At a glanceFriday, October 16, 2020

Collection Industry News At A Glance - October 16, 2020
Friday October 16, 2020
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CFPB Enforcement Actions Rise to Highest Level in 5 Years

Regulatory enforcement actions made by the Consumer Financial Protection Bureau (CFPB) have risen to their highest level in five years, to levels not seen since the Bureau was under the control of Director Richard Cordray during the Barack Obama Administration. This is according to an analysis of the CFPB Online Enforcement Database at Law360.

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CFPB eliminates ban on joint marketing agreements between mortgage, other RE professionals

Last week, the Consumer Financial Protection bureau revoked CFPB Compliance Bulletin 2015-05, the five-year old piece of legislation that essentially banned joint marketing agreements between lenders, real estate agents and other service providers involved in the business of home buying.

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Fintech lenders look at strengthening collections as stress builds up in the system

COVID-19 and the ensuing lockdown has thrown the entire lending sector into a tizzy. From tracking down borrowers who have migrated to their hometowns to getting businesses to start paying back term loans to even collecting consumer durable loans and personal loans, the non-banking finance sector (NBFC) is staring at stressful times.

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Encore Settles CFPB Suit, Ending 2015 Consent Order and Resolving All Open Issues

SAN DIEGO, Oct. 15, 2020 (GLOBE NEWSWIRE) -- Encore Capital Group, Inc. (NASDAQ: ECPG) today announced the resolution of a lawsuit filed last month by the Consumer Financial Protection Bureau (CFPB) against the company and its U.S. subsidiaries. The principal focus of the suit's allegations was that Encore’s implementation of certain practices required under a 2015 consent order was not perfect, although the company addressed those minor gaps years ago. Today’s settlement includes a one-time payment to the CFPB and three narrow conduct provisions that have no incremental operational impact. This agreement will end the 2015 consent order and Encore has no further open issues with the CFPB.

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Consumer Financial Protection Bureau Settles Lawsuit with 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 proposed stipulated final judgment and order to settle its 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.

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Government is partnering with big banks, fintech to speed payments to Americans

As Los Angeles sought to disburse relief funds to its poorest residents at the height of the pandemic, it found itself in uncharted territory. Unlike state and federal entities that process unemployment claims and tax refunds, cities typically lack the infrastructure to make payments to individuals. So Los Angeles turned to the private sector for assistance, working with Mastercard Inc. MA, 1.55% and economic-development nonprofit Accelerator for America on a program that collected private donations, partly via text message, and distributed funds to qualified residents on prepaid “Angeleno” debit cards. 

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Event Information: NM Regulation and Licensing Department Licensees Transition to NMLS Live Q/A and Demonstration

The New Mexico Regulation and Licensing Department is proud to announce that starting November 1, 2020, will begin using NMLS to manage Collection Agency, Collection Agency Manager and Repossessor licensees. Through NMLS, your company will be able to apply for, amend, and renew its license authority conveniently and safely online.

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Auto debt complaints are soaring during pandemic

Consumers struggling to keep up with their auto debts filed a record number of complaints with a key federal consumer watchdog agency in the first five months of the pandemic, according to a new analysis of government data released Wednesday.

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NAFCU, trades urge proper regulation, oversight of payments charters

In a letter to Congress, NAFCU joined with several other financial services industry organizations to outline concerns with the Office of the Comptroller of the Currency's (OCC) newly proposed special purpose payments charter for non-bank and to oppose the OCC’s “effort to grant commercial companies like Amazon and Facebook a national payments charter to access the Federal Reserve payments system and safety net.”

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Big U.S. banks offer muddled outlook on how bad coronavirus losses might get

NEW YORK (Reuters) - Will loan losses from the coronavirus recession get worse, much worse or extremely worse over the next six-to-12 months? All of the above, bank executives said this week.

