At a glanceFriday, June 26, 2020

Collection Industry News At A Glance - June 26, 2020
Friday June 26, 2020
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Three of New York City’s New Language Access Rules for Debt Collection Can Apply to Creditors

On June 27, the City of New York’s new rules aimed at language access in debt collection become effective. I am often asked whether they apply to creditors as well. It appears that particular provisions of the new rules do cover creditors collecting their own debt.

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Washington state AG Bob Ferguson sues Renton-based debt collector over misleading letters

Washington state Attorney General Bob Ferguson filed a consumer-protection lawsuit against a Renton-based collection agency that he says tried to scare people into thinking they could be sued over old debt.   Letters sent to debtors by Convergent Outsourcing created the impression that Convergent could, and would, sue to collect, when it could not, according to the suit filed this week in King County Superior Court.

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Conforming data collection to cybersecurity industry regulations

“There are only two types of companies: those that have been hacked, and those that will be.” When former FBI Director Robert Mueller spoke those words in 2012, he sounded hyperbolic. Almost a decade later, it seems prophetic.

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Watchdog calls for fraud crackdown at small business lending program

Congress’ watchdog arm called on the Trump administration on Thursday to step up efforts to police the government’s massive small business rescue program after finding a significant risk of fraud and resistance to oversight at the agency running the bailout.

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Stop Seizing Paychecks, Senators Write to Capital One and Other Debt Collectors

The nation’s largest debt collectors should suspend seizing wages “immediately,” two prominent senators demanded in letters sent Wednesday.

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AG James Sues to Stop Trump Administration’s Illegal Elimination of Safeguards for College Students

NEW YORK – New York Attorney General Letitia James, as part of a coalition of 19 attorneys general from around the nation, today filed a lawsuit to stop the U.S. Department of Education and Education Secretary Betsy DeVos from repealing the “Gainful Employment” rule. The Gainful Employment rule provides critical protections for students considering enrolling in for-profit colleges and vocational schools and helps ensure these for-profit colleges and vocational schools “prepare students for gainful employment in a recognized occupation” following graduation.

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Education Department Revives Website That It Said Made Applying for Loan Forgiveness Too Easy

THE TRUMP administration is set to revive a website that the Education Department's Federal Student Aid office designed to help students who have been defrauded by their colleges apply for loan forgiveness – a decision made less than 24 hours after a whistleblower complaint surfaced, accusing a high-ranking department official of initially rejecting it on grounds that the tool made the process too easy.

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Over $100B in PPP loans left unclaimed in U.S. relief aid

Back in April, when the Small Business Administration was approving about $25 billion in coronavirus loans a day, lawmakers and companies were concerned that $669 billion in relief would run dry, leaving countless mom-and-pop businesses hanging. Yet the Paycheck Protection Program had more than $100 billion in funding left as of last Saturday, with only days remaining until the SBA stops taking new applications on June 30.

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FFIEC Announces Availability of 2019 Data on Mortgage Lending

WASHINGTON, D.C. – The Federal Financial Institutions Examination Council (FFIEC) today announced the availability of data on 2019 mortgage lending transactions at 5,508 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). Covered institutions include banks, savings associations, credit unions, and mortgage companies.

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Americans increase deposits as banks cut back on lending

U.S. banks are seeing deposits skyrocket and are pulling back on loans in the face of the coronavirus pandemic, newly released data from the Federal Reserve show. Why it matters: It's the latest sign of trouble for the banking sector and the economy — a signal that consumers and businesses aren't starting new projects or focusing on growth, and are instead socking away cash.

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Deadline to apply for PPP loan is Tuesday

The deadline to apply for federal relief through the Paycheck Protection Program is drawing near. Tuesday is the last day to apply for a PPP loanAccording to the Small Business Administration, there is still more than $128 billion available. “Funding isn’t going to be the issue,” said SBA regional administrator Jeremy Field. “But you might run up with other people who are really interested in getting that loan, who are also going to have the same bandwidth issue that everyone else will have.”

