At a glanceFriday, August 07, 2020

Collection Industry News At A Glance - August 7, 2020
Friday August 7, 2020
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For many small businesses, federal loan money has already run out

Washington (CNN)Georgie Lou’s Retro Candy store is one of 5 million small businesses that received an emergency loan from the federal  government’s Paycheck Protection Program. But like many mom-and-pop shops, the money is nearly out and customers haven’t returned. The downtown Carlisle, Pennsylvania, store is now selling its gummy worms, Bazooka gum and Harry Potter chocolate frogs online — but sales are down 75% compared to last year.

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Americans’ household debt fell for the first time since 2014 — but that doesn’t mean people are paying off their loans

Total household debt fell on a quarterly basis for the first time since 2014, as Americans tightened their belts amid the coronavirus pandemic. The Federal Reserve Bank of New York reported that total household debt fell by $34 billion, or 0.2%, in the second quarter. It was the largest decrease on record since the second quarter of 2013.

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Fed’s Main Street adds $13 mln in loans, discloses early borrowers

Aug 6 (Reuters) - The Federal Reserve added another $13 million in loans in the latest week under its new Main Street Lending Program for U.S. small and midsize businesses struggling during the coronavirus pandemic, and the central bank disclosed the largest loan so far went to a resort in Pennsylvania’s Pocono Mountains.

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Capital One to Pay $80M Penalty Over Data Breach Incident

Capital One Financial COF has agreed to pay $80 million in fine to U.S. banking regulator over a data breach incident that occurred last year. The cyberattack exposed personal information of 106 million credit card holders of the bank in the United States and Canada.

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Economy adds 1.8 million jobs; unemployment at 10.2 percent

The U.S. gained 1.8 million jobs in July as rising coronavirus cases across much of the country hindered the economic rebound from the first wave of the pandemic, the Labor Department reported Friday.

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OCC Assesses $80 Million Civil Money Penalty Against Capital One

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today assessed an $80 million civil money penalty against Capital One, N.A., and Capital One Bank (USA), N.A.

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CFPB Seeks Input On Improving Access To Credit

On August 3, 2020, the Consumer Financial Protection Bureau (CFPB) published a Request for Information (RFI) that seeks comment on ways to clarify the Equal Credit Opportunity Act’s (ECOA) implementing regulation, Regulation B, to expand access to credit and improve protections against credit discrimination.

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The Bank-FinTech Tie-Up Evolves

As bank-FinTech collaborations evolve, more traditional financial institutions (FIs) are not only implementing services and technologies developed by FinTech partners, but they’re also lending their own expertise to augment FinTech solutions. Also seen in this week’s roundup of the latest in open banking and bank-FinTech collaborations is an emerging use of application programming interfaces (APIs) to enhance payments via both new and legacy rails. PYMNTS rounds up the latest partnerships and initiatives below.

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Attention ARM Leaders: Debt Collection Payment Portals are Communications Under the FDCPA

Consumer attorneys have found a new weakness in the debt collector’s compliance armor: consumer-facing websites.  As debt collectors increase their use of and reliance on consumer-facing websites to support their collection efforts and facilitate payments, the number of consumer lawsuits claiming these websites violate the FDCPA are also increasing. 

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CFPB to Issue Notice on Consumer-Authorized Access to Financial Data

On July 24, 2020, the Consumer Financial Protection Bureau (CFPB) – a government agency that enforces federal consumer financial law –announced plans to issue an advance notice of proposed rulemaking (ANPR) later in 2020 on consumer-authorized access to financial records, according to a news release from the CFPB. The announcement follows a February 2020 CFPB symposium on “Consumer Access to Financial Records and Section 1033 of the Dodd-Frank Act” which included experts from consumer groups, fintechs, trade associations, financial institutions, and data aggregators. The CFPB has released a summary report of the symposium.

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A running list of companies that have filed for bankruptcy during the coronavirus pandemic

For some, the pandemic was a chance to open a new chapter. But for many businesses, the swift and stark economic shutdown led straight to Chapter 11. “We are seeing an acceleration in bankruptcies that is unprecedented,” James Hammond, CEO of New Generation Research, which runs BankruptcyData, previously told FortuneFor 2020, he says, “I’m pretty confident we will see more bankruptcies than in any businessperson’s lifetime.” Ranked by assets alone, says Hammond, the magnitude of bankruptcies this year has already surpassed that of 2008.

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7 groups caution lawmakers about possible ramifications of credit reporting prohibition during COVID-19

WASHINGTON, D.C. - The coronavirus pandemic certainly has disrupted so many parts of finance-company operations. But a group of seven industry organizations, including the American Financial Services Association, is urging federal lawmakers to make sure the pandemic impact doesn’t spread to one of the most important tools for underwriting and portfolio maintenance — credit reporting. The organizations sent a letter this week to the top two members of the Senate Banking Committee to refrain from adding new credit reporting provisions that may negatively affect consumers as federal lawmakers consider potential financial provisions for the COVID-19 response legislation now being discussed on Capitol Hill.

