At a glanceWednesday, July 08, 2020

Collection Industry News At A Glance - July 8, 2020
Wednesday July 8, 2020
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Supreme Court rules against law allowing debt-collection robocalls to cell phones

The US Supreme Court decided today that debt collectors can no longer make robocalls to cell phones (via Ars Technica). In doing so, the court has ruled that the prior provision to the law violated the First Amendment by favoring debt-collection speech over other kinds of speech. 

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Texas AG sues San Antonio-based student loan debt relief company after BBB investigation

AUSTIN - The Texas Attorney General's office has filed a lawsuit against a San Antonio-based student loan debt relief company after an extensive investigation by the Better Business Bureau into their business practices. The lawsuit against My Education Solutions (MES) says that the company has violated several Texas laws for allegedly failing to make timely payments on customer's student loans, exaggerating savings claims on its advertising, and charging consumers unfair monthly fees.

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CFPB makes it official, rescinds Cordray-era limits on payday lenders

The Consumer Financial Protection Bureau completed a rule gutting limits on payday lenders, delivering long-anticipated regulatory relief to the small-dollar lending industry. The final rule released Tuesday rescinds underwriting requirements that had been imposed in a 2017 regulation under former CFPB Director Richard Cordray. Eliminating the “ability to repay” standards has long been a policy goal of the Trump administration.

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A 6-point security checkup for working from everywhere

No one has ever seen a year like 2020. These are unprecedented times for all of us — individuals, families, and organizations alike.  As we continue adapting to the changing conditions, it is important for organizations to review the actions they have taken in response to the COVID-19 pandemic and assess the effects of those actions on the organization’s cybersecurity posture.

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Federal Appeals Court Blocks Lawsuit Over ‘Misleading’ Debt Collection Efforts

Two debtors are barred from suing a collection agency over allegedly "misleading" dunning letters because they were never actually deceived, a federal appeals court that covers three Southeastern states including Florida ruled in a split decision this week.

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True Accord Report Consumer Debt in the Age of COVID-19

In this report, we will discuss how U.S. consumers are engaging with their debts during this crisis,  including how payments and other behaviors have changed. Then, we’ll explore the steps companies can take to better service consumers while also driving revenue during these uncertain times.

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Capital One and other debt collectors are garnishing millions of Americans’ paychecks, in spite of COVID protections

Since 2018, Capital One has been a looming presence in Julio Lugo's life, ever since the company sued him, as it did 29,000 other New Yorkers that year, over an unpaid credit card. But when the coronavirus hit the city this March, it wasn't on his mind.

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Attorney General Becerra Leads Multistate Lawsuit Against Secretary DeVos’ Attempt to Siphon Pandemic Relief Funds Away from Public Schools

SACRAMENTO – California Attorney General Xavier Becerra and Michigan Attorney General Dana Nessel are today leading a coalition of six attorneys general in a lawsuit against U.S. Department of Education (Department) Secretary Betsy DeVos’ unlawful attempt to siphon pandemic relief funds away from K-12 public schools. The lawsuit follows the latest effort by Secretary DeVos to undermine congressional intent through the promulgation of regulations that unlawfully reinterpret the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and run counter to efforts to ensure that students and schools with demonstrated financial need get the resources they have been promised.

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CFPB Director Kraninger Announces Deputy Director; Additions to Executive Team

Washington, D.C. — Consumer Financial Protection Bureau Director Kathleen L. Kraninger today announced that Thomas Pahl will serve as the Deputy Director of the Bureau. Pahl has served as Policy Associate Director for Research, Markets, and Regulations since April 2018. Previously, Pahl was the Acting Director of the Bureau of Consumer Protection at the Federal Trade Commission.

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Consumer bureau revokes payday lending restrictions

The Consumer Financial Protection Bureau (CFPB) on Tuesday revoked rules that required lenders to ensure that potential customers could afford to pay the potentially staggering costs of short-term, high-interest payday loans.   The bureau released Tuesday the final revision to its 2017 rule on payday loans, formally gutting an initiative with roots in the Obama administration that was aimed at protecting vulnerable consumers from inescapable debt.

