At a glanceWednesday, November 04, 2020

Collection Industry News At A Glance - November 4, 2020
Wednesday November 4, 2020
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No Open And Shut Path For Open Banking As CFPB Mulls Rules

If data is the oil that brings change to financial services, the pipelines are increasingly under scrutiny. Late last week, the Consumer Financial Protection Bureau (CFPB) said it will look to issue advance notice of proposed rulemaking on “open banking” by the end of this year. In other words, there may be a range of potential new rules coming into play in the U.S. And that means the path toward open banking, where, in Europe for example, banks share account data with authorized parties in standardized formats, may be anything but smooth.

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eSkimming Is Back, And Fraud Fighters Are Onto It

The classics never get old, and that includes cybertheft oldies like eSkimming. Warnings of ATM card skimming were commonplace until fairly recently, when multi-factor authentication (MFA) and other fraud defeaters slowly pushed it out of the picture. Now it’s back, riding an odious COVID-era whirlwind of fraud types new and old. “Even eTailers that carefully monitor their platforms for suspicious activity may struggle to detect eSkimming, as fraudsters can conduct these attacks without compromising merchants’ back-end systems,” noted the Next-Gen Debit Tracker®, done in collaboration with PULSE, a Discover company. “Cybercriminals might instead infiltrate the third-party software that merchants’ websites use, such as shopping cart widgets.”

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JPMorgan warns of another potential regulatory fine tied to weak ‘internal controls’ at bank

JPMorgan Chase said that just weeks after paying a record penalty it is facing another potential fine, this time over internal controls in wealth management and other areas. The bank disclosed the impending action late Monday in a filing, saying that one of its regulators told the New York-based company that it faced action “related to historical deficiencies in internal controls and internal audit over certain advisory and other activities.”

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What delayed election outcome means for banks

WASHINGTON — Banks have spent the past year preparing for the impact of either Donald Trump’s reelection or a victory by Joe Biden. But with the presidential race still undecided as of early Wednesday morning, the industry can ponder a third scenario: continued uncertainty.

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Nebraska Initiative 428, Payday Lender Interest Rate Cap Initiative (2020)

Initiative 428 amended state statute by removing the existing limit that prohibits payday lenders from charging fees in excess of $15 per $100 loaned and replacing it with a 36% annual limit on payday lending transactions. It also prohibited payday lenders from collecting fees, interest, or the principal of the transaction if the rate charged is greater than 36%. Payday lenders are prohibited from marketing, offering, or guaranteeing loans with interest rates exceeding 36% in the state regardless of the lender having a physical office in the state.[1]

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Conviction and 10-year sentence upheld in payday loan scam

NEW YORK -- An appeals court on Tuesday upheld the conviction and 10-year sentence for a man who ran a $220 million predatory payday lending operation that cheated over a half-million people nationwide.

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Consumer Financial Protection Bureau Settles with SMART Payment Plan, LLC for Deceptive Sales Practices

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (Bureau) issued a consent order against SMART Payment Plan, LLC (SMART), finding that the company’s disclosures of its loan payment program contained misleading statements in violation of the Consumer Financial Protection Act of 2010’s prohibition against deceptive acts or practices. SMART is a limited liability company with its principal place of business in Austin, Texas. 

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ACI Worldwide Launches Fraud Management in the Cloud to Protect Against Threat of UPI Payments Fraud

NAPLES, Fla. & MUMBAI, India--()--ACI Worldwide (NASDAQ: ACIW), a leading global provider of real-time digital payment software and solutions, today announced ACI Fraud Management in the cloud enables Indian banks to protect the rapidly growing number of Unified Payments Interface (UPI) transactions across the region.

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Mortgages in forbearance fall across all loan types

The U.S. forbearance rate measuring the share of mortgages with suspended payments fell seven basis points to 5.83% last week, according to the Mortgage Bankers Association. “With more borrowers exiting forbearance in the prior week, the share of loans in forbearance declined across all loan types. Almost half of forbearance exits to date have been from borrowers who remained current while in forbearance, or who were reinstated by paying back past-due amounts,” said Mike Fratantoni, MBA’s senior vice president and chief economist.

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Baby Boomers and high earners now carry the most student loan debt: Fidelity study

More than 44 million Americans owe an estimated $1.67 trillion in student debt — and Baby Boomers lead the pack over other generations. Boomers owed 33% more debt in 2020 vs. 2019, due in part to Parents Plus loans secured for children and grandchildren, according to more than 250,000 loans surveyed by Fidelity.

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New Money Study: How the Pandemic Is Changing Americans’ Credit Card Habits, From Spending to Paying Down Debt

Americans are using their credit cards regularly despite the coronavirus pandemic that has engulfed the country this year, according to a recent survey by Money and Morning Consult. But they’re paying down debt and using their cards differently.

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Cyber Security as Competitive Advantage

Cyber security may initially come to mind as a defensive position, but having strong cyber resilience can actually be a competitive advantage, especially when it’s at the forefront of your operations and embodies a commitment to customers. Now more than ever, customers are attuned to the impact of security threats to their own data. 

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Fed lowers minimum loan level for small business lending program

The Federal Reserve has lowered the barriers on its lending program for smaller businesses as part of an effort to broaden the appeal of the sparsely used facility. In another pair of tweaks to its Main Street Lending Program, the Fed on Friday said it is reducing the minimum loan size to $100,000 from $250,000 and will ease restrictions on debt for companies already participating in the Paycheck Protection Program.

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SBA presses big businesses to justify aid, sparking uproar

The Small Business Administration is quietly rolling out an effort to scrutinize the largest businesses that took payroll support loans during the pandemic, demanding new details about their operations to justify the aid.

