At a glanceFriday, September 18, 2020

Collection Industry News At A Glance - September 18, 2020
Friday September 18, 2020
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CFPB Faces Contention On Loan Data For Minority, Women-Owned Businesses

The Consumer Finance Protection Bureau (CFPB) has a new plan for how it looks at data from minority- and women-owned businesses, according to a report from Morning Consult. The issue has been a contentious one for some time, as the CFPB has delayed making rules on a section of Dodd-Frank that requires the collection of data to determine whether minority- and women-owned businesses have equitable access to funds.

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Schumer, Warren propose forgiving $50,000 in student debt for borrowers due to pandemic

Senate Minority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., announced a resolution Thursday that would broadly cancel federal student loan debt due to the coronavirus crisis. The resolution calls on President Donald Trump to take executive action to forgive up to $50,000 in debt for borrowers. The economic aftermath from the pandemic, which caused unemployment to spike and wages to fall, has made it nearly impossible for many borrowers to repay their college loans, the senators said.

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Oversight Options Virtual Class – Two for One Offer Expiring Soon

Get insights on Oversight of third party vendors in this newly developed and scheduled class for compliance managers, vendor managers, auditors and/or recovery managers.  A solid, practical and insightful oversight program is essential for compliance with regulations and well as to validate consumer protection and verify contract requirements, in addition to maximizing results.  Hear collection industry experts, Bev Evancic and Ken Evancic, as they provide strategy, process and practical tips for the oversight of your vendors.  Hear "Oversight Options" fresh insights on oversight with concentration of four key risk areas: Financial Risk, Operational Risk, Contractual Risk and Compliance Risk.  Virtual Class - special 2 for 1 pricing for registrations received prior to September 20.

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Regional bank reserves close to peaking with slower virus spread

Slowing COVID-19 infection rates and higher credit-loss provisions could portend peaked reserves for some regional banks such as PNC, Fifth Third and Huntington. These Midwestern banks have sustained slower infection rates across their deposit markets, while their allowances for credit loss are higher than the 2% median. These factors, as well as improving economic indicators, could spur a sharper decline in provision expense in 2H vs. peers. Consensus bakes in 43%, 47% and 66% dropoffs in 2H provisions for Huntington, Fifth Third and PNC, respectively, vs. a 28% median decrease for the group.

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Newsom signs laws to make those with coronavirus eligible for compensation benefits and require companies to warn of exposures

California Gov. Gavin Newsom has signed two bills into law that are aimed at protecting workers from the coronavirus.   One of them makes people who have the coronavirus eligible for workers compensation benefits. Another requires companies to warn their employees if they have been exposed to someone who has tested positive for the virus.

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Why It’s Harder to Get a Peer-To-Peer Loan Right Now

In this pandemic economy, getting a loan is a lot tougher than usual. Economic conditions have stabilized since the beginning of the COVID-19 outbreak, but unemployment is still at a record high. As a result, lenders across various industries have tightened their belts, implementing restrictions on loan-lending. Peer-to-peer lenders, often seen as the more nimble underdog in relation to big banks, are assessing risk in a similar way. 

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Lawsuit: Iowa court debt collected illegally, with millions routed to private firm

A federal lawsuit alleges that the debt-collection company hired by the Iowa Judicial Branch has been paid millions of dollars in fees while violating state and federal laws through deceptive, high-pressure tactics.

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Justice Department Settles with Florida Towing Company it Alleges Illegally Sold or Scrapped Servicemembers’ Vehicles

The Justice Department today reached an agreement with ASAP Towing & Storage Company (“ASAP”) in Jacksonville, Florida, to resolve allegations that ASAP violated a federal law, the Servicemembers Civil Relief Act (“SCRA”), by auctioning off or otherwise disposing of cars owned by protected servicemembers without first obtaining court orders. 