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Consumer Financial Protection Bureau Issues Final Rule on Small Dollar Lending

WASHINGTON, D.C. — The Consumer Financial Protection Bureau today issued a final rule concerning small dollar lending in order to maintain consumer access to credit and competition in the marketplace. The final rule rescinds the mandatory underwriting provisions of the 2017 rule after re-evaluating the legal and evidentiary bases for these provisions and finding them to be insufficient. The final rule does not rescind or alter the payments provisions of the 2017 rule.

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Deep Dive: How The COVID-19 Pandemic Is Moving SMB Lending, Disbursements Away From Paper Checks

The small- to medium-sized business (SMB) lending industry is used to adaptation, especially since the 2008 financial crisis, when legacy financial institutions (FIs) began pulling back and FinTechs and digital players stepped up in the space. The COVID-19 pandemic has rocked the industry, too, revitalizing the ongoing shift to digital as well as prompting a resurgence in the role of more established banks as prime SMB lenders.

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Supreme Court Prohibits Mobile Phone Robocalls To Collect Federal Debt

The Supreme Court ruled Monday that a 2015 law allowing federal debt collectors to make robocalls violates the Constitution. That's because those debt collectors were allowed to make automated calls while other groups weren't given the same treatment.

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PPP loans roughly in line with industry payrolls, but some stand out

(Reuters) - Paycheck Protection Program loans to restaurants and hotels fell short of their share of small-business employment, according to details on the program released Monday by the U.S. Treasury Department and the Small Business Administration.

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A Dark Day for Free Speech: Supreme Court Upholds Statute Supposedly Preventing Robocalls–But at what Cost?

In today’s Supreme Court decision of Barr v AAPC, however, the Supreme Court not only upheld the broadest restriction on Constitutionally-protected speech in our nation’s history, it did so in a manner that will help shut down future challenges to statutes that abridge speech–creating an entirely new First Amendment doctrine in the meantime. And that is a really big deal.

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SMB Alt-Lending Gears Up For Another Industry Shakeup

The level of market volatility hitting the U.S. and other nations around the world as a result of the global pandemic continues to draw comparisons to the 2008 financial crisis — so it’s only natural that analysts may turn to the past in an effort to predict what could lie ahead.

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Consumer Financial Protection Bureau Files Suit Against Loan Doctor and Edgar Radjabli for Deceptive Acts and Practices in Marketing a Savings CD Account

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today filed a lawsuit against My Loan Doctor LLC, a Delaware financial-services company operating in West Palm Beach, Florida and New York City and doing business as Loan Doctor (Loan Doctor), and its founder, Edgar Radjabli. The Bureau alleges that Loan Doctor and Radjabli made several false, misleading, and inaccurate marketing representations in advertising Loan Doctor’s “Healthcare Finance (HCF) Savings CD Account,” in violation of the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts or practices. As the Bureau’s complaint alleges, starting in August 2019, Loan Doctor took more than $15 million from at least 400 consumers who opened and deposited money into Loan Doctor’s deceptively advertised product.

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CFPB Announces Consumer Financial Protection Week, Virtual Events Nationwide

WASHINGTON - Today, the Consumer Financial Protection Bureau (Bureau) announced the launch of Consumer Financial Protection Week, which will take place from July 14, 2020, through July 17, 2020. Consumer Financial Protection Week will focus on how the Bureau is protecting consumers in the financial marketplace, the issues consumers are confronting, as well as informing consumers of how they can communicate to the Bureau any issues that they may have with a financial services provider.

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#HowTo Neutralize Wide-Area Network Cyber-Threats

Amid the many heartwarming stories to emerge during the COVID-19 pandemic about people, communities and businesses mobilizing to support one another and the public good, the global health crisis also has revealed a darker reality about the digitally-focused world we live in: that as soon as vulnerabilities are exposed, attempts to exploit them are sure to follow.

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Supreme Court Upholds Cellphone Robocall Ban

WASHINGTON (AP) — THE Supreme Court on Monday upheld a 1991 law that bars robocalls to cellphones.The case, argued by telephone in May because of the coronavirus pandemic, only arose after Congress in 2015 created an exception in the law that allows the automated calls for collection of government debt.

