At a glanceFriday, November 13, 2020

Collection Industry News At A Glance - November 13, 2020
Friday November 13, 2020
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CFPB Grants No-Action Letter for Proposed Small-Dollar Credit Product

On November 5, in accordance with its updated NAL Policy, the CFPB granted a no-action letter (NAL) to Bank of America, N.A. regarding its proposed small-dollar credit product, “Balance Assist”, which will provide the Bank’s checking account customers access to credit in increments of $100, up to $500, to be repaid in fixed minimum payments over three months, with an APR of 36% or less plus a $5 “Product Fee” but no late payment or prepayment penalties.

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Consumer Financial Protection Bureau Announces Settlement with Debt Collector for Credit Reporting Violation

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (Bureau) today announced a settlement with Afni, Inc. (Afni) to address its violations in providing information to consumer reporting agencies (CRAs). Afni is a non-bank Illinois-based debt collector that specializes in collecting debt on behalf of telecommunications companies and furnishes information to consumer reporting agencies (CRAs) about consumers’ credit. The consent order requires Afni to take certain steps to prevent future violations and imposes a $500,000 civil money penalty.

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The average Gen Xer has $32,878 in non-mortgage debt—here’s how they compare to other generations

Considering that Gen Xers sit squarely in middle age — this generation was born between the mid-1960s and 1980 — it’s not all that surprising they have the highest household debt according to data from Experian. After all, they’re likely busy juggling kids, aging parents, mortgages, car loans and all the various costs associated with adulthood. According to the Experian 2020 State of Credit report, the average Gen X consumer has about $32,878 in non-mortgage debt, such as credit cards, student loans, car loans and/or personal loans. Gen X homeowners have an average mortgage balance of $245,127.

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Biden transition team brings back key CFPB players

President-elect Joe Biden is creating transition teams as he prepares for Inauguration Day in January, and there is a very familiar name at the top of the transition team for the Consumer Financial Protection Bureau: Leandra English, the hand-picked successor of former CFPB Director Richard Cordray. Thanks to a Supreme Court decision passed (and fought for) by President Donald Trump’s administration, a new CFPB director is widely expected to be one of the early actions Biden will make once in office. 

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Voters Approve California Privacy Rights Act

On November 3, 2020, a majority of Californians voted to approve a new ballot initiative – Proposition 24, or the “California Privacy Rights Act of 2020” (“CPRA”).  We previously issued alerts on the road to certification of this ballot initiative here. Below, we highlight the main points that businesses facing compliance with this new privacy law should bear in mind.

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Fintech Vs. Traditional Lending Risks

Fintech reportedly is allowing lenders to close on mortgage loans faster than in the past, and, especially as the market shifts increasingly digital, all signs point to its growth in mortgage lending. Researchers have found fintech lenders tend to take on certain risks that traditional lenders do not—though, for a few reasons, this is counterintuitive—leaving fintech loans more likely to default.

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Opinion: Many retirees are buried in debt — how can they get out?

It’s easy to assume retirees have built a nest egg and paid off their home. So the last thing they need to worry about is debt. If only. Their labor income has dried up. They primarily live off their savings and Social Security benefits. And despite the best laid plans, maintaining their standard of living in retirement can cost far more than they expected. The total debt burden for Americans over age 70 increased 543% from 1999 through 2019, to $1.1 trillion, according to the Federal Reserve Bank of New York. For those in their 60s, debt grew 471% to $2.14 trillion.

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Homebuying slump worsens as applications for mortgage loans drop

As the vote counting in last week’s presidential election slowed down, so did mortgage applications. An index tracking the number of mortgage applications to buy homes dropped 3 percent, seasonally adjusted, compared to the prior week. The Mortgage Bankers Association’s weekly metric, known as the purchase index, has not increased in seven weeks. Joel Kan, head of industry forecasting for MBA, said the purchase index last week was at the lowest level since May.

