At a glanceWednesday, December 02, 2020

Collection Industry News At A Glance - December 2, 2020
Wednesday December 2, 2020
Mid Week Newsletter:
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For 42 million student loan borrowers, monthly payments will resume in January

Monthly payments for most federal student loans have been on pause since March, when the CARES Act gave 42 million borrowers relief during the coronavirus pandemic. For the more than 37 million of those borrowers that haven’t made a payment in months, the unprecedented break is coming to an end. The moratorium will lapse in December, meaning payments will resume again in January unless another extension comes soon.

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Debt Collection Practices (Regulation F)

The Bureau of Consumer Financial Protection (Bureau) is issuing this final rule to revise Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA) and currently contains the procedures for State application for exemption from the provisions of the FDCPA. The Bureau is finalizing Federal rules governing the activities of debt collectors, as that term is defined in the FDCPA. The Bureau's 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.

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CFPB roundup: Final advisory opinions policy & 5 new executives

WASHINGTON, D.C. - Along with making five additions to its executive team, this week, the Consumer Financial Protection Bureau issued its final advisory opinions policy. In making the move publicly, the CFPB said it was looking to address regulatory uncertainty in the bureau’s existing regulations and provide guidance to entities on outstanding regulatory uncertainty. Under the final policy, officials explained entities seeking to comply with regulatory requirements can submit a request to the bureau where uncertainty exists. “Regulatory certainty promotes compliance if the law applies and avoids unnecessary compliance costs if the law does not,” the CFPB said in a news release.

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CFPB Clarifies Position On Earned Wage Access Policy; Says Programs Are Not An Extension Of Credit

The U.S. Consumer Financial Protection Bureau issued an advisory opinion Monday (Nov. 30) that earned wage access (EWA) products do not represent extensions of credit under one of its key regulations. Earned wage, or on-demand, payroll access is used by many companies to give their workers access to their pay before the scheduled payday arrives. The solutions in this area run from variations on payday loans, to sliding fees to straight fee arrangements to interest payments.

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Consumer Financial Protection Bureau Sues DMB Financial, LLC for Allegedly Violating the Telemarketing Sales Rule and Consumer Financial Protection Act

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against DMB Financial, LLC (DMB). The Bureau alleges that DMB violated the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act of 2010 (CFPA) in connection with its debt-settlement and debt-relief services. DMB, which has its principal place of business in Beverly, Massachusetts, offers to renegotiate, settle, or otherwise alter the terms of unsecured debts owed by consumers to creditors or debt collectors. 

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CFPB California Style

Almost a decade after U.S. Senator Elizabeth Warren (D-Mass.) declared that the federal Consumer Financial Protection Bureau (CFPB) would become a new “cop on the beat” protecting consumers of financial products and services, California Governor Gavin Newsom signed a law creating a new state regulatory agency that some commentators have dubbed the “CFPB California style.”

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Here’s what to look out for in cybersecurity in 2021

When we look back in the annals of history, hundreds of years from now, 2020 will not be a high point. Between political upheaval, a global pandemic killing millions, and the knock-on effects on the economy and society, it has not been an easy year. Cybersecurity has also struggled, as the work from home revolution leaves us all susceptible to attacks from hackers.

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2021 predictions for mortgage lending

Fannie Mae predicts average rates for the 30-year fixed loan will remain at 2.8% through 2021 and only rise to 2.9% for 2022. The GSE's November forecast calls for $4.12 trillion in mortgage originations this year, up from $4.08 trillion in the October outlook. For 2021, the latest projections call for $2.72 trillion in volume, up from the $2.62 trillion that Fannie Mae Chief Economist Doug Duncan last predicted.

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More Americans Pay Rent On Credit Cards As Lawmakers Fail To Pass Relief Bill

With their savings running out, many Americans are being forced to use credit cards to pay for bills they can't afford — even their rent. Housing experts and economists say this is a blinking-red warning light that without more relief from Congress, the economy is headed for even more serious trouble.

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FTC Stops Debt Collector’s Alleged “Debt Parking” Scheme, Requires it to Delete Debts it Placed on Consumers’ Credit Reports

The Federal Trade Commission has taken action against a debt collection company that allegedly placed bogus or highly questionable debts onto consumers’ credit reports to coerce them to pay the debts. Under a settlement with the FTC, the company, Midwest Recovery Systems (Midwest Recovery), is prohibited from the practice, known as “debt parking,” and required to delete the debts it previously reported to credit reporting agencies.