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Attorney General Becerra Secures $1.4 Million Judgment Against Southern California Telemarketers Scamming Vulnerable Investors

SACRAMENTO – California Attorney General Xavier Becerra today announced a more than $1.4 million judgment against Orange County, California based telemarketers who defrauded investors and timeshare owners of over $250,000. Property Protection Team, LLC (PPT) and four individuals, including owners Thomas S. White and Lacy Jae Treece, cheated more than 50 victims, many of them elderly, by collecting illegal advance fees for bogus “investment recovery” services.

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The rise in popularity of online banking in the last several years had already precipitated a downward trend in branch banking and had forced financial institutions to start adjusting their networks. The disruption caused by the global COVID-19 crisis did not cause the trend but has certainly accelerated it.

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CFPB Issues Rulemaking Agenda with October 2020 Deadline for Debt Collection Rules

The Consumer Financial Protection Bureau announced in its spring rulemaking agenda  issued this week that it expects to take final action on the proposed debt collection rules in October 2020.

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OCC report highlights elevated compliance risks in banking

In its spring “Semiannual Risk Perspective” report, the OCC found banks “face weak economic conditions resulting from the economic shutdown in response to the pandemic that will stress financial performance in 2020.” Among highlights from the report, the OCC noted that “compliance risk is elevated,” because of a combination of altered operations, employees working remotely, and several new federal and state programs designed to support consumers—such as the CARES Act, Paycheck Protection Program, and a variety of forbearance and deferred payment programs. “Among other challenges, these conditions complicate the compliance responsibilities associated with managing high volumes and various programs of consumer and business lending in a weakened economy,” the OCC said.

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CFPB, OCC Host Virtual Innovation Office Hours

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) today announced they will host joint, virtual Innovation Office Hours, July 29-30, as part of the American Consumer Financial Innovation Network (ACFIN). Participants will have the opportunity to discuss issues that touch upon both consumer protection and prudential regulation.

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Loans in coronavirus mortgage bailouts see largest weekly decline yet — but there are more red flags

The number of borrowers in government and private sector coronavirus-related mortgage bailouts just fell by the largest weekly volume since these plans were put in place. There are, however, warning signs that the programs could swell again.

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Enforcement of Calif. Data Privacy Law Begins

As consumers look ahead to the Independence Day weekend, businesses mark another milestone today: On Wednesday, enforcement of the California Consumer Privacy Act begins to rein in companies from playing fast and loose with consumer data.

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3 reasons to pay student loans in coronavirus forbearance

Since March, federal student loans have been put into forbearance through to Sept. 30 under the CARES Act, which has paused interest for borrowers who have been actively making payments. For individuals who have the funds to pay down debt can choose to save or spend their money elsewhere, however, there are some incentives for targeting student loans.

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So far Fed’s Main Street Lending program has made zero loans

WASHINGTON — Michael Haith, owner and CEO of a Denver-based restaurant chain called Teriyaki Madness, is in an unusual position for people like him: He's making money through food delivery and pickup and wants to borrow funds so he can expand.

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On December 13, 2018, the Commission released the Reassigned Numbers Database Order, establishing a database that will allow callers to determine whether a telephone number has been permanently disconnected after a date certain and therefore is no longer assigned to the party the caller
wants to reach. The Reassigned Numbers Database Order calls for the new rules adopted in that Order to become effective 30 days after the Commission publishes a notice in the Federal Register announcing approval of the new and modified information collection requirements by the Office of Management and Budget (OBM) under the Paperwork Reduction Act. 2.

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Consumer Financial Protection Bureau Issues Proposed Rule on Escrow Exemptions for Certain High-Priced Mortgage Loans

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today issued a notice of proposed rulemaking (NPRM) that would amend Regulation Z to provide a new exemption available to certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). In issuing the NPRM the Bureau has commenced its last mandatory rulemaking to implement the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

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The next cybersecurity headache: Employees know the rules but just don’t care

Cybersecurity has shot to the top of many IT leaders' priorities over the past few months as remote working became the de facto way of doing business. Yet despite more awareness of the security risks of working from home, employees are still showing a lax attitude when putting it into practice, according to new findings.