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Attorney General Becerra Warns Consumers to Beware of Financial Pitfalls and Scams Targeting Veterans and Servicemembers

SACRAMENTO – California Attorney General Xavier Becerra today, in recognition of Veterans Day, issued a consumer alert warning Californians to be aware of scams targeting veterans, servicemembers, and their families. In today’s alert, Attorney General Becerra provides tips and information to help avoid military-targeted scams, and provides tips for Californians who would like to support our veterans and servicemembers through charitable donations.

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Non-QM lenders are back. But will brokers pick up the phone?

Mark Dodson was having a promising start to the year. His corner of the Atlanta mortgage market – high-value home loans that wouldn’t be bought by the GSEs – was booming. But by March there were whispers that the non-QM space was going to vanish soon. Liquidity had dried up and bond investors were running for the hills.

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Nebraskans vote to cap interest rates on payday loans

Consumer advocates in Nebraska have been pushing state legislators to cap interest rates on payday loans for years, according to Aubrey Mancuso of Voices for Children in Nebraska, to no avail. So this year, they got the issue on the ballot and won, with almost 83% of the vote

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Their Service Entitles Them To Low-Cost Loans. But Veterans Often Pay More

At the start of the year, John Forr saw interest rates falling and figured it was a good time to refinance the mortgage on his house in Punta Gorda, Fla. Forr is a retired Marine Corps colonel. He served for 27 years. He wanted to get a VA loan — backed by the U.S. Department of Veterans Affairs — because he knew he was supposed to be able to get a better deal on the interest rate and other terms. Those are perks offered to vets and service members for their service.

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CFPB data shows consumers “struggling to pay” during the pandemic

It’s no secret that many consumers are facing deep financial distress during the COVID-19 pandemic. Through September, only about half of the people who lost their jobs early in the pandemic had gone back to work. The $600 a week federal unemployment boost ended months ago. And critical policies like limits on debt collection and repossession have only been offered at the state level, leaving millions unprotected.

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Nebraska sees strong year for small-business lending

Nebraska saw a strong year for lending to small businesses even without counting the money lent as part of emergency stimulus programs. The Small Business Administration said Monday that it provided guarantees for $153.7 million worth of loans in fiscal year 2020, which ended in September. That’s $10 million more than the amount guaranteed in 2019, even though the number of loans guaranteed actually declined slightly, from 445 in 2019 to 436 in 2020.

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Millennial Money: What new debt collector rules mean for you

Working with third-party debt collectors can be confusing and scary. For the more than 68 million U.S. adults with debt in collections, knowing their legal rights is crucial. The Fair Debt Collection Practices Act covers third-party debt collectors — those who buy a delinquent debt from an original creditor, like a credit card company. An update to the rules on how the act is applied, announced by the Consumer Financial Protection Bureau in late October, alters the terms of engagement.

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US consumer borrowing up $16.2 billion in September

WASHINGTON (AP) — U.S. consumers increased their borrowing in September, helped by the first gain in the category that covers credit cards in seven months.

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15 States With the Most Seriously Overdue Mortgages

In response to the crisis, the CARES Act invoked a moratorium on home foreclosures for all federally backed mortgages that extends until the end of the year. The act also placed many federally backed mortgage loans into forbearance, allowing mortgage payments to be temporarily deferred for the nearly 70% of all outstanding mortgage holders with federally backed mortgages.

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FTC Requires Zoom to Enhance its Security Practices as Part of Settlement

The Federal Trade Commission today announced a settlement with Zoom Video Communications, Inc. that will require the company to implement a robust information security program to settle allegations that the video conferencing provider engaged in a series of deceptive and unfair practices that undermined the security of its users.

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Industry Events

Collection and Recovery Solutions 2021 (CRS2021)

Resource Management Services, Inc.

Produced by: Resource Management Services, Inc. 10440 Pioneer Blvd., Suite 2 Santa Fe Springs, CA. 90670-8235
Las Vegas , Nevada
May 12 - 14 , 2021

(562) 906-1101

Digital Banking 2020 – December 7 – 9

American Banker

Austin Convention Center 500 East Cesar Chavez Street
Austin , TX
June 08 - November 21 , 2020

(212) 803-8456