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Payday lending regulation is on the ballot in Nebraska amid sky-high interest rates

In Nebraska, payday lending has been legal in Nebraska since 1994. The law didn’t put a cap on rates and fees at that point. Payday lenders can charge more than 400% in interest. In 2019, according to the state’s Banking and Finance Department, about 50,000 Nebraskans took out 500,000 payday loans. The average loan was $362. The average interest rate was 405%.

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Discharging student loans in bankruptcy—could it soon get easier?

Student loan borrowers who seek to have their debt canceled in bankruptcy — what’s known as discharge — typically find it an expensive process with standards that can be difficult to meet. But recent bankruptcy court rulings and lawmakers’ support of relief for overburdened borrowers may signal a change is coming. In January, a New York court discharged over $200,000 of student loan debt for one borrower. Then, in August, a federal appeals court ruling eliminated $200,000 for a Colorado couple who held 11 private student loan accounts. And in September, a New York judge ruled to enforce a prior bankruptcy discharge of a borrower’s $400,000 of federal student loans that a servicer had failed to carry out.

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Supreme Court ruling could make robocalls ‘virtually unstoppable’

Facebook (FB) is fighting a case in the Supreme Court. It’s not about fake news, foreign influence, censorship, or antitrust issues – it’s about robocalls. This is the second time in 2020 that the Supreme Court has heard a case involving robocalls. Efforts to fight robocalls through new legislation foundered this year as the divided Congress left out key provisions that defined exactly what a robocall really is.

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What debt collectors can and can’t do under CFPB rule – American Banker

The Consumer Financial Protection Bureau released a final debt collection rule on Friday that restricts how often collectors can call borrowers to seven calls per week but for the first time allows communications by voice mail, email and text messages.  The CFPB established rules to allow the use of technologies developed after the Fair Debt Collection Practices Act passed in 1977. Consumers can opt out of such modern communications.  “With the vast changes in communications since the FDCPA was passed more than four decades ago, it is important to provide clear rules of the road,” CFPB Director Kathy Kraninger said in a press release. “Our debt collection rulemaking provides limits on debt collectors and provides clear rights for consumers. With this modernized debt collection rule, consumers will have greater control when communicating with debt collectors.”

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The CFPB Proposes Amendments to the Qualified Mortgage Definition in Regulation Z and Extends the GSE Patch

The Consumer Financial Protection Bureau (CFPB) recently proposed certain amendments to the General Qualified Mortgage (QM) definition in Regulation Z and issued a filing rule extending the expiration of the Government-Sponsored Enterprise (GSE) Patch as a “temporary qualified mortgage” until the mandatory compliance date of the final amendments to the General QM loan definition.

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Debt Collection Practices (Regulation F)

CFPB Just Released:  This rule revises Regulation F, 12 CFR part 1006, which implements the Fair Debt Collection Practices Act (FDCPA), to prescribe Federal rules governing the activities of debt collectors, as that term is defined in the FDCPA. The final rule addresses, among other things, communications in connection with debt collection and prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection.   View pdf of final rule 

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TransUnion Unveils Simpler Income and Employment Verification Process

TransUnion (NYSE: TRU) unveiled today its new seamless and real-time service for lenders and other businesses to access verified income and employment data.

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Consumer Financial Protection Bureau Issues Final Rule, Improves Clarity and Transparency by Amending Disclosure of Records and Information Regulation

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) issued today a final rule amending its Disclosure of Records and Information Regulation. The rule seeks to balance concerns regarding the Bureau’s need to protect confidential personal, business, supervisory, and investigative information against the need to use and disclose certain information in the course of the Bureau’s work or the work of other agencies with overlapping statutory or regulatory authority. Specifically, the rule addresses the confidential treatment of information that the Bureau obtains from persons in connection with the exercise of its authorities under Federal consumer financial laws.

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Agencies Propose Regulation on the Role of Supervisory Guidance

Five federal financial regulatory agencies today invited comment on a proposal outlining and confirming the agencies’ use of supervisory guidance for regulated institutions. The proposal would codify the statement, as amended, that was issued in September 2018 by the agencies that clarified the differences between regulations and guidance.

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US Inches Toward Open Banking With CFPB Notice

With more and more FinTechs introducing their own banking services, the competition is heating up. Small business lending platform BlueVine is the latest FinTech to take this path, having taken the wraps off of its banking solution this week with the launch of BlueVine Business Banking. The solution, which secured about 20,000 SMBs to pilot the technology in the last year, provides deposit account and payment solutions that aim to compete with traditional banks that, as CEO and Co-founder Eyal Lifshitz described, "nickel-and-dime" businesses.

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CFPB Private Education Loan Ombudsman Issues 2020 Annual Report

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) Private Education Loan Ombudsman (Ombudsman) today issued the 2020 Annual Report, which shows that that from September 1, 2019, through August 31, 2020, the Bureau handled approximately 7,000 complaints related to private or federal student loans. 

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Fintech startup SoFi gets preliminary approval for U.S. bank charter

LONDON (Reuters) - Financial technology company Social Finance Inc has received preliminary, conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) over its application for a national bank charter, the company said on Wednesday.

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Remitter Announces Partnership with Alchemy

AI-Driven SMS and Email Communication Recovery Service Teams with End-to-End Cloud Based SaaS Solution to Improve Collections Performance with Enhanced Personalization and Predictability. Phoenix, Arizona; Remitter USA Inc., an AI powered digital communications platform used to improve payment recovery is pleased to announce its partnership with Alchemy Technologies (“Alchemy”), award winning Fintech Infrastructure Development Company.

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