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U.S. to hit Japan-like levels of government debt by 2050, budget group says

The level of U.S. government red ink is set to explode to more than twice the size of the entire economy in three decades, according to a prominent anti-deficit group. The Committee for a Responsible Federal Budget, a bipartisan group that focuses on fiscal matters, issued its estimate in a report Wednesday that attempts to update the 10-year projections usually made by the Congressional Budget Office and the White House’s Office of Management and Budget.

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With the PPP Fintech Comes of Age

For the general population fintech has mostly flown under the radar. When it has popped up into the conversation of the day it was often for negative reasons. But the Paycheck Protection Program (PPP) has given fintech a national voice like never before.

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Think Twice Before Marketing with Robocalls

Sales and marketing professionals in companies are usually energetic, vivacious and creative. That’s what makes them so good at their jobs. But it’s also these excitable folks who can get companies in trouble when it comes to the Do Not Call List and the Truth in Caller ID Act.

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The Fed said it could supply the economy with $2.3 trillion. It hasn’t come close so far

When the coronavirus pandemic locked up capital markets and pulled the economy into recession, the Federal Reserve took aim with a $2.3 trillion bazooka to try to help. Thus far, though, the central bank has only fired off surprisingly few rounds.

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Upstart’s AI Lending Platform Expands to Auto Loans

SAN MATEO, Calif.June 24, 2020 /PRNewswire/ -- Upstart, a leading artificial intelligence (AI) lending platform, today announced support for auto loans as part of its consumer lending platform. With Upstart's new service, banks can offer refinance and purchase finance loans with a seamless digital experience, higher approvals, and potentially lower loss rates, all enabled by AI.  "Personal loans were the right first step for AI lending - now, we're expanding to auto", Dave Girouar, co-founder and CEO of Upstart.  "The days of randomly priced auto loans with confusing and laborious processes both for consumers and banks are nearing their end."  Upstart's new service eliminates the need for consumers to track down and enter their VIN or license plate number.  Banks no longer need to manage detailed paperwork including title transfer, lien placement, or payoff of the borrower's existing loan (in the case of refinance).

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PPP recipients can apply early for loan forgiveness, SBA says

New Paycheck Protection Program (PPP) guidance released Monday night declares that PPP recipients can apply for loan forgiveness early but that doing so could cost them money.

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Mastercard to buy technology firm Finicity in $825 million deal

(Reuters) - Mastercard Inc said on Tuesday it would buy Finicity in a deal valued at $825 million, adding a fintech firm that helps banks share customer data with other financial firms. The world’s second-largest payments processor also said Finicity’s existing shareholders can get an earn-out of up to an additional $160 million, if performance targets are met.

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Duluth, Georgia, June 24, 2020 — Crown Asset Management, LLC announced  today that it has hired Shawn P. Bradley as Director of Finance. Mr. Bradley was previously a Senior Director of Business Development for Ovation Partners, an Austin, TX based private credit fund. Prior to Ovation, Mr. Bradley spent nine years at CIBC Bank USA, as a Managing Director in the Specialty Finance Group, where he helped grow the loan portfolio to over $1 billion. He has extensive experience in distressed debt lending and capital markets. He holds both a BBA and MBA from Saint Xavier University where he also played intercollegiate football.

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Consumer Financial Protection Bureau Settles with Contract for Deed Companies for Engaging in Deceptive Acts and Practices and Violating Credit Reporting Rules

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (Bureau) settled with Harbour Portfolio Advisors, LLC (Harbour); National Asset Advisors, LLC (NAA); and National Asset Mortgage, LLC (NAM), companies that worked together to issue contracts for deeds to consumers. Under the terms of the contracts, consumers repaid a fixed principal over a term of years with interest. Harbour’s business plan was to acquire foreclosed properties in bulk, at auction, from entities such as Fannie Mae and Freddie Mac, and resell them to individual consumers. Harbour targeted potential buyers who were for the most part unable to obtain conventional financing and offered them financing through contracts for deed. 

