At a glanceWednesday, October 21, 2020

Collection Industry News At A Glance - October 21, 2020
Wednesday October 21, 2020
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Judge Rejects Settlement, Fast-Tracks Student Debt Relief Class Action

SAN FRANCISCO (CN) — Finding strong indications of “bad faith” in the way Education Secretary Betsy DeVos denied 94% of student debt relief claims in recent months, a federal judge rejected a proposed settlement Monday night and fast-tracked a lawsuit over long delays in deciding borrower defense claims.

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CFPB extends GSE patch until QM definition is amended

The Consumer Financial Protection Bureau (CFPB) has issued a final rule extending the Government-Sponsored Enterprise (GSE) Patch effectively until a replacement for the patch is established. Specifically, the rule extends the current patch until the mandatory compliance date of a final rule amending the General Qualified Mortgage (QM) loan definition within the Truth in Lending Act. 

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How the CFPB is Helping Homeowners Struggling with Payments

The pandemic, along with the economic downturn it has caused, leaves homeowners across the country struggling to meet their mortgage payments. This has put more pressure on the Consumer Financial Protection Bureau (CFPB) to find ways of helping homeowners who have been impacted by COVID-19.

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U.S. banking regulators set to finalize new net stable funding ratio for large banks

WASHINGTON (Reuters) - A trio of U.S. banking regulators are set to move Tuesday on finalizing a pair of long-running rulewriting projects aimed at ensuring banks have enough liquidity while minimizing volatility.

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Fintech Startups Broke Apart Financial Services. Now The Sector Is Rebundling

As fintech companies mature, many no longer aspire to be the best at one thing. That could mean not only new revenue sources for fintech companies, but also additional venture capital to startups and even a surge in M&A activity. One example of a hot startup that has drawn attention from a big financial services company is San Francisco-based Plaid, an early fintech startup that manages the connections between apps and banks. Earlier this year, Visa agreed to acquire Plaid for $5.3 billion.

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Massachusetts Eviction and Foreclosure Moratorium Expires and is Replaced by a More Limited CDC Order

On October 17, 2020, the Baker-Polito administration allowed the Massachusetts moratorium on residential foreclosures and residential and small business evictions to expire. Accordingly, commercial landlords may proceed with summary process actions against businesses formerly protected by the moratorium; residential landlords may now be able to move forward with some summary process actions against tenants who have not complied with lease obligations; and lenders may now pursue residential foreclosures.

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Governor Cuomo Signs Executive Order Extending Moratorium On COVID-Related Commercial Evictions Through January 1

Governor Andrew M. Cuomo today signed an Executive Order extending the state's moratorium on COVID-related commercial evictions and foreclosures through January 1. This measure extends protections already in place for commercial tenants and mortgagors in recognition of the financial toll the pandemic has taken on business owners, including retail establishments and restaurants. 

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Federal, state agencies crack down on illegal debt collectors

KANSAS CITY, Mo. — Consumer debt in the United States topped $14 trillion in 2019, a record level according to credit bureau Experian. With so much debt floating around, there are bound to he collectors making calls. But some of those calls are breaking the law. "It continues to be a top consumer complaint at our agency year after year," Federal Trade Commission Attorney Robin Rock said of illegal debt collection

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How Fintech Business Lenders Handle Coronavirus Crisis

Banks and insurance companies are not the only ones to mobilize to help companies in difficulties facing the coronavirus crisis. Fintech companies specializing in participatory small business loans also want to breathe new life into the small and medium-sized enterprises. The global economy finds itself affected by this crisis. All players in the financial sector are in limbo. Large banking networks have struggled on two fronts:

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    More than 7 million households lacked bank, credit union accounts in 2019: FDIC

    Roughly 7.1 million U.S. households did not have an account with a bank or credit union in 2019, according to a report released Monday by the Federal Deposit Insurance Corp. (FDIC). Last year, 5.4 percent of U.S. residents was “unbanked,” the FDIC reported in its biannual survey of how American households interact with the financial system. The unbanked rate fell 1.1 percentage points from 2017 and has declined in every survey conducted since 2011.

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    Why Do People Get Payday Loans? Here’s How it Breaks Down By Income, Age and Location

    With unemployment at a record high and the CARES Act expiring without additional funding, a record number of Americans are experiencing financial difficulties related to the Coronavirus pandemic. At LendUp, we provide loans to people to cover unexpected expenses and when they need the money fast. These types of loans are often called payday loans, and they’re typically the only type of loan available to Americans with lower incomes. Because of our years of underwriting loans and working with our customers, we know a lot about reasons why lower-income Americans need to get these kinds of loans. In this analysis, we’ll review the data on the reasons why Americans turn to payday loans and how it varies by age, income and geographic location.

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    The average American has $90,460 in debt—here’s how much debt Americans have at every age

    In our efforts to keep up with the Joneses (or just get by during this period of economic uncertainty), debt has become a normalized part of the American lifestyle. Borrowing money is often an important part of a long-term financial plan, whether it’s to access education and career opportunities, buy a car for your commute or find a place to call home. However, debt also involves a little risk and can be expensive. Not only do you pay interest fees, borrowing of any kind requires you to make your payments on time in order to keep your account and credit score in good standing. 

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    Closing The B2B Trade Credit Gap With AI, Machine Learning

    Although the COVID era continues to have an outsized impact on small businesses, frontline lending experts say SMBs have recently begun to catch a break when it comes to getting loans through FinTechs and other non-bank lenders. Ken So, founder and CEO of Flowcast, told PYMNTS that today’s $3 trillion worldwide SMB “credit gap” is narrowing because the criteria to secure loans are changing, and increasingly, embracing alternative data sources.

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    The average FICO credit score hit new record highs during the pandemic—here’s why

    The average FICO credit score hit another record high of 711 in the U.S. in July — several months into the global coronavirus pandemic, according to the latest research from the popular scoring company. It may sound crazy that FICO scores actually went up at a time when tens of millions of Americans were unemployed and struggling to pay bills and loans. But when looked at in aggregate, FICO scores don’t shift rapidly, says Ethan Dornhelm, who leads the research and analytic development of FICO scores globally. 

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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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    Industry Events

    NCUCA 6th Annual Conference – October 28 – 30th

    Bellagio, Las Vegas

    October 28 - 30 , 2020