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Tell Me More – Antitrust Agencies to Demand More Information from Investment Funds

The Federal Trade Commission (“FTC”) recently issued a notice of proposed rulemaking to amend the premerger notification rules (the “Rules”) that implement the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) to change the definition of “person” and create a new exemption.  The new definition of person is specifically designed to obtain more information from certain investment entities, such as investment funds and master limited partnerships, by including “associates” in the definition.

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As attackers evolve their tactics, continuous cybersecurity education is a must

As the Information Age slowly gives way to the Fourth Industrial Revolution, and the rise of IoT and IIoT, on-demand availability of computer system resources, big data and analytics, and cyber attacks aimed at business environments impact on our everyday lives, there’s an increasing need for knowledgeable cybersecurity professionals and, unfortunately, an increasing cybersecurity workforce skills gap.

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One of cybersecurity’s most daunting hurdles is recognizing and stopping insider threats. Employees don’t need to hack in, they already have access to systems from within, so it’s a matter of copying the data and not hacking in to get it. Defending against this vulnerability is a must for organizations, and it often requires organizations to change their mindset concerning access and access control regarding resources and data to improve security.

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Lending Becomes Credible Fintech Catalyst

The rise of cashless payments and e-commerce are among the factors driving the ARK Fintech Innovation ETF (NYSEARCA: ARKF) higher this year, but fintech names, including some ARKF components, are increasingly prominent lenders. Fintech loan growth adds another layer to the ARKF proposition, one that adds to the thesis that fintech companies are willing and able to fill voids created by traditional financial services companies.

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Bank Earnings Show Diverging Fortunes on Wall Street and Main Street

Hundreds of thousands of small businesses are closing for good. Temporary layoffs at larger companies are becoming permanent. But the country’s largest banks, which together serve a majority of Americans through loans, credit cards or deposit services, are not raising an alarm.

In their third-quarter earnings reports this week, big banks have said they are generally prepared for a wave of loan defaults they expect in the second half of next year. And their own fortunes are just fine: A trading and investment banking bonanza on Wall Street is helping them stay profitable.

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Fintech boom prompts Justice to revisit bank merger guidance

The Department of Justice’s antitrust division is contemplating whether it should revisit 25-year-old bank merger guidelines as new financial technologies reshape the banking industry and the market share data that the government uses to determine whether to allow mergers to proceed. It is asking the public whether it should include “nontraditional banks,” such as online lenders, when considering the competitive effects of a proposed bank merger. The responses could shape a policy allowing more rural banks to combine, a move that might not impact competition as much as in the past, given consumers’ increasing options.

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Nissan to pay $4M fine to settle wrongful vehicle repossession charges

The financing arm of Nissan Motor Company will pay a $4 million fine to the Consumer Financial Protection Bureau (CFPB) to settle charges that it wrongfully repossessed vehicles and committed other unfair and deceptive practices, the regulator announced Tuesday. The CFPB alleged that Nissan Motor Acceptance Corp. (NMAC) violated consumer protection regulations by repossessing vehicles despite previous agreements with customers not to do so, refusing to return property left in repossessed vehicles to customers until they paid a fee, and pushing customers into costlier and misleading loan repayment and extension options.

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CoreLogic Reports An Emerging Paradox: U.S. Serious Delinquencies Spiking Despite Strong Housing Demand

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report for July 2020. On a national level, 6.6% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure). This represents a 2.8-percentage point increase in the overall delinquency rate compared to July 2019, when it was 3.8%.

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Consumer Financial Protection Bureau Settles with Nissan Motor Acceptance Corporation for Illegal Collections and Repossession Practices

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (Bureau) issued a consent order against Nissan Motor Acceptance Corporation (Nissan), an auto financing subsidiary of Nissan North America, Inc., which services auto loans and leases originated by Nissan and Infiniti dealerships nationwide. Nissan’s servicing operations are headquartered in Irving, Texas.

