At a glanceFriday, September 04, 2020

Collection Industry News At A Glance - September 4, 2020
Friday September 4, 2020
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California’s ‘Mini-CFPB’ Law May Extend to Small Business Loans

Tucked into California’s new law to expand its financial watchdog’s enforcement powers over consumer financial products is a provision that could extend to online small business lenders. The bill, headed to Gov. Gavin Newsom (D) for his signature after legislative approval Monday, would transform the Department of Business Oversight and expand its ability to charge companies engaged in certain categories of misconduct, called unfair, deceptive, or abusive acts or practices (UDAAP). It’s modeled after the Consumer Financial Protection Bureau’s UDAAP enforcement authority.

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PPP lenders nearing $10B asset mark fear regulatory nightmare

WASHINGTON — Community banks are urging Congress and regulators to exclude Paycheck Protection Program loans from their total asset amounts out of increasing concern that participation in the government's pandemic relief effort will trigger new burdensome regulations. Participation in the coronavirus loan program for small businesses has helped push numerous institutions' asset totals beyond $10 billion. Crossing that key threshold brings supervision by the Consumer Financial Protection Bureau, pricing limits on debit interchange fees and required compliance with the Volcker Rule ban on proprietary trading, among other things.

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Attorney General Becerra Condemns OCC Proposal to Open the Floodgates for Predatory Lending and Rent-a-Bank Schemes

SACRAMENTO – California Attorney General Xavier Becerra today, joining a coalition of 24 attorneys general, submitted a comment letter opposing the Office of the Comptroller of the Currency’s (OCC) proposed “True Lender” Rule (Proposed Rule). This rule would permit predatory lending by allowing non-bank lenders to ignore state interest-rate caps on consumer loans simply by partnering with national banks, which are exempt under federal law from state interest-rate caps.

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Attorney General James Renews Suspension of State Debt Collection for Sixth Time as Coronavirus Continues to Impact New Yorkers’ Wallets

NEW YORK – New York Attorney General Letitia James today announced that the state will tomorrow again renew, for the sixth time, an order to halt the collection of medical and student debt owed to the state of New York that has been specifically referred to the Office of the Attorney General (OAG) for collection for an additional 30-day period. In response to continuing financial impairments resulting from the spread of the coronavirus disease 2019 (COVID-19), the OAG will renew orders again tomorrow, Saturday, September 5, 2020, through Sunday, October 4, 2020

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Auto Dealer Group to Cease Business Operations As Part of FTC Settlement

A group of auto dealerships in Arizona and New Mexico must cease business operations as part of a court-approved settlement resolving Federal Trade Commission charges that the dealerships deceived consumers and falsified information on vehicle financing applications.

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Why Visa and Mastercard are suddenly keen on installment lending

Financial industry heavyweights are taking note of the rapid rise of new borrowing options that offer shoppers an alternative to the decades-old credit card. PayPal, Visa, Mastercard and Citigroup have all made recent moves that reflect the impact of emerging products from the likes of Affirm, Afterpay and Klarna. Those loan products, which are often grouped together under the “buy now, pay later” umbrella, allow shoppers to make fixed installment payments, rather than tapping into a revolving credit line.

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Top regulator pushes ahead with plan to reshape banking, sparking clash with states

A federal regulator is moving to offer national charters to companies that provide payments services, escalating a battle with states over whether businesses that don’t take deposits should be given national bank status.

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Update on Coronavirus Relief for Student Loan Borrowers

President Donald Trump signed a memorandum in August extending coronavirus emergency relief benefits for borrowers with federal student loans through Dec. 31. Since that signing, the Education Department has released additional details to help qualifying borrowers understand how this extension will affect their student loans.

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Wells Fargo targeting up to 25% of workforce in mass layoffs

Wells Fargo & Co. is planning severe job cuts that could ultimately impact up to 20% to 25% of its workforce, or around 50,000 to 66,000 jobs, according to sources.