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Attorney General Becerra Opposes Proposal by Consumer Financial Protection Bureau that Protects Debt Collectors at Consumers’ Expense

SACRAMENTO – California Attorney General Xavier Becerra, as part of a coalition of 23 attorneys general, submitted a comment letter opposing the Consumer Financial Protection Bureau’s (CFPB) proposed rule on the collection of time-barred debt. Time-barred debt is debt for which the statute of limitations has expired. The proposed rule follows up on the CFPB’s previously proposed Debt Collection Practices Rule, which fails to protect consumers from abusive and unscrupulous debt collectors. In the letter, the coalition argues that the proposed rule is contrary to both the Fair Debt Collection Practices Act (FDCPA) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and also fails to adequately protect consumers’ rights.

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The number of Americans skipping mortgage payments is falling — except among these borrowers

For nearly two months now, the share of mortgage borrowers who has received approval to skip their monthly loan payments has fallen precipitously.  But a new trend has begun to develop, which indicates that some homeowners are facing more financial pressure as the coronavirus pandemic continues.

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Lending seized up in the second quarter: Morning Brief

Bank lending collapsed in the second quarter. According to the latest Senior Loan Officer Opinion Survey — or SLOOS report — from the Federal Reserve published Monday, bank lending during Q2 tightened by the most since the financial crisis. Across all parts of the commercial lending business and all ares of consumer lending except housing, banks tightened standards and saw demand plunge during the months covering the most acute phase of the pandemic crisis.

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Bernie Sanders-backed bill in the US prohibits private entities from collecting facial data

Senators Bernie Sanders and Jeff Merkley introduced a bill in the US Senate which prohibits private companies from collecting people’s biometrics, including facial data, eye scans, voiceprints, and fingerprints, without their consent. It also bars private entities from selling, and leasing biometric data of people. Even in terms of consent, the bill, called National Biometric Information Privacy Act of 2020, requires private companies to receive written consent from consumers and employees before collecting biometric data such as eye scans or fingerprints. In case written consent isn’t obtained from a person, they will be in a position to sue the private entity, according to the bill.

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Attorney General Becerra Urges Congress to Pass Critical Provisions to Provide Equal Relief Options for all Federal Student Loan Borrowers

SACRAMENTO – California Attorney General Xavier Becerra today, as part of a bipartisan multistate coalition, urged the U.S. Senate to pass the Student Loan Fairness Act (S. 4237), which will extend Coronavirus Aid, Relief and Economic Security (CARES) Act relief to all federal student loan borrowers. Currently, the CARES Act relief applies only to one subset of federal student loans, Direct Loans, leaving nearly 8 million combined borrowers of commercially-held Federal Family Education Loans (FFEL) and institutionally-held Perkins Loans without coronavirus relief options. In their letter, the coalition expresses their support for S.4237 and highlights the importance of providing all federal student loan borrowers with critical relief options amidst the coronavirus pandemic.

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The COVID-19 pandemic and its impact on cybersecurity

The COVID-19 pandemic has presented a once-in-a-lifetime opportunity for hackers and online scammers, and cybersecurity pros saw a 63 percent increase in cyber-attacks related to the pandemic, according to a survey by ISSA and ESG.

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August 5, 2020, Wilmington, DE – Katabat, a leading global provider of debt management software solutions for lenders, fintechs, and collection agencies, announced today a strategic growth investment from Tritium Partners, a growth-focused private equity firm with extensive experience investing in fintech and financial services companies, and Terminus Capital, an enterprise software private equity firm. The investment provides Katabat with significant resources to expand and enhance its industry-leading suite of debt collection products. The transaction also represents an exit for Katabat’s venture backers, including Camden Partners, Osage Venture Partners and Activate Venture Partners. Terms of the transaction were not disclosed.

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Small-business owners have until Aug. 8 to apply for paycheck protection loans

The federal government is about to turn off the tap on its supply of forgivable loans for small businesses. Saturday, Aug. 8 is the last day for entrepreneurs to apply for a Paycheck Protection Program loan. Since it opened on April 3 via the CARES Act, more than 5 million loans to small businesses have been approved, adding up to $521.7 billion, according to Aug. 3 data from the Small Business Administration.

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Crown Asset Management, LLC (CAM), a leading purchaser of charged-off debt and RMAI “Certified Professional Receivables Company”, was recently selected as one of the 2020 Best Places to Work in Collections.  The program, now in its 13th year, is administered by Best Companies Group, which conducts over 60 local, national and industry “Best Places” programs each year.   

