Consumer Financial Protection Week: Conducting supervisory and enforcement work during a pandemic

This is a discussion about the Bureau’s prioritized assessment approach and how the Bureau is monitoring markets and institutions that may pose the greatest risk of consumer harm as a result of pandemic-related issues.

Microsoft warns of critical Windows DNS Server vulnerability that’s ‘wormable’

Microsoft is warning of a 17-year-old critical Windows DNS Server vulnerability that the company has classified as “wormable.” Such a flaw could allow attackers to create special malware that remotely executes code on Windows servers and creates malicious DNS queries that could even eventually lead to a company’s infrastructure being breached.

US banks warn of much more economic pain ahead

London (CNN Business)The biggest US banks are setting aside billions of dollars to deal with toxic loans as support from the government falls off in the months ahead, a sign that some of the worst economic damage from the pandemic is still to come. What’s happening: JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) said Tuesday that they earmarked nearly $28 billion to cover credit losses last quarter, wiping out a huge chunk of profits made between April and June.

CFPB Publishes Blog Post On Providing Adverse Action Notices When Using Artificial Intelligence/Machine Learning Models

The CFPB recently published a blog post titled, “Innovation spotlight: Providing adverse action notices when using AI/ML models.”   The blog post primarily recycles information from the Bureau’s annual fair lending report issued in May 2020.  The Bureau indicates that artificial intelligence (AI) and a subset of AI, machine learning (ML), is an area of innovation that it is monitoring.

Financially Fit? Comparing the credit records of young servicemembers and civilians

Financial well-being, including credit history, is an important consideration in an individual’s ability to join the military as well as his or her ability to maintain a security clearance and continue in military service. This report uses a representative sample of young servicemembers’ credit reports to show how their credit histories evolve from the time they turn 18 until their mid-twenties. It also compares servicemembers to a cohort of same-age civilians.

Major banks are hauling in ‘big fees’ from debt and equity underwriting during the coronavirus crisis

Cash might be king during a crisis. But for top investment banks helping the Federal Reserve do “whatever it takes” to keep credit flowing during the pandemic, the ace in the hole has been capital markets fees. Take JPMorgan, Chase & Co. JPM, +1.00%, which recorded a chart-busting $33.8 billion of revenue for the second-quarter on Tuesday, despite the coronavirus recession, and a 54% jump in investment banking fees from a year ago.

Wells Fargo buys $14B of delinquent mortgages tied to pandemic

Wells Fargo has purchased $14 billion of delinquent government-backed mortgages this month, leading the pack among servicers beginning to feel the balance-sheet pinch of the coronavirus pandemic.

Phillips & Cohen Associates Adds No-Cost Opportunity Scrub℠ To Its Debt Settlement Solutions Platform

Wilmington, DE – July 2020 – Phillips & Cohen Associates, Ltd. (PCA) is excited to announce a critical enhancement to its Debt Settlement Solutions Platform with Opportunity Scrub℠. The newly branded, no-cost feature helps creditors and debt buyers identify, evaluate and optimize debt settlement account value within their portfolios. Known globally for its award-winning decedent debt and estate servicing, Phillips & Cohen Associates has been a leader in the US debt settlement arena for over 20 years. In line with its ongoing commitment to innovate in this growing industry segment, Phillips & Cohen Associates has created one of the nation’s largest repositories for identifying consumers engaged in a debt settlement program. Opportunity Scrub℠ will quickly and securely enable clients to scrub up to 50 million of their accounts at no cost to identify the true impact of the debt settlement segment of their portfolios.

More Than 50% of Debt Collection Agencies Thrived Under COVID-19

SUNNYVALE, Calif., July 14, 2020 /PRNewswire/ -- Over half the collection agencies surveyed not only thrived during the pandemic, but actually outperformed their pre-pandemic metrics in a nationwide survey conducted by Prodigal Technologies, Inc.

FTC Sends More Than $16 Million in Refunds to Victims of Bogus Debt Relief Operation

The Federal Trade Commission is sending more than $16 million to individuals who lost money to a debt relief scam that targeted tens of thousands of consumers facing financial difficulty.

VA Partially Suspends Debt Collections on Veterans Through End of Year

The Department of Veterans Affairs has announced the partial suspension of debt collections against veterans through the end of the year to provide financial relief during the COVID-19 pandemic. In a June 10 news release, the VA said it was suspending all actions against veterans to the end of 2020 where responsibility for the collection of money owed has passed from the VA to the Treasury Department.