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Consumer Financial Protection Bureau Settles with Seventh Mortgage Company to Address Deceptive Loan Advertisements Sent to Servicemembers and Veterans

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (Bureau) issued a consent order against Accelerate Mortgage, LLC (Accelerate), a Delaware limited liability corporation that is licensed as a mortgage broker and lender in about 31 states. Accelerate offers and provides mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). Accelerate’s principal means of advertising VA-guaranteed loans is through direct-mail advertisements sent primarily to United States military servicemembers and veterans.

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CA Bill 2524 Passed California State Senate And Sent To CA Governor To Be Enacted

On August 28, 2020 the California State Senate passed the heavily amended AB 2524.  “Check Sellers, Bill Payers and Proraters Law: out-of-state activities” Bill. On September 1, 2020, AB 2524 was sent to the California Governor for his signature and therefore the enactment of the Bill.  

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Children’s Online Learning Program ABCmouse to Pay $10 Million to Settle FTC Charges of Illegal Marketing and Billing Practices

Online children’s education company Age of Learning, Inc., which operates ABCmouse, will pay $10 million and change its negative option marketing and billing practices to settle Federal Trade Commission charges that it made misrepresentations about cancellations and failed to disclose important information to consumers, leading tens of thousands of people to be renewed and charged for memberships without proper consent.

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Thousands of small-business loans may have been fraudulent, U.S. House panel finds

WASHINGTON (Reuters) - Tens of thousands of loans worth billions of dollars may have been subject to fraud, waste and abuse in the $659 billion taxpayer-funded program aimed at helping small U.S. businesses survive the coronavirus pandemic, according to a report released by Democratic lawmakers on Tuesday.

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Credit card firms split on fate of consumers while U.S. cuts aid

A fissure is forming in the U.S. credit card industry: Are consumers about to go bankrupt or bounce back? On one side, risk management pioneer Capital One Financial is reining in credit lines to reduce its exposure. On the other, the nation’s largest card issuer, JPMorgan Chase, is rolling out a new card designed for travelers and diners — the ultimate countercyclical bet.

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CFPB California Style: New Name Is Just The Start For A Much More Powerful Regulator

California has become the latest state to create its own mini Consumer Financial Protection Bureau (CFPB). As part of the 2020-21 budget, Governor Gavin Newsom set in motion a reorganization and significant expansion of the authority of the California regulator, the Department of Business Oversight (DBO). This reorganization includes:

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CFPB Report: Effects of COVID-19 on Mortgage Loans, Other Debt

The Consumer Financial Protection Bureau (Bureau) this week issued a report examining the effects of the COVID-19 pandemic on consumer credit through June. The report focused on mortgage, student and auto loans, and credit card accounts since March.

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Colorado couple sees $200,000 in student debt discharged by judge

A new ruling by the U.S. Court of Appeals for the Tenth Circuit found that a Colorado couple’s private student loans could be discharged when a borrower files for personal bankruptcy, a legal concept dominating student debt for years." A new ruling by the U.S. Court of Appeals for the Tenth Circuit found that a Colorado couple’s private student loans could be discharged when a borrower files for personal bankruptcy,further upending a legal concept dominating student debt for years. The ruling rejected student loan giant Navient’s claims that $200,000 worth of private student loans owed by the Colorado-based McDaniel couple was non-dischargeable under bankruptcy law.

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CFPB continues to bring actions against mortgage companies targeting veterans with deceptive ads

The Consumer Financial Protection Bureau issued a consent order against two companies on Tuesday following recent investigations of mortgage companies that use deceptive mailers to advertise loans guaranteed by the United States Department of Veterans Affairs. Those investigations have resulted in actions against six companies this summer. The most recent cases were those against Service 1st Mortgage, Inc., and Hypotec Inc., which found the companies had sent consumers numerous mailers for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or that lacked required disclosures. In the case of Service 1st Mortgage, the misleading mailers were sent out for a period beginning in 2015, and for Hypotec, beginning in 2016.