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Contactless payments: The future is here

If contactless payments were once a solution in search of a problem — as skeptics long maintained — their moment has finally arrived. Before the pandemic, it wasn’t much of a hassle for most U.S. shoppers to insert a physical card and type a few buttons on a terminal. Sure, some early tech adopters embraced Apple Pay. But most of us were content to pay in ways that, while a bit slower, were familiar, consistent and reliable.

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Pandemic and protests: How the tumult of 2020 will forever change banking

A global pandemic. Economic free fall. Hundreds of billions of government relief funneled through banks. A reckoning over racism and inequality.  We will not be the same after this — and neither will banking.  The coronavirus crisis hit a hard reset button for nearly every aspect of life, including how people and businesses bank.  And soul-searching across America and beyond — touched off by a Minneapolis police officer's killing of George Floyd and the widespread civil unrest it sparked — is taking that hard reset to a deeper level.

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CFPB Issues Interim Final Rule on Loss Mitigation Options for Homeowners Recovering from Pandemic-Related Financial Hardships

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) issued today an interim final rule (IFR) that will make it easier for consumers to transition out of financial hardship caused by the COVID-19 pandemic and easier for mortgage servicers to assist those consumers.

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Supreme Court ruling in CFPB case could impact FHFA’s plan to end GSE conservatorship

The Consumer Financial Protection Bureau is under the microscope as the Supreme Court prepares to issue a major ruling, expected this week, on whether the agency’s single-director structure is constitutional. The decision is seen as also impacting the Federal Housing Finance Agency, which is set up in a similar way and has a challenge pending in court related to its structure. If the nation’s highest court rules in Seila Law v. the CFPB that the single-director structure is unconstitutional, it could impede the FHFA’s efforts to free Fannie Mae and Freddie Mac from government conservatorship, said Jaret Seiberg, managing director of Cowen Washington Research Group.

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CFPB Issues Interpretive Rule on Method for Determining Underserved Areas

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today issued an interpretive rule to provide guidance to creditors and other persons involved in the mortgage origination process about the way in which the Bureau determines which counties qualify as “underserved” for a given calendar year.

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5 cybersecurity considerations for getting back to work securely

As governments begin lifting emergency orders, company leaders are considering policies, technology and processes that will protect their workforces. Many of these factors rightly center around health and safety, but we must also acknowledge that all of us are still targets for cyberattacks. The new work-from-home world has poked countless holes in security perimeters, so organizations must prioritize cybersecurity preparation as well.

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Mortgage lending will surge to a 14-year high this year, MBA says

If you’re in the mortgage business, expect to have your busiest year in 2020 since the height of the housing bubble in 2006. Combined lending for home purchases and mortgage refinancings probably will total $2.65 trillion this year, the most since the $2.74 trillion seen 14 years ago, as low rates spur demand, according to Michael Fratantoni, chief economist of the Mortgage Bankers Association. The home-financing volume will be almost evenly split between purchases and refis, he said. About $1.3 trillion will be to finance home purchases and $1.35 trillion likely will be refinancings, Fratantoni said on Monday, speaking on a video conference sponsored by Moody’s.

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TransUnion Launches CreditVision Acute Relief Suite to Help Lenders and Insurers Identify and Support the 106 Million Accounts in Relief Programs

As millions of consumers continue to request and receive various payment accommodations, TransUnion (NYSE: TRU) today officially launched its CreditVision® Acute Relief Suite to assist lenders and insurers in supporting consumers while still managing risk within their portfolio.

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CFPB to eliminate DTI requirement from qualified mortgage standards

The Consumer Financial Protection Bureau announced Monday two notices of proposed rulemaking surrounding what’s commonly known as the QM Patch. One of those rulemakings would remove the debt-to-income requirement from qualified mortgages. Back in January, CFPB Director Kathy Kraninger sent a letter to several prominent members of Congress, saying the bureau has decided to propose an amendment to the QM Rule that would “move away” from DTI as a factor in mortgage underwriting.

