At a glanceFriday, December 11, 2020

Collection Industry News At A Glance - December 11, 2020
Friday December 11, 2020
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Kraninger Marks Second Year as Director of the Consumer Financial Protection Bureau

WASHINGTON, D.C. – Today, Consumer Financial Protection Bureau (Bureau) Director Kathleen L. Kraninger made the following statement regarding her second-year anniversary leading the Bureau:   “In these challenging times, I’m proud of the work that the Bureau has undertaken to protect consumers during the pandemic,” said CFPB Director Kraninger.

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Payment Processor and its Former CEO Pay $1.5 Million to Settle FTC Charges They Facilitated Fraud

Complete Merchant Solutions, LLC (CMS) and its former CEO, Jack Wilson, have settled Federal Trade Commission charges that they illegally processed millions of dollars in consumer credit card payments for fraudulent schemes when they knew or should have known that the schemes were defrauding consumers. 

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Despite tough economic climate, credit card debt drops by 9% according to Experian

This has been a year unlike any other, and so it’s not entirely surprising that many Americans have changed the way they use credit cards. Millions of Americans filed for unemployment in 2020, and millions more shifted from commuting to an office daily to working from home full-time as a result of the pandemic. Stay-at-home orders across the country means that people are dining out, shopping and traveling less. And as a result, many have seen significant changes to their daily spending. And these changes are having a positive impact on their credit usage.

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U.S. consumer watchdog finalizes new mortgage rules

WASHINGTON (Reuters) - The U.S. consumer watchdog on Thursday finalized two rules relaxing mortgage-lending requirements regarding a borrower’s ability to repay, in a bid to boost the range of products available to lower-income, riskier customers.

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Consumer credit originations could rebound by mid 2021 -report

Dec 10 (Reuters) - After economic uncertainty due to the coronavirus pandemic sent credit card originations to a 10-year low, one major credit reporting bureau is predicting that demand will bounce back.

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Weltman, Weinberg & Reis Co., LPA Elects Charles Pona as Managing Partner

CLEVELAND — December 9, 2020 — Weltman, Weinberg & Reis Co., LPA, a full-service creditors' rights law firm in its 90th year of client service, is pleased to announce the election of Shareholder Charles (Chuck) Pona as the new firmwide Managing Partner. 

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Consumers are spending more in 2020 than they did in 2019, says Bank of America CEO

Consumers are spending more via Bank of America accounts this year, in the midst of the coronavirus pandemic, than they did in 2019, according to CEO Brian Moynihan. “When you look at what they’re spending year-to-date, they’ve spent more in 2020 than they did in 2019, and that is now across $2.7 trillion in money moved by our consumers,” Moynihan told CNBC’s Wilfred Frost in a Wednesday interview.

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On-Demand Pay: What Does the CFPB Have to Say About It?

Over the years, consumers have become accustomed to getting what they want when they want it, usually by doing no more than clicking a few buttons. They can watch new shows by the season, get same day shipping from marketplaces like Amazon, and order groceries online for immediate delivery.

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CFPB issues consent order against Washington Federal for HMDA reporting violations

The Consumer Financial Protection Bureau issued a consent order against Washington Federal Bank in October for Regulation C and Home Mortgage Disclosure Act violations. The bank will pay a $200,000 fine for reporting inaccurate HMDA data in 2016 and 2017 — with error rates up to 40% in some cases, according to the CFPB.

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CFPB Issues Consent Order for Debt Collector

The Consumer Financial Protection Bureau issued a consent order Dec. 8 for RAB Performance Recoveries LLC (RAB), according to a news release . Through 2012, RAB, a New Jersey company, reportedly purchased and collected consumer debts from debt brokers, and through August 2014, it used collections law firms to obtain judgments against consumers, according to the CFPB, which states RAB’s actions are in violation of the Fair Debt Collection Practices Act and the Consumer Financial Protection Act of 2010.

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Consumer Financial Protection Bureau Sues Debt Collector BounceBack, Inc.

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against BounceBack, Inc. for allegedly engaging in deceptive and otherwise unlawful debt collection acts or practices. BounceBack, based in Kansas City, Missouri, operates bad-check pretrial-diversion programs on behalf of more than 90 district attorneys’ offices throughout the United States. The Bureau alleges that in the course of implementing this program, BounceBack violated the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act of 2010 (CFPA). The Bureau’s complaint seeks injunctions against BounceBack, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of a civil money penalty.