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California Legislature passes landmark bill to license debt collectors

SACRAMENTO – With an eye toward shielding consumers from unscrupulous debt collectors preying on California families during the COVID-19 induced economic crisis, the state Legislature today approved a bill by Senator Bob Wieckowski (D-Fremont) to license debt collectors and debt buyers operating in California.  The bill, SB 908, now heads to Governor Newsom for his consideration.  It is supported by a large coalition of consumer organizations and legal service providers.

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Consumer Financial Protection Bureau Settles with Sixth Mortgage Company to Address Deceptive Loan Advertisements Sent to Servicemembers and Veterans

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (Bureau) issued a consent order against Service 1st Mortgage, Inc. (Service 1st), a mortgage broker based in Glen Burnie, Maryland that is licensed in about 12 states. Service 1st offers and provides mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). Service 1st's principal means of advertising VA-guaranteed loans is through direct-mail advertisements sent primarily to United States military servicemembers and veterans.

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Consumer Financial Protection Bureau Settles with Fifth Mortgage Company to Address Deceptive Loan Advertisements Sent to Servicemembers and Veterans

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (Bureau) issued a consent order against Hypotec, Inc., a mortgage broker based in Miami, Florida that is licensed in eight states. Hypotec offers and provides mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). Hypotec advertises its VA-guaranteed loans to United States military servicemembers and veterans through direct-mail advertisements.

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AG Healey Sues Major Subprime Auto Lender for Unfair and Deceptive Practices in Its Subprime Auto Loan Business in Massachusetts

BOSTON — A lawsuit has been filed against national auto lender Credit Acceptance Corporation (CAC) for allegedly making unfair and deceptive auto loans to thousands of Massachusetts consumers, providing investors with false or misleading information regarding auto securities they offered, and engaging in unfair debt collection practices, Attorney General Maura Healey announced today.

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CFPB News: Bureau Places Itself Under the Microscope

In a potentially critical new development, the Consumer Financial Protection Bureau (CFPB or Bureau) will now impose what it characterizes as independent “peer review” on certain of its more important internal research. Will this provide an important check against partisan analyses or generate more of the same? We tell you all you need to know in this update.

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CFPB: About 6% of Mortgage Borrowers Receiving Coronavirus Relief

Around 6% of outstanding first-lien mortgages in June 2020 were reporting zero payment due based on credit bureau data, up from essentially none in February—thus indicating some kind of coronavirus-related payment relief, the Consumer Financial Protection Bureau said in a report today. As would be expected, mortgage assistance was more likely to be reported in areas correlated with health and economic effects of COVID-19, including areas with greater shares of virus cases, greater shares of minority populations and higher levels of unemployment shock.

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Consumer Financial Protection Bureau Settles with Remittance Transfer Providers for Remittance Transfer Rule Violations

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (Bureau) entered into settlements with Trans-Fast Remittance LLC and Sigue Corporation and its subsidiaries, SGS Corporation and GroupEx Corporation. Trans-Fast, which until recently was a remittance transfer provider, is based in New York, New York and licensed in over 30 states.

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Student borrower protection bill on verge of passage in California

The California Senate passed a bill Friday that would impose tough new standards on banks and certain other companies that service education loans.   Supporters expect the legislation, which is known as the Student Borrower Bill of Rights, to be approved by the state Assembly and signed into law by Democratic Gov. Gavin Newsom.

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DeSantis extends eviction moratorium again, but since he changed its wording hundreds of cases have been filed

Since Gov. Ron DeSantis quietly changed the wording of Florida’s eviction moratorium, landlords in Orange County have filed hundreds of cases to remove tenants, outpacing the entirety of filings that streamed into the court from April to July when a stricter ban on evictions was in place.

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Main Street looks to Congress for new lifeline as pandemic impact lingers on

As stimulus talks remain deadlocked in Washington, the situation on Main Street is becoming increasingly dire. The window to apply for new Paycheck Protection Program loans has expired and many who have accessed loans have used the funding. As businesses operate with limited capacity due to Covid-19 restrictions, new data show many anticipate more aid will be needed or the sector’s decimation will continue. Recent data from the National Federation of Independent Business finds that one in five businesses say they will have to shut down if economic conditions don’t improve within the next six months.