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California Consumer Privacy Act (CCPA) Current Rulemaking Activities

On October 12, 2020, the Department of Justice released a third set of proposed modifications to the regulations regarding the California Consumer Privacy Act (CCPA) that went into effect on August 14, 2020. The notice of proposed modifications, text of the proposed modifications, and deadline to submit written comments are below.

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LendingClub Is Ending Its P2P Lending Platform — Now What?

LendingClub's business model pioneered the peer-to-peer (P2P) lending industry. If you aren't familiar with how this works, here's a quick example. Let's say that you want to borrow $20,000 through LendingClub's personal loan platform. You would fill out a credit application, LendingClub would assign you a risk rating, and would post your loan on its marketplace. Investors could then decide to fund some (or all) of your loan, and they would receive a proportional amount of your monthly loan payments, including interest, for doing so.

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Simplified PPP forgiveness doesn’t go far enough, bank trade groups say

The streamlined forgiveness process will affect 3.57 million of the 5.2 million loans originated under the program, which aimed to help small businesses weather the economic hardship brought on by the coronavirus pandemic, according to the SBA. 

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CFPB issues new marketing services agreement guidelines

The Consumer Financial Protection Bureau has pulled its previous guidance regarding whether marketing services agreements comply with anti-kickback rules. In a frequently asked questions post, the CFPB stated that these agreements do not violate Section 8 of the Real Estate Settlement Procedures Act. While the FAQ does not change much on a practical level, it represents a change in attitude by the bureau from when it was headed by Richard Cordray. His CFPB never declared MSAs to be illegal but had expressed some level of hostility towards them.

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Oregon District Court holds that Revocation Cannot Be Imputed to a Party That Never Received Revocation Notification

In Miler v. Td Bank United States, No. 3:20-cv-00340-BR, 2020 U.S. Dist. LEXIS 184658 (D. Or. Oct. 6, 2020), the District Court of Oregon granted Target’s motion to dismiss on the grounds that Plaintiff failed to allege facts sufficient to establish that Target received notice of Plaintiff’s written revocation notice, and that sending that notice to TD Bank was not sufficient to impute knowledge of the attempted revocation to Target.

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Washington Collection Agency Board Extends Remote Work Rule into February

The Washington Collection Agency Board (CAB) has extended the state’s emergency temporary work-from-home rule—enacted in June in response to COVID-19—for employees of licensed collection agencies for an additional 120 days. The extension, until Feb. 17, 2021, is part of the process to enact a permanent rule, which could greatly expand options for the accounts receivable management (ARM) industry and set a precedent for other states to follow suit.

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Who owes the most in student loans: New data from the Fed

Most news stories and reports about student debt cite the fact that Americans owe more than $1.5 trillion. The fact that households in the upper half of the income distribution and those with graduate degrees hold a disproportionate share of that debt almost never makes it into the narrative. But who owes education debt is as important as how much debt there is. Only with this information can we determine who struggles because of their student loans and who is succeeding in the job market because of the education that loans helped them achieve.

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Banks have barely touched the Fed’s Main Street Lending Program. Except this one.

Most banks have steered clear of the Federal Reserve's loan program designed to buoy midsize businesses. One Florida lender is diving in.  Miami-based City National Bank of Florida has embraced the Fed's Main Street Lending Program, which made its first loan this summer. Of the 252 loans issued through the program in its first three months, City National made nearly 100 of them, extending loans of up to $50 million to companies in states as far away as California and Wyoming.

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BBB offers online safety tips for National Cyber Security Awareness Month

The Internet has become a significant part of our everyday lives, allowing us to work, socialize and shop online. Unfortunately, cybercriminals also benefit from that same convenience and accessibility. That’s why the Cybersecurity and Infrastructure Security Agency (CISA) and the National Cyber Security Alliance (NCSA) team up each October for National Cyber Security Awareness Month. This year’s theme is “Do Your Part. #BeCyberSmart,” which emphasizes the importance of individuals taking steps to protect themselves online.

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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

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