‘We Still Face Much Uncertainty’: Pandemic Hammers Big Banks

The dramatic collapse of the U.S. economy from the coronavirus is pummeling America's largest banks. Wells Fargo lost $2.4 billion in the second quarter — its first quarterly loss since 2008 during the financial crisis — and said it expects to cut its dividend. Citigroup saw its profit drop 73% in the quarter.

Banks earnings reflect massive hit from coronavirus, but show importance of regulations

Rock-bottom interest rates and preparations for a spike in loan defaults are hitting big banks, which are widely expected to turn in the worst quarterly numbers since the financial crisis this week. JPMorgan Chase, the nation's biggest bank in terms of assets, was the first major lender to report its latest earnings early on Tuesday, setting aside $8.9 billion for expected losses but posting better-than-expected income of $4.69 billion.

RMAI Applauds CFPB Consumer Financial Protection Week

July 13, 2020: On July 14, 2020 through July 17, 2020, the Consumer Financial Protection Bureau (CFPB or Bureau) will host a series of events in connection with its launch of Consumer Financial Protection Week. The week’s events focus on how the Bureau protects consumers in the financial marketplace, issues consumers confront, as well as how consumers can communicate to the Bureau any issues that they may have with a financial services provider.

Maybe the FTC Can’t Take That to the Bank: The Supreme Court’s Decision in Liu v. SEC and Its Implications for the FTC’s Ability to Seek Equitable Monetary Relief

On July 9, 2020, the U.S. Supreme Court granted petitions for certiorari in FTC v. Credit Bureau Center and AMG Capital Management, LLC v. FTC, cases that question the Federal Trade Commission’s authority to demand equitable monetary relief such as restitution and disgorgement under Section 13(b) of the FTC Act, which expressly authorizes courts to issue “injunction[s]”  without express reference to equitable monetary relief. The Court’s decision in these cases will have sweeping ramifications for the FTC, which has referred to its efforts to obtain disgorgement under Section 13(b) of the FTC Act as “a cornerstone of the FTC’s enforcement program for more than 30 years.”^[1]

Consumer Financial Protection Week

A week of virtual events on July 14–17, 2020, will focus on how the Bureau is protecting consumers in the financial marketplace.  Events will cover the issues consumers are confronting, as well how consumers can communicate to the Bureau any issues that they may have with a financial services provider

Companies are taking on another $1 trillion in debt

London (CNN Business)Powered by ultra-low interest rates, corporate borrowing was already at an-all time high before the pandemic. Now, as cash-strapped companies frantically try to shore up their balance sheets, debts are expected to get even bigger. What’s happening: Corporate debt is poised to soar to a new record in 2020, Janus Henderson said in a report Monday. The asset manager, which analyzed 900 companies from around the world, said net borrowing could increase by as much as $1 trillion this year over 2019, when it surged to $8.3 trillion.

CFPB Study Shows Financial Product Could Help Consumers Build Credit

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (Bureau) today released a report indicating that a credit builder loan could increase the likelihood of establishing a credit record for consumers without one, and could help improve the credit scores of those with no current outstanding debt. 

Verifacts, LLC. Volunteers at Sauk Valley Foodbank

VeriFacts, LLC recently volunteered at the Sauk Valley Foodbank in Sterling, IL to help feed hundreds of local families who are facing food insecurity.  While VeriFacts has been tackling the challenges of being a small business during the COVID-19 pandemic, food banks have been battling not just the increased demand for meals, but also a drop in the number of volunteers. To support families from the local community who are also hurting during these times, the VeriFacts team volunteered at the Sauk Valley Foodbank to package 300 boxes of food.

FTC Launches New Online Tool for Exploring Military Consumer Data

The Federal Trade Commission launched a new tool that explores data about problems military consumers may experience in the marketplace. For the first time, data about reports the FTC has received from active duty service members and veterans will be available online in an interactive dashboard at ftc.gov/explore data.