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The Department of Financial Services (DFS) today announced it has filed a statement of charges against debt collector Forster & Garbus LLP ("Forster & Garbus"). DFS alleges that Forster & Garbus, over the course of years, failed to treat consumers as required by the law. Overall, Forster & Garbus did not honor requests by consumers for substantiation of debt, that is, requests for information proving the validity of the debt and Forster & Garbus’s right to collect the debt. New York law requires that substantiation be provided within 60 days of any such request, and describes the particular kinds of documentation a collector must show to substantiate the debt.  

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Fading fiscal stimulus restraining U.S. consumer spending

WASHINGTON (Reuters) - U.S. consumer spending slowed in August, with a key retail sales gauge unexpectedly declining, as extended unemployment benefits were cut for millions of Americans, offering more evidence that the economic recovery from the COVID-19 recession was faltering.

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CFPB’s Small-Business Lending Data Collection Rule Draws Community Bank Criticism

The way in which many small banks could be required to report small-business loan data on minority- and women-owned businesses is emerging as a contentious issue for the Consumer Financial Protection Bureau, which on Tuesday unveiled its long-awaited outline of how it plans to implement a key part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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Succeeding in Collections Today Requires More Agility

New White Paper Released - Advanced “DIY” collections software configurability makes Succeeding in Collections Today With More Agility possible. It is not a new revelation that the collections and recoveries market is becoming more dynamic and complex. Even before the advent of Covid-19, the industry was changing at a faster pace. However, what is not widely known is that collections and recoveries operations are struggling more than ever before to keep up with all the changes they need to make. Many collections operations see the answer lies in having a more agile collections software system that provides more “Do-It-Yourself” (“DIY”) Configurability. More specifically, they want their collections system to enable those in collection operations to easily make more changes at their fingertips. Click on "Read More" below for the full white paper.

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Consumer Financial Protection Bureau Announces Advisory Committee Members

WASHINGTON, D.C. – Consumer Financial Protection Bureau Director Kathleen L. Kraninger has announced the appointment of members to the Consumer Advisory Board (CAB), Community Bank Advisory Council (CBAC), Credit Union Advisory Council (CUAC), and Academic Research Council (ARC). These experts advise Bureau leadership on a broad range of consumer financial issues and emerging market trends.

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Kraken Becomes First Crypto Exchange to Charter a US Bank

On Wednesday, the Wyoming Banking Board voted to approve the San Francisco-based crypto exchange’s application for a special purpose depository institution (SPDI) charter. Kraken is now the first SPDI bank in Wyoming. According to the Wyoming Division of Banking’s general counsel, Chris Land, Kraken will also be the first newly chartered (de novo) bank in the state since 2006. 

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‘Lenders don’t have the capacity’ to meet mortgage demand: expert

Mortgage rates hit a new low last week, the average 30-year fixed rate hit 2.86% for the week ending September 4. It’s the ninth time mortgage rates set a record low this year — and some experts think it won’t be the last time.

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Mortgage lending volume in 2020 likely to break records

Fannie Mae, the world’s largest mortgage financier, said mortgage lending this year probably will reach an all-time high of $3.9 trillion. The dollar-volume record will be boosted by $2.4 trillion in refinancings, the highest level since 2003 and more than double the level seen in 2019, the mortgage giant said in a forecast on Tuesday. “We continue to believe that a low-rate environment will support refinance demand over the forecast horizon,” Fannie Mae said in the forecast. “At the current interest rate of 2.86%, we estimate that nearly 69% of outstanding first-lien loan balances have at least a half-percentage point incentive to refinance.”

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ITT Tech student loan lender to cancel millions in debt in multistate settlement

Roughly $330 million in debt for 35,000 students who attended the now-shuttered ITT Tech will be canceled thanks to a settlement in conjunction with the Consumer Financial Protection Bureau, the attorneys general of nearly all 50 states announced this week. For-profit college chain ITT Tech filed for bankruptcy in 2016, but its former students still faced high-interest loan payments through private lender PEAKS Trust, which was run by ITT Tech and affiliated with Deutsche Bank, according to the Ohio Attorney General's office.