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Business groups urge Congress to allow tax deductions for expenses paid with PPP loans

A group of more than 170 trade associations is urging Congress to allow businesses to get tax deductions for expenses associated with loan forgiveness under the Paycheck Protection Program (PPP). "As part of the next round of COVID19 relief, we request that Congress reaffirm its intent and restore the tax benefits it intended to give distressed Main Street businesses as part of the CARES Act," the groups wrote in a letter this week to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Mitch McConnell (R-Ky.).

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Personal loan rates are getting even lower — here’s why

Personal loans are one of the most flexible forms of financing and can be used for anything from consolidating debt or a significant expense like a car repair or medical bill. This type of loan already has pretty attractive interest rates — but the offerings are just getting better. Annual percentage rates on personal loans are even lower now, thanks to the Federal Reserve's rate cuts.

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Six banks commit to launching checking accounts through Google Pay in 2021

We're learning more details about the bid to expand Google Pay's offerings beyond digital peer-to-peer transactions. Six banks have announced partnerships with Google that will allow new customers to launch accounts at their institutions through Google Pay.

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TCPA’s 2015 Government-Debt Collection Exception Struck Down- Now What?

The Supreme Court’s recent decision in Barr v. American Association of Political Consultants held the government-debt exception of the TCPA unconstitutional under the First Amendment’s Free Speech Clause.  This means that going forward, companies that make “debt-collection” calls on behalf of the federal government can only do so with the prior express written consent of the called individuals.

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U.S. banks tightened lending standards, loan demand dropped in Q2, Fed says

Aug 3 (Reuters) - Loan officers at U.S. banks reported tightening standards and terms on all types of business, real estate and consumer loans in the second quarter as widespread coronavirus-related shutdowns plunged the economy into recession and tens of millions of workers lost their jobs.

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As coronavirus accommodations end, government urges banks to help borrowers

The government is urging financial institutions to work with businesses and consumers who have been adversely affected by the coronavirus pandemic as some borrower accommodations expire. Some borrowers may still find themselves under financial stress, the Federal Reserve, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation said in a statement on Monday.

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Bank visibility is key in determining branch closings

As the aftereffects of the pandemic across the country come to light, bank customers may find branches that were temporarily closed may not reopen depending on the branch's visibility, marketability and customer convenience, according to a report.

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FTC Alleges Merchant Cash Advance Provider Overcharged Small Businesses Millions

A leading provider of merchant cash advances used deception to lure small business customers, then regularly withdrew money from their accounts without consent even after the customers had repaid the money they owed, according to a Federal Trade Commission lawsuit.

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Banking Industry Has Critical Role In Saving Small Businesses

Retail banks and credit unions are confronting an enormous task as a result of the COVID-19 crisis. Not only must organizations manage their own earnings and financial challenges, but they must also respond to the financial and non-financial needs of consumers and small businesses. This requires re-imagining the way products and services are delivered and also the types of solutions offered. There is no playbook for the times we are experiencing.

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Demand for Online, Small-Dollar Loans Fell as Consumers Got Pandemic Relief, New Data Shows

As the coronavirus pandemic brought the economy to a standstill, regulators and economists thought that newly out-of-work consumers might need to resort to applying online for short-term, small loans, which are often costly. So far, at least, that hasn’t happened.At the height of business shutdowns and in the first wave of rising unemployment, demand for online small-dollar loans dropped, according to data provided exclusively to Morning Consult by the Online Lenders Alliance.

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FCC Partnership to Fight Robocalls

On July 27, 2020, the Enforcement Bureau of the Federal Communications Commission (the “FCC”) designated the Industry Traceback Group (“ITG”) as the FCC’s official consortium for coordinating efforts to trace illegal robocalls. The ITG is a collaboration of wireline, wireless, VoIP and cable industry companies, led by USTelecom, with the mission of tracing and identifying the source of illegal robocalls. According to the ITG, it conducted more than 1,000 trace-back operations in 2019 and unmasked the source of more than 10 million robocalls.

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Top 6 cybersecurity trends to watch for at Black Hat USA 2020

At this year's Black Hat USA 2020 computer security conference, some of the top trends expected to surface include ransomware, election security and how to protect a remote workforce. This is the 23rd year for the conference, which will be entirely virtual for the first time and will take place from Aug. 1-6. According to the latest Gartner forecast, information security spending is expected to grow 2.4% to reach $123.8 billion in 2020.

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Industry Events

NCUCA 6th Annual Conference

October 28 - 30 , 2020
LendIt Fintech USA – Virtual

Save 15% with our Discount Code: DC15%

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

LendIt Fintech Europe 2020 – Virtual

LendIt Fintech Europe

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


Auto Finance Summit 2020 – Virtual

Royal Media

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