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Spring 2020 Rulemaking Agenda

The Bureau has published its Spring 2020 Agenda as part of the Spring 2020 Unified Agenda of Federal Regulatory and Deregulatory Actions, which is coordinated by the Office of Management and Budget under Executive Order 12866. The agenda lists the regulatory matters that we expect to focus on between May 1, 2020 and April 30, 2021.

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Judge orders Betsy DeVos to cancel 7,200 scammed borrowers’ student loans

During most of the Trump administration’s tenure, the U.S. Department of Education, led by Betsy DeVos, has worked to limit student debt cancellation for borrowers who say they were scammed by their schools. The agency scored a win in that effort Friday, when Democrats failed to muster enough votes to override President Trump’s veto of a bill that would have overturned the Department’s approach to student debt cancellation under what’s known as the “borrower defense” rule.

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Wells Fargo Hits Brakes on Student Loans Amid School Disruption

(Bloomberg) -- Wells Fargo & Co. is pulling back from student lending as the U.S. surge in coronavirus cases threatens to further disrupt higher education and the broader U.S. economy. The firm, which has been reviewing businesses under new Chief Executive Officer Charlie Scharf, said student loans for the upcoming academic year will be granted only to people who submitted applications before July 1 or to customers who already have an outstanding balance on a prior student loan from the bank.

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PPP Loans Aren’t for Everyone. Here’s What to Do if You Still Need Relief

Though countless Americans have been hurt financially in the course of our current recession, small businesses have perhaps been hammered the most. It's estimated that more than 100,000 have already closed their doors permanently since the COVID-19 pandemic began, and many more risk a similar fate if economic conditions don't quickly improve. Throughout all of this, the one thing that has helped many local businesses stay afloat is the Paycheck Protection Program, or PPP. Businesses that received PPP loans were eligible for funding equal to two-and-a-half times their monthly payroll costs. 

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Get ready for wave of small-business defaults, PNC’s Demchak warns

Banks are about to start feeling the economic pain caused by the global coronavirus pandemic, PNC Financial Services Group CEO William Demchak warned Wednesday. So far the damage has been minimal because consumers’ checking account balances have been propped up by government stimulus checks and reprieves from making mortgage, car and other monthly payments while the economy was on lockdown.

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Debt Settlement Market 2020 Estimated to Experience a Hike in Growth with National Debt Relief, Freedom Debt Relief, New Era Debt Solutions, Guardian Debt Relief

Debt Settlement Market 2026 evaluation of an enterprise is an important component for diverse stakeholders like traders, CEOs, buyers, providers, and others by IT Intelligence Markets. The Debt Settlement industry research record is an aid, which gives modern in addition to upcoming technical and economic details of the industry. Debt Settlement Market research file is an expert and in-depth take a look at the modern nation of this market. Diverse definitions and types of enterprise, programs of the enterprise and chain shape are given. The modern popularity of the Debt Settlement enterprise policies and the news is analysed.

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The man who paid off the student debt of 400 Morehouse College graduates has a new initiative to help borrowers

Last year, billionaire Robert Smith shocked roughly 400 graduates of Morehouse College (and the world) when he announced that he would pay off their student debt. Now, he’s back with an initiative he says will address the challenges Black student-loan borrowers face on a broader scale. Through a nonprofit, called the Student Freedom Initiative, Smith is aiming to “create a sustainable, pay-it-forward model,” for funding higher education, he told TIME in an interview.

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Five U.S. airlines reach deals with Treasury Department for billions in coronavirus loans

Five airlines have struck agreements with the Treasury Department for portions of $25 billion in federal loans aimed at softening the blow of the coronavirus pandemic on their businesses. American Airlines, Hawaiian Airlines, Sky West Airlines, Spirit Airlines and privately-held Frontier Airlines have signed letters of intent for the loan terms, the Treasury Department said Thursday.

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Phillips & Cohen Announces Vulnerable Customer Expansion Plans

Wilmington, DE – June 2020 – Phillips & Cohen Associates, Ltd., the leading specialist recoveries management business servicing creditors in the US, Canada, UK, Ireland, Australia, New Zealand, Spain, Portugal and Germany has announced plans to expand into the servicing of potentially vulnerable consumers.

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