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Consumer Financial Protection Bureau Releases Outline of Proposals Under Consideration to Implement Small Business Lending Data Collection Requirements

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) released its Outline of Proposals Under Consideration and Alternatives Considered for Section 1071 of the Dodd-Frank Act governing small business lending data collection and reporting. The Bureau will convene a Small Business Advocacy Review panel in October 2020. The panel will prepare a report that examines the impact of the potential rule on small businesses. The report, along with feedback received from small businesses, will be considered by the Bureau in its rulemaking to implement Section 1071.

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The changing threat landscape in today’s cybersecurity

Thoughts around threat landscapes commonly prioritize corporate and governmental networks assets as high priorities, with personal networks and resources as lower-level threats. However, there have been recent changes that have caused the reassessment of prioritization levels at times. As a result of the COVID-19 pandemic, the number of individuals who work from home has greatly increased. In fact, Stanford researcher Nicholas Bloom places the percentage of people currently working at home at over 40%.

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National Credit Union Foundation gives over $100k in disaster relief grants

The National Credit Union Foundation has granted over $100K in disaster relief support via CUAid to the California and Nevada Credit Union Leagues and the Louisiana Credit Union League in response to the California Wildfires and Hurricane Laura.

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CFPB and New York AG allege deceptive and harassing collection efforts in lawsuit against five debt collection companies and four individual owners and managers

Last week the CFPB and New York Attorney General filed a lawsuit against five debt collection companies and four individuals who own and manage the companies. The complaint alleges the defendants used deceptive, harassing, and otherwise improper methods to induce consumers to make payments to them in violation of the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act (CFPA). The CFPB and Attorney General allege the defendants collected revenues from consumers ranging from “approximately $10 million in 2015 to over $23 million in 2018.” The complaint seeks the refund of monies paid by consumers, disgorgement of ill-gotten revenues, civil money penalties, and injunctive relief.

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Millions of small businesses want to know when congress is going to streamline the PPP program: CBA CEO

Richard Hunt, Consumer Bankers Association CEO & President joins the On the Move panel to discuss the latest on the stimulus bill and whether the Democrats and Republicans can come to an agreement before the election.

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Attorney General James Stops Debt Collection Company from Unlawful Practices Harming Thousands of Student Borrowers

NEW YORK – New York Attorney General Letitia James today announced that she has secured protections for thousands of student borrowers who defaulted on student loans and who were subject to misleading and unlawful actions by Transworld Systems, Inc. (Transworld), one of the nation’s largest debt collectors. The agreement resolves an investigation of Transworld — the principal debt collector for the National Collegiate Student Loan Trusts — after the Office of the Attorney General (OAG) found that Transworld violated multiple federal and state consumer protection laws by making false, misleading, and deceptive statements in National Collegiate Student Loan Trusts lawsuits and in communications with borrowers, and for filing these lawsuits beyond the applicable statute of limitations.

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Consumer Financial Protection Bureau and Multiple States Enter Into Settlement with Owner of ITT Private Loans for Substantially Assisting ITT in Unfair Practices

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today filed a proposed stipulated judgment against PEAKS Trust 2009-1, along with Deutsche Bank National Trust Company, Deutsche Bank Trust Company Delaware, and Deutsche Bank Trust Company Americas, in their capacity as trustees to PEAKS Trust 2009-1 (collectively, “PEAKS”). In its complaint, filed in the District Court for the Southern District of Indiana, the Bureau alleged that PEAKS provided substantial assistance to ITT Educational Services, Inc. (ITT) in engaging in unfair acts and practices in violation of the Consumer Financial Protection Act of 2010. PEAKS owned and managed private loans for students at ITT Technical Institute.