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Capital One cuts credit limits as millions struggle with income cliff

Capital One is cutting the credit limits on some credit cards, with some consumers reporting on social media that their credit limits have been cut in half by the card issuer. The company said it’s making the decision based on the customer’s account activity in the last year. Capital One, the third-largest card issuer, is trimming consumers’ credit lines just weeks after the extra $600 in weekly unemployment benefits expired, a benefit that more than 27 million out-of-work adults had relied upon. That income cliff “will depress consumer confidence and spending and weigh on the broader economic recovery,” even as consumer spending remains 5% below pre-pandemic levels, according to Oxford Economics. 

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US consumer spending rose a moderate 1.9% in July

WASHINGTON (AP) — U.S. consumers increased their spending by 1.9% last month, a dose of support for an economy struggling to emerge from the grip of a pandemic that has held back a recovery and kept roughly 27 million people jobless. The July gain marked the third straight monthly increase in consumer spending, the primary driver of the U.S. economy, but represented a slowdown from the previous two months. Friday’s report from the Commerce Department also showed that income rose 0.4% in July after two months of declines.

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Improvement in coronavirus mortgage bailout stalls, as more borrowers struggle to make payments

After improving markedly in July, the number of borrowers struggling to make their monthly mortgage payments has essentially flatlined and now threatens to move higher. As of Aug. 25, 3.9 million homeowners were in mortgage forbearance programs, according to Black Knight, a mortgage technology and analytics firm. This represents 7.4% of all active mortgages and is unchanged from the week before. The numbers have not improved in the past two weeks.

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Over 3.6 Billion Robocalls in July Mark 9% Monthly Increase, Says YouMail Robocall Index

IRVINE, Calif., Aug. 6, 2020 /PRNewswire/ -- Americans received just over 3.6 billion robocalls in July, an approximately 9% increase from June. In July, robocalls averaged just over 117.1 million calls per day, or roughly 1,356 calls per second. The good news is that the July robocall volume is still 36% below the all-time monthly peak of 5.7 billion calls in October 2019. The bad news is that we are now 27% above the April trough of roughly 2.8 billion robocalls.

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Western PA gas company warns customers of scam

National Fuel Gas Distribution Corporation (National Fuel) is warning customers of a recent collections scam.  Scammers, posing as National Fuel representatives, are contacting customers and stating that the customer has 45 minutes to pay their bill or service will be disconnected.  Customers are reminded that National Fuel DOES NOT disconnect gas service without following its proper collections procedures, including multiple attempts to contact customers via the mail, phone, or in the field. National Fuel DOES NOT force phone payments as the only payment option and DOES NOT request bill payment by prepaid debit card, gift card or wire transfer.

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Industry Events

Oversight Options for Third Party Auditors – Virtual Class 10/20/20

Learn Oversight Tips of Key Risk Areas: Financial, Operational, Contractual and Compliance

A solid, practical and insightful oversight program can not only reduce risk, but maximize results. Learn skills and techniques to audit your third party vendors for compliance with regulations, to validate consumer protection and to verify that your contract requirements and expectations are being met.

October 20 - 20 , 2020

562-906-1101 or email us at

NCUCA 6th Annual Conference

Bellagio, Las Vegas

October 28 - 30 , 2020

LendIt Fintech USA – Virtual

Save 15% with our Discount Code: DC15%

Making sense of this new world with LendIt Fintech, where fintech leaders gather to connect and reimagine the future of finance. All LendIt Fintech events in 2020 will be virtual.

September 30 - October 01 , 2020

LendIt Fintech Europe 2020 – Virtual

Be Sure To Use for Your 15% Discount: DC15%

Making sense of this new world with LendIt Fintech, where fintech leaders gather to connect and reimagine the future of finance. All LendIt Fintech events in 2020 will be virtual.

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