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U.S Mortgage Rates Hold Steady at Record Lows

Mortgage rates held steady following a previous week slide to a 13th record low of the year. In the week ending 26th November, 30-year fixed rates remained unchanged following a 12 basis points slide in the week prior. Compared to this time last year, 30-year fixed rates were down by 96 basis points. 30-year fixed rates were also down by 222 basis points since November 2018’s most recent peak of 4.94%.

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Federal Reserve says key bank lending rate will be phased out by June 2023

An interest rate that banks around the world use as a benchmark for short-term borrowing will be phased out and eventually replaced by June 2023, the Federal Reserve announced Monday.

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Lawmakers clinch deal on decadelong fight against shell companies

The most sweeping overhaul of financial crime safeguards in decades is poised to be attached to must-pass defense legislation in the coming weeks — a product of behind-the-scenes negotiations between lawmakers and Trump administration officials who are usually at odds.

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Auto Repossessions Likely to Rise in 2021 as COVID-19 Pandemic Goes On

While everyone has felt the impacts of the coronavirus in some way, one group of people might be about to get hit with another bout of bad news. With coronavirus-related business and school shutdowns on the rise alongside an increase in cases and deaths, more people will lose their jobs or will in some way suffer economic hardship. And that will mean missed debt payments, which translates to a surge in auto repossessions.

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U.S. regulators implore banks to stop using key rate tied to some $200 trillion in debt by end of 2021

Three U.S. bank regulatory agencies on Monday called on banks to stop writing contracts referencing U.S. Libor by the end of 2021. The announcement was tied to a separate announcement from overseas regulators establishing June 2023 as the end date for U.S. dollar Libor reference rates. U.S. bank regulators are trying mitigate the risk of the transition through an orderly winddown. U.S. regulators have decided to replace dollar Libor a scandal-plagued benchmark with the Secured Overnight Financing Rate, or SOFR.

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A Fintech Charter by Another Name

Picture your life without a bank account. Where would you store your money? How would you pay your bills? Who would give you a loan? The COVID-19 pandemic has highlighted the struggle that one in four American households face every day when they cannot access basic banking services, such as checking accounts, payment services, and affordable loans.

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Top 10 Cybersecurity Tips for Small Businesses

Cyber threats are an increasing problem for small- and medium-sized businesses, especially with the major shift to remote work due to COVID-19. Some of the notable data breaches, such as Equifax in 2017, and more recent ones like the ransomware attack that hit German tech firm Software AG in October 2020, result in customers losing trust in the company.

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Debt collection firm ordered by FTC to pay $24 million

ST. LOUIS (AP) — A suburban St. Louis-based debt collection company has been ordered by the Federal Trade Commission to pay more than $24 million for pursuing money that consumers didn’t actually owe.  The St. Louis Post-Dispatch cited court filings posted Wednesday in U.S. District Court. The legal complaint says Midwest Recovery Systems of Earth City would collect “phantom payday lending debts, purported medical debts and other debts that (the company is) consistently unable to verify.”

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10 tips for cyber security at your business

“2020 has presented challenges across the board to businesses big and small and to make things worse, cybercriminal tactics have become more sophisticated than ever. The National Crime Agency has identified a surge in coronavirus-themed malicious apps, websites, phishing emails and messages that seek to steal confidential or sensitive information,” according to the company. “The Chartered Trading Standards Institute has even estimated that the UK has been the most heavily targeted country for Covid-19 related phishing emails.”

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This is the average age when people finally pay off their student loans for good

It may feel like you’re never going to pay off your student loans. But the reality is, your loan does have an end date. The standard repayment plan for federal student loans is calculated on a 10-year timeline, with the expectation that borrowers should be able to pay off their debt within a decade. If that’s unrealistic for someone’s budget, an income-driven repayment plan might allow a qualified borrower to make smaller payments over 20 years instead. With that timeline in mind, it’s not surprising that a 2019 study from New York Life, which polled 2,200 adults about their financial mistakes, found the average participant reported taking 18.5 years to pay off their student loans, starting at age 26 and ending at 45.

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Refinances erupt while mortgage rates stay at record lows

Mortgage rates are lounging at record lows, and refinance requests are booming — at their highest levels since shortly after the pandemic began, according to a pair of new reports.

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Consumer Financial Protection Bureau Launches Refreshed Website with a New Interactive Enforcement Database

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (Bureau) launched a refresh of its public website, The updated website will feature additional user functionality, an improved layout, more content, and easier access to information. Notably, the refresh will also include a new interactive enforcement database to help the public track the Bureau’s enforcement actions. Through these updates, the Bureau aims to increase transparency and make it easier for consumers and stakeholders to locate and access essential resources.

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Industry Events

RMAI 2021 Annual Conference – In Person and Virtual

Receivables Management Association International (RMAi)

Las Vegas, Nevada
February 08 - 11 , 2021

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