OCC Tells Banks Not To Hide Under The Cover Of COVID

The nation’s banks hoping to use COVID-19 as an excuse to shutter branches or get permanent concessions from regulators better think again, the Financial Times reported. Brian Brooks, Acting Comptroller of the Currency, an independent agency within the U.S. Department of Treasury, told the newspaper he was not prepared to revisit the fundamentals of bank regulations as a result of the pandemic.  He said rules governing branch closures will stay and bank executives should not expect temporary waivers to continue indefinitely.

DCS2020 September 15-17, 2020 – Cancelled

Resource Management Services, Inc. announces the cancellation of the Debt Connection Symposium & Expo originally scheduled for September 15-17, 2020 at the Red Rock Hotel.  

Our next event is the Collection and Recovery Solutions 2021 conference at the Four Seasons in Las Vegas, to be held May 12-14, 2021.  More details will follow later in the year.

SBA says there’s no more money for emergency loan advances to small businesses

Prepare for Artificial Intelligence to Produce Less Wizardry

EARLY LAST YEAR, a large European supermarket chain deployed artificial intelligence to predict what customers would buy each day at different stores, to help keep shelves stocked while reducing costly spoilage of goods. The company already used purchasing data and a simple statistical method to predict sales. With deep learning, a technique that has helped produce spectacular AI advances in recent years—as well as additional data, including local weather, traffic conditions, and competitors’ actions—the company cut the number of errors by three-quarters. It was precisely the kind of high-impact, cost-saving effect that people expect from AI. But there was a huge catch: The new algorithm required so much computation that the company chose not to use it.

How Growing Businesses Should Tackle Cybersecurity Challenges

When we think about the most public cyber attacks and data breaches, we generally associate them with large enterprises. The truth is cyber attacks are not limited by company size. A significant cyber attack can happen to any company, in any industry and of any size.

CFPB Releases Report on Debt Settlements and Credit Counseling

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) released a report today examining recent trends in debt settlement and credit counseling. Many Americans struggle with their debts, especially during times of crisis. Today’s report documents changes over time in how consumers have used these debt relief options for unsecured debt.

Social engineering hacks weaken cyber security during the pandemic

Every aspect of the Covid-19 crisis has been exploited by opportunistic hackers, terrorists, and other criminals. In addition to capitalising on rampant fear, uncertainty, and doubt, attackers are targeting a fresh new honeypot of federal aid, in the form of payouts from unemployment checks, stimulus checks, and the Paycheck Protection Program.

Supreme Court protects TCPA, surgically severing government-debt-collection exception rather than nullifying entire Act

Two months to the day after closely-watched oral argument,¹ Justice Brett Kavanaugh on Monday, July 6, 2020, handed down the Supreme Court’s opinion in Barr v. American Association of Political Consultants, Inc., et al. striking and severing the government-debt exception to the Telephone Consumer Protection Act (TCPA or the Act), which exception he characterized as “about as content-based as it gets.” ² 47 U.S.C.A. § 227(b)(1)(A)(iii). Because the government conceded at oral argument that the government-debt exception could not pass muster under strict scrutiny, the Court necessarily found that the exception imposed an unconstitutional content-based speech restriction in violation of the First Amendment.

California Bill to Establish Nation’s Second Public Bank Applauded as ‘Historic Challenge to Wall Street Domination’

In a move advocacy groups celebrated as a "historic challenge to Wall Street domination of municipal finances," a pair of California state lawmakers on Thursday unveiled legislation that would establish the nation's second publicly-owned bank and empower the institution to lend to businesses and local governments fighting to stay afloat amid the Covid-19 pandemic.

FTC to Host Virtual Workshop July 13 on Proposed Changes to Safeguards Rule

The Federal Trade Commission will host a virtual workshop to seek input on proposed changes to the Gramm-Leach-Bliley Act’s Safeguards Rule, which requires financial institutions to develop, implement, and maintain a comprehensive information security program.

Chicago Ticketing Enforcement, Debt Collection Returning to Normal

The city of Chicago's ticketing enforcement and debt collection practices will begin returning to normal Wednesday with the start of the new month, officials say.

Wells Fargo pledges $400 million in support of small business after PPP payout

(Reuters) - Wells Fargo & Co (WFC.N) will donate over $400 million toward helping small businesses recover from the coronavirus pandemic, giving away all proceeds from its participation in the Payroll Protection Program.  At least $28 million is earmarked for non-profit community lenders catering to Black entrepreneurs, the bank said.  “The hardest hit business in this are minority owned,” president of consumer banking Mary Mack said in an interview.