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Remittance Companies in CFPB’s Crosshairs

The Consumer Financial Protection Bureau (CFPB) recently announced settlements with two remittance transfer providers for violations of the Electronic Funds Transfer Act (EFTA) and the Remittance Rule, part of the regulation that implements the EFTA—an area in which there isn’t typically much CFPB enforcement activity.

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Fraud reports rise as banks dole out PPP loans, report finds

Reports of possible instances of business loan fraud rose over the summer as banks doled out hundreds of billions of dollars’ worth of Paycheck Protection Program loans, according to a new study. The Project on Government Oversight, which analyzed previously unreported government data, noted an “abnormally high” number of suspected business loan fraud reports filed with the Treasury Department’s Financial Crimes Enforcement Network in July. For the month, there were 1,044 reports filed, according to the group, which is about seven times previous monthly averages.

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Opinion Changes to the qualified mortgage rule are coming; be prepared

With origination volumes skyrocketing due to historically low interest rates, it would be an understatement to say lenders have been preoccupied in 2020. However, as the Consumer Financial Protection Bureau considers changes to the qualified mortgage rule, lenders must shift a portion of their focus to ensure they understand the proposed changes and are prepared to comply once the rule becomes final.

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CFPB Supervisory Highlights

The Consumer Financial Protection Bureau (CFPB or Bureau) is committed to a consumer financial marketplace that is free, innovative, competitive, and transparent, where the rights of all parties are protected by the rule of law, and where consumers are free to choose the products and services that best fit their individual needs. To effectively accomplish this, the Bureau remains committed to sharing with the public key findings from its supervisory work to help industry limit risks to consumers and comply with Federal consumer financial law.

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Consumer Financial Protection Bureau Settles with Eighth 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 ClearPath Lending, Inc. (ClearPath), a California corporation that is licensed as a mortgage broker or lender in about 22 states. ClearPath offers and provides mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). ClearPath’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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Illinois residents among leaders in paying down credit card debt

(The Center Square) – With the economy showing signs of life despite the ongoing impact of the COVID-19 pandemic, Illinoisans were among the leaders nationally in paying down credit card debt. According to the personal finance website WalletHub, Illinois ranked fifth in the nation in paying down debt in the second quarter of this year. Analyst Jill Gonzalez says the pandemic and the tumultuous job market forced people to take a hard look at the finances.

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Mortgage forbearances drop 22% from May peak

There are 3.7 million U.S. homeowners with mortgages in forbearance this week, down 22% from May’s peak of 4.7 million, Black Knight said in a report on Friday. The total weekly drop was 66,000 loans, a slower pace than the decline of 150,000 in the prior week, the report said. Measured as a share of all mortgages, 7% of home loans are in forbearance, down from 7.1% in the prior week, Black Knight said.

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California Dept. of Business Oversight launches “true lender” investigation of auto title lender’s partnership with Utah bank

On September 3, 2020, the California Department of Business Oversight (DBO) announced that it has launched a formal investigation into whether Wheels Financial Group, LLC d/b/a LoanMart, formerly one of California’s largest state-licensed auto title lenders, “is evading California’s newly-enacted interest rate caps through its recent partnership with an out-of-state bank.” 

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How Covid may change banking forever

Covid-19 has changed how consumers and businesses interact with financial institutions, and new research shows that this trend will likely be permanent. According to the results of Citizens Bank’s first Banking Experience Survey, 50% of consumers and 76% of businesses that responded that the pandemic has changed the way they interact with their financial institution. Of these respondents, 66% of consumers and 73% of businesses feel that these changes will be permanent.

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Industry Events

LendIt Fintech USA – Virtual – September 30 – October 1

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

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

LendIt Fintech Europe 2020 – Virtual – October 19 – 20

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 – October 20 – 22

Royal Media

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

NCUCA 6th Annual Conference – October 28 – 30th

Bellagio, Las Vegas

October 28 - 30 , 2020