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Consumer Financial Protection Bureau Takes Steps to Address GSE Patch

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today issued two Notices of Proposed Rulemaking (NPRMs) to address the impending expiration of the Government-Sponsored Enterprises Patch (GSE Patch). The GSE Patch is scheduled to expire in January 2021 or when the GSEs (Fannie Mae and Freddie Mac) exit conservatorship, whichever comes first.

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Coronavirus hardship loans: What they are, how they work and how to get one

With more than 40 million Americans filing for unemployment since the start of the coronavirus pandemic, increasing numbers are having trouble making ends meet. Whether it's for paying the mortgage, keeping the lights on or securing the next meal -- there are times when you need to drum up some cash.

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U.S. banks are ‘swimming in money’ as deposits increase by $2 trillion amid the coronavirus

A record $2 trillion surge in cash hit the deposit accounts of U.S. banks since the coronavirus first struck the U.S. in January, according to FDIC data. The wall of money flowing into banks has no precedent in history: in April alone, deposits grew by $865 billion, more than the previous record for an entire year.

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Hiring rose in 46 states in May yet jobless rates still high

WASHINGTON (AP) — Employers added jobs in 46 states last month, evidence that the U.S. economy’s surprise hiring gain in May was spread broadly across the country — in both states that began reopening their economies early and those that did so only later.  Unemployment rates fell in 38 states, rose in three and were largely unchanged in nine, the Labor Department said Friday. The disparities ranged from Nevada, with the highest rate (25.3%), Hawaii (22.6%) and Michigan (21.2%) to Nebraska (5.2%, the lowest) and Utah (8.5%). The overall U.S. unemployment rate in May was a still-high 13.3%, a decline from 14.7% in April.

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U.S. Home-Mortgage Delinquencies Reach Highest Level Since 2011

(Bloomberg) -- U.S. home-mortgage delinquencies climbed in May to the highest level since November 2011 as the pandemic’s toll on personal finances deepened.  The number of borrowers more than 30 days late swelled to 4.3 million, up 723,000 from the previous month, according to property information service Black Knight Inc. More than 8% of all U.S. mortgages were past due or in foreclosure.

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Visa Introduces Advanced Identity Score to Help Financial Institutions Prevent New Account Fraud

SAN FRANCISCO--(BUSINESS WIRE)--Visa Inc. (NYSE: V) today announced a digital tool to help U.S. financial institutions with their efforts to combat new account fraud – estimated at $10 billion a year – and give consumers greater peace of mind.

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FTC Sending Refund Checks Totaling More Than $8.7 Million to Consumers Defrauded by Deceptively Marketed Online “Risk-Free Trial” Offers

The Federal Trade Commission is mailing refunds totaling more than $8.7 million to 187,425 consumers who signed up online for “risk-free” trial offers, but were then charged full price and enrolled in expensive continuity plans without their knowledge. The refunds are the result of several orders settling the FTC’s allegations against San Diego-based Triangle Media Corporation and related defendants.

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Banking Giant HSBC To Cut 35,000 Jobs Amid Restructuring

British bank HSBC announced plans Tuesday to cut nearly 15% of its global workforce — some 35,000 jobs — and shed $100 billion in investments as it refocuses on growth markets in Asia.

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Remarks by Director Kraninger During Consumer Data Industry Association Webinar

Today I’d like to give you a high-level snapshot of what we are hearing directly from consumers through our consumer complaint process, and how we are helping consumers during this time and ensuring they have information on their rights, protections, and options. And, finally, I want to focus on the CARES Act and credit reporting, as well as the recent guidance from the Bureau on this topic.

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NACTT 55th Annual Seminar 2020 – Virtual

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July 08 - 11 , 2020

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