At a glanceWednesday, September 09, 2020

Collection Industry News At A Glance - September 9, 2020
Wednesday September 9, 2020
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JPMorgan found evidence employees and customers misused PPP funds and other stimulus programs

JPMorgan has found evidence that some employees and clients misused loans from the federal Paycheck Protection Program (PPP), according to a memo bank leadership sent employees on Tuesday. In the memo obtained by The Hill, the bank didn’t detail specific instances but said it had found customer wrongdoing involving the PPP, which was created through the March coronavirus relief bill to provide loans to struggling small businesses that could be entirely forgiven if used to pay employees and keep business afloat. 

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SAN DIEGO, Sept. 09, 2020 (GLOBE NEWSWIRE) -- Earlier today, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Encore Capital Group, Inc. (NASDAQ: ECPG) and its U.S.-based subsidiaries Midland Funding, LLC, Midland Credit Management, Inc. and Asset Acceptance Capital Corp. The suit alleges that the defendants failed to implement certain practices required under a consent order entered with the CFPB in September 2015.

“Encore is built on a foundation of treating our consumers fairly and respectfully,” said Greg Call, the Company’s Executive Vice President, General Counsel, and Chief Administrative Officer. “Our efforts in 2015 to implement the CFPB’s new requirements under the consent order were quite thorough and effective, but for a very small percentage of transactions our execution was not immediately perfect. We have long since refined our processes, making the necessary changes to improve our operations, and provided appropriate relief for impacted accounts over three years ago.”

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CFPB using PSAs to boost redress reach

The Consumer Financial Protection Bureau (CFPB) released a series of public service announcements targeting consumers who were harmed by Siringoringo Law Firm, Stephen Lyster Siringoringo, Clausen & Cobb Management Company, Inc., and Joshua Cobb.

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Consumer Financial Protection Bureau Sues Debt Collectors and Debt Buyers Encore Capital Group, Midland Funding, Midland Credit Management, and Asset Acceptance Capital Corp.

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against Encore Capital Group, Inc. and its subsidiaries, Midland Funding, LLC; Midland Credit Management, Inc.; and Asset Acceptance Capital Corp. The companies, which are headquartered in San Diego, California, together comprise the largest debt collector and debt buyer in the United States, with annual revenue exceeding $1 billion and annual net income exceeding $75 million. Encore and its subsidiaries are currently subject to a 2015 consent order with the Bureau based on the Bureau’s previous findings that they violated the Consumer Financial Protection Act (CFPA), Fair Debt Collection Practices Act (FDCPA), and Fair Credit Reporting Act. The Bureau alleges that Encore and its subsidiaries have violated the terms of this consent order and again violated the FDCPA and CFPA. The Bureau’s complaint seeks injunctions against them, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and civil money penalties.

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Consumer and business lending during COVID-19

Banks in several countries are offering deferred payments on credit cards, loans and mortgages for consumers and businesses facing hardship due to COVID-19. UK Finance reported that financial providers granted 1.6 million payment holidays as of 24 April 2020. COVID-19 has increased the financial industry’s focus on digital offerings and increased demand from consumers to use them. With bank branches shut and long waiting times for phone support, even previously nervous digital users have turned to these channels.

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Gov. Wolf Calls for Legislative Action to Help Homeowners and Renters Avoid an Eviction Cliff

With rent and mortgage debt mounting for hundreds of thousands of Pennsylvanians, Governor Tom Wolf is calling on the General Assembly to fix a state relief program to prevent many families from becoming homeless and enact a moratorium on evictions and foreclosures until the end of the year. The governor was joined today by legislators and housing advocates at a press conference in Lancaster County.

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Sherrod Brown faults the CFPB and banks for not letting borrowers know about mortgage relief during coronavirus pandemic

WASHINGTON, D.C. - U.S. Sen. Sherrod Brown of Ohio is criticizing the Consumer Financial Protection Bureau (CFPB) for failing to ensure that borrowers know that they’re legally entitled to temporary relief from mortgage payments during the coronavirus pandemic.

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Consumer Financial Protection Bureau and New York Attorney General Take Action Against Debt-Collection Operation and Its Owners and Managers

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau), in partnership with the New York Attorney General (NYAG), today filed suit against a network of five different companies based outside of Buffalo, New York, two of their owners, and two of their managers, for their participation in a debt-collection operation using illegal methods to collect debts. The company defendants are: JPL Recovery Solutions, LLC; Regency One Capital LLC; ROC Asset Solutions LLC, which does business as API Recovery Solutions; Check Security Associates LLC, which does business as Warner Location Services and Orchard Payment Processing Systems; and Keystone Recovery Group.

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Judge says Kansas City payday lender should pay $132 million to duped borrowers

A judge has recommended that a Kansas City payday lender pay $132.5 million in restitution to borrowers duped by their loan agreements.   An administrative law judge also said that Integrity Advance and its chief executive James Carnes, a Johnson County businessman, should have to pay $7.5 million and $5 million in civil penalties, respectively

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How AI will automate cybersecurity in the post-COVID world

By now, it is obvious to everyone that widespread remote working is accelerating the trend of digitization in society that has been happening for decades. What takes longer for most people to identify are the derivative trends. One such trend is that increased reliance on online applications means that cybercrime is becoming even more lucrative. For many years now, online theft has vastly outstripped physical bank robberies. Willie Sutton said he robbed banks “because that’s where the money is.” If he applied that maxim even 10 years ago, he would definitely have become a cybercriminal, targeting the websites of banks, federal agencies, airlines, and retailers. 

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AP Explains: US debt will soon exceed size of entire economy

WASHINGTON (AP) — The U.S. government’s war against the coronavirus is imposing the heaviest strain on the Treasury since America’s drive to defeat Nazi Germany and imperial Japan three-quarters of a century ago. The Congressional Budget Office has warned that the government this year will run the largest budget deficit, as a share of the economy, since 1945, when World War II ended. Next year, the federal debt — the sum of the year-after-year gush of annual deficits — is forecast to exceed the size of the entire American economy for the first time since 1946. Within a few years, it’s on track to set a new high.

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Restrictions keep lenders, borrowers from Main Street Lending Program

NEW YORK (LPC) - Restrictions within the US government’s coronavirus aid Main Street Lending Program (MSLP) are staving off borrowers and lenders alike even as new lending activity begins to pick up in the middle market.

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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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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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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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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