At a glanceWednesday, August 12, 2020

Collection Industry News At A Glance - August 12, 2020
Wednesday August 12, 2020
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Home loan applications rise as rates fall to another record low

Applications for home loans rose last week, though concerns about supply and the economy linger. The volume of applications to purchase homes rose by 2 percent, seasonally adjusted, compared to the week prior.

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CFPB Solicits Assistance in Combating Credit Discrimination

On July 28, 2020, the Consumer Financial Protection Bureau (CFPB) issued a request for information (RFI) soliciting input on how best to protect consumers from unlawful discrimination in all aspects of credit transactions. The CFPB is empowered by Regulation B to supervise and enforce compliance with the Equal Credit Opportunity Act (ECOA), which makes it unlawful for any creditor to discriminate “(1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract); (2) because all or part of the applicant’s income derives from any public assistance program; or (3) because the applicant has in good faith exercised any right under [the Consumer Credit Protection Act].”

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Derailment of small business rescue clouds U.S. recovery

The Paycheck Protection Program, which has kept millions of small businesses afloat during the pandemic, is in limbo, creating a new source of uncertainty for the country’s economic recovery. The collapse of pandemic relief negotiations has brought complications for the massive emergency lending program, which shut down on Saturday to new loans after doling out more than $520 billion in funds, leaving banks and borrowers unsure of how to proceed with a key phase of the rescue.

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U.S. bankruptcies on track for 10-year high with more than 100 consumer companies already filing

U.S. bankruptcies are en route to a 10-year high with 424 companies filing as of August 9, according to S&P Global Market Intelligence. The group's analysis took into account both public and private companies with public debt. The coronavirus has hit consumer companies hard, with more than 100 filing for bankruptcy including Men's Wearhouse parent Tailored Brands Inc. TLRD, -16.21%, department store Lord & Taylor and work wear retailer Brooks Brothers

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Clouds on The Horizon for Many U.S. Homeowners: Overall Delinquency Rates Beginning to Climb, According to CoreLogic Loan Performance Insights Report

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report for May 2020. On a national level, 7.3% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure). This represents a 3.7-percentage point increase in the overall delinquency rate compared to 3.6% in May 2019.

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One-third of Americans expected to miss August rent

Millions of Americans who live in a rental home or apartment are expected to miss their rent in August, the first month since  the coronavirus pandemic began that there's no federal freeze on evictions in place.

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FTC Sends Refunds Totaling More Than $9.1 Million to Customers Defrauded by Deceptively Marketed “Amazing Wealth System”

The marketer of a scheme to make money on Amazon, and his companies, are banned from marketing and selling business opportunities and business coaching services under a settlement with the Federal Trade Commission. The settlement order against Jeffrey A. Gomez (aka Jeffrey Adams), Adams Consulting LLC, and Global Marketing Services L.L.C. also requires them to surrender funds and assets for consumer redress.

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Why banks are putting PPP forgiveness on the back burner

The Paycheck Protection Program's forgiveness portal has debuted, leaving bankers and their borrowers with a big decision. Those who participated in the $659 billion program must determine if they are ready right now to navigate the complex system for having loans forgiven, or if it makes sense to wait and see if Congress intervenes and simplifies the process. That decision was complicated over the weekend when talks about a new round of stimulus collapsed, casting doubt on when — or if — PPP will get an overhaul.

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Consumer borrowing up in June after three months of declines

WASHINGTON — The pandemic still has Americans easing off the plastic. U.S. consumer borrowing rose in June after three months of declines but the key category of credit card debt extended its decline. The Federal Reserve reported Friday that overall consumer borrowing rose by 2.6 percent, or $8.95 billion, in June after big declines in March, April and May as many parts of the country went into lockdown to combat the coronavirus.

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Trump extends student loan relief through year’s end

President Donald Trump on Saturday signed an executive order continuing the pause on monthly payments and interest for many federal student loan borrowers until the end of the year. Trump’s order is aimed at circumventing Congress to extend the emergency student loan relief granted in March under the CARES Act.

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Student Loan Relief Extended — But Here’s Why You Should Prepare for Repayment Now

President Donald Trump signed an executive order Saturday extending the current pause on federal student loan payments through Dec. 31, 2020, throwing a lifeline to millions of borrowers. But that said, the suspension will end eventually, so it’s worth preparing now for that new beginning.  So while the payment freeze and 0% interest period are now extended through the end of the year, it’s worth being proactive. Particularly, if you have a loan in default, you will want to rehabilitate your repayment while you’re free from collections and additional harm to your credit report.

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Mortgage rates drop below 3% for the first time — and economists say rates could stay that low through 2021

At the beginning of the coronavirus pandemic, mortgage industry experts forecast that benchmark interest rates might fall, but wouldn’t drop below 3%. But now, that’s just what has happened. And many economists predict that mortgage rates will remain below that threshold into 2021. The 30-year fixed-rate mortgage averaged 2.98% for the week ending July 16, down five basis points from the previous week, according to Freddie Mac.

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Subprime Buyers May Face Worsening Credit Conditions This Fall

Buyers with bad credit could find it harder to get an auto loan in the coming months, according to Cox Automotive. The prediction comes following worsening coronavirus outbreaks in many areas of the country. The resulting uncertainty for subprime buyers could be a cause for concern in a market that was recovering.

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New report shows historic drop in credit card debt amid the coronavirus pandemic

In the months since the coronavirus pandemic hit and sent millions of Americans to shelter at home, consumers’ credit card debt has fallen fast to unprecedented levels. According to a new report released Thursday from the Federal Reserve Bank of New York, the second quarter of 2020 saw a staggering $82 billion decline in credit card balances. Second-quarter declines in card balances, in general, have only been seen during the Great Recession, and a drop this big in the second quarter of the year hasn’t happened since at least two decades ago, the report says.

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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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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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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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Industry Events

 
NCUCA 6th Annual Conference



October 28 - 30 , 2020
LendIt Fintech USA – Virtual

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

www.lendit.com

LendIt Fintech Europe 2020 – Virtual

LendIt Fintech Europe

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

646-971-1645

Auto Finance Summit 2020 – Virtual

Royal Media

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

https://www.autofinancesummit.com/contact-us