Fintech disruptor SoFi wants to become a national bank — again

Fintech company SoFi has filed an application for a national bank charter with the Office of the Comptroller of the Currency (OCC), according to a report from Business Insider citing a company-wide email it reviewed. In that email, CEO Anthony Noto said that the personal finance start-up “thought long and hard about embarking on this path, and are proud of what we have accomplished in the last 2+ years to position ourselves to take this next critical strategic step in our development.”

Interplay of Main Street Lending Program Documents: the Rights and Role of the Main Street

The $600 billion Main Street Loan program has been highly anticipated to provide financial support in the form of loans to small and medium-sized U.S. businesses affected by the COVID-19 pandemic. The Federal Reserve Bank of Boston that is administering the Main Street Loan program has released term sheets and various other program documents for the three types of loans, “New,” “Priority” and “Expanded,” as well as over 70 pages of Frequently Asked Questions (FAQs). As a result, the contours of the Main Street Loan program are now substantially settled[1] as the Fed announced publicly on Monday, July 6, that the Main Street Lending Program is now fully operational and ready to purchase participations in eligible loans that are submitted to the program by registered lenders (Eligible Lenders).

What to expect as banks report earnings: more loan pain but plenty of fee income

The largest U.S. banks will announce their second-quarter results next week. Investors should expect another big hit to earnings as banks set aside more money to cover expected loan losses. On the other hand, the big banks are also continuing to see a boost to fee income from elevated investment-banking and trading activity, even as the coronavirus crisis continues.

Consumer credit fell at a slower 5.3% in May as the economy began to recover

The numbers: Consumer borrowing fell at a slower 5.3% annual pace in May after a huge decline in April, as the economy began to recovery from the deepest downturn in American history. Total consumer credit dropped by an annual rate of $18.2 billion in May, compared to a much larger $70.2 billion plunge in April, according to Federal Reserve data released Wednesday. What happened: Revolving credit, like credit cards, declined at a nearly 29% clip in May. In April, revolving credit shrank by a record 65%.

Consumer Financial Protection Bureau Takes Action Against Student-Loan Debt-Relief Business and Its Owners for Taking Illegal Advance Fees

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) settled with Timemark, Inc., a company based in Deerfield Beach, Florida, that provides debt-relief services to consumers with federal student-loan debt, and with its owners and officers, Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway. The Bureau alleged that the defendants charged illegal advance fees in violation of the Telemarketing Sales Rule (TSR) to consumers who were seeking to renegotiate, settle, reduce, or alter the terms of their loans. If entered by the court, the proposed order memorializing the settlement will permanently ban defendants from providing debt-relief services and impose a judgment totaling approximately $3.8 million in consumer redress and civil money penalties.

BBB Warning: Texas Attorney General sues student loan debt relief company after extensive BBB investigation

My Education Solutions (MES), a San Antonio based student loan debt relief company, claims its program and services successfully reduce student loan debt by helping consumers qualify and enroll in federal student loan forgiveness programs.

FTC Sends More than $1 Million in Refunds to Victims of Student Loan Debt Relief Scam

The Federal Trade Commission is mailing checks totaling more than $1 million to individuals who lost money to a student loan debt relief scam.

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.

FICO’s new Resilience Index shows how much of a credit risk you could be in a recession, but it doesn’t replace your credit score

Credit scores are one of the most important numbers for your personal finances. While many people are familiar with popular scoring models like FICO and VantageScore, new models and updates can offer lenders improved measures of risk. The new FICO Resilience Index does just that.

SAM, Inc. Becomes Certified Broker by RMAi

Pittsburgh, PA – July 7, 2020 – Solutions for Account Management, Inc., better known as ‘SAM’, today announced that it has earned the highly regarded designation of Certified Receivables Vendor (CRV) after fulfilling the comprehensive national standards contained in RMAI’s Receivables Management Certification Program (RMCP). These standards have been recognized for exceeding state and federal laws and regulations through a series of stringent requirements that stress responsible consumer protection through increased transparency and operational controls.

The truth about medical bills sent to collections

If you think you’re immune to damage from a collection account on your credit report because you pay your bills on time, think again. Medical bills that you don’t know about could be hurting your credit—and the odds are not in your favor.

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