federal Trade Commission sued the operators of a Pennsylvania-based telemarketing scheme, alleging that they charged organizations such as businesses, schools, fire and police departments, and non-profits for books and newsletter subscriptions they never ordered.   The FTC’s complaint also names the defendants behind a New York-based debt collection operation, alleging that they illegally threatened the organizations if they failed to pay for the unordered merchandise.

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CFPB to Offer Flexibility for Creditors Working to Resolve Billing Errors During Pandemic

The Consumer Financial Protection Bureau today said it would provide flexibility for creditors to resolve billing errors during the coronavirus pandemic. With many merchants forced to close due to local stay-at-home orders, the bureau acknowledged that these businesses may not be able to respond immediately to creditor inquiries to resolve billing disputes.

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Industry Events


Receivables Management Association International

The Lodge at Spruce Peak
July 28 - 30 , 2020

Digital Banking 2020

American Banker

Austin Convention Center 500 East Cesar Chavez Street
Austin , TX
June 08 - 10 , 2020

(212) 803-8456

NACTT 55th Annual Seminar 2020

National Association of Chapter 13 Trustees (NACTT)

Marriott Marquis San Diego Marina 333 West Harbor Drive San Diego, CA 92101
San Diego , CA
July 08 - 11 , 2020

800-445-8629 | 803-765-0860

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


LendIt Fintech USA

Save 15% with our Discount Code: DC15%

Javits Center, New York
New York
September 30 - October 01 , 2020

LendIt Fintech Europe 2020

LendIt Fintech Europe

Hilton London Angel Islington 53 Upper Street
London , N1 0UY, UK
October 19 - 20 , 2020


Auto Finance Summit 2020

Royal Media

Wynn Las Vegas
3131 S Las Vegas Blvd , Las Vegas, NV 89109
October 20 - 22 , 2020

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