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CFPB sues LendUp for allegedly violating Military Lending Act

The CFPB said LendUp's violations of the MLA include extending loans with a military annual percentage rate (MAPR) exceeding the MLA's cap, extending loans requiring borrowers to submit to arbitration and failing to make certain required loan disclosures, including a statement of the applicable MAPR.

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These states have the highest debt burdens

Southern states are facing the highest burden of credit card debt during 2020, and Louisiana residents have the biggest burden of all, a recent survey found. For the Pelican State, the average household carries $7,940 in credit card debt and earns a median income of $51,073, according to the data released Monday. If residents pay off debt with 15% of earnings, it would take a Louisiana credit cardholder 15 months to absolve their debt, while paying $1,013 in interest, analysts noted.

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Here’s the average debt Americans have by loan type

Consumer debt reached a record high in 2019, according to data by Experian, one of the three national credit bureaus. And while the average consumer’s debt as a percentage of their income has decreased since the financial crisis, balances have grown, in some cases significantly.

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Consumer Financial Protection Bureau Settles with Debt Collector for Engaging in Deceptive Debt Collection Practices in Three States

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (Bureau) issued a consent order against RAB Performance Recoveries, LLC (RAB) for threatening to sue and suing consumers to collect debts where it did not have a legally required license to do so. Through 2012, RAB, a New Jersey company, purchased and collected consumer debts from debt brokers, and through August 2014, it used collections law firms to obtain judgments against consumers. RAB has continued to collect on those judgments against consumers as well as on a handful of payment agreements it obtained from debtors. 

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Securing Work-From-Home Devices

The outbreak of the COVID-19 pandemic resulted in lockdown measures that were imposed to contain the spread of the virus, which included a freeze on commuting to the office to work in person for almost everyone but essential workers. as the manufacturing, logistics and trade industries. 

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New Report Shows Global Growth of Fintech in 2020

This past summer the team from the Cambridge Centre for Alternative Finance (CCAF) in partnership with the World Bank and the World Economic forum embarked on the most ambitious research study in the history of fintech. They wanted to gather empirical data on the impact that Covid-19 was having on the fintech world. So, they sent out a survey to thousands of fintech companies in 190 countries.

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TCN to donate over 40,000 meals to various food banks for Christmas.

St. George, Utah – Dec. 8, 2020TCN, Inc., a leading provider of cloud-based call center technology for enterprises, contact centers, BPOs, and collection agencies worldwide, makes a substantial donation to the Utah Food Bank on behalf of their clients.

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Tenant Background Report Provider Settles FTC Allegations that it Failed to Follow Accuracy Requirements for Screening Reports

A California-based company that provides background reports to property management companies will pay $4.25 million as part of a settlement with the Federal Trade Commission over allegations the firm failed to follow reasonable procedures to ensure the accuracy of its reports about potential tenants.

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LinkedIn Phishing Scams Most Clicked With a 47% Open Rate in Q3 2020

According to data presented by the Atlas VPN team, emails impersonating LinkedIn were the most clicked on social media phishing attacks, with a 47% open rate in the third quarter of this year. The numbers are based on research by KnowBe4, which examined tens of thousands of email subject lines from simulated phishing tests in Q3 2020 based on real phishing attack data.

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Mortgage Credit Availability Ticks Up In November 2020

The Mortgage Bankers Association's Mortgage Credit Availability Index reported an increase in credit availability in November 2020. The MCAI increased by 0.7% to 122.2 in November, which signifies a loosening of credit, according to the report.

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Mr. Cooper settles $90M lawsuit over illegal foreclosures

Mr. Cooper, the nation’s largest nonbank servicer of mortgage loans, will refund customers nearly $90 million and pay a civil penalty of more than $6.5 million to settle a lawsuit claiming it violated the rights of over 115,000 customers, some of whom it had illegally foreclosed on.

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Federal student loan payments suspended until end of January

(Reuters) - U.S. Secretary of Education Betsy DeVos on Friday said the suspension of federal student loans payments and accruing interest set to end on Dec. 31 will be extended another month as the pandemic presents financial challenges to borrowers.

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Consumer Financial Protection Bureau and Multiple States Enter into Settlement with Nationstar Mortgage, LLC for Unlawful Servicing Practices

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (Bureau) filed a complaint and proposed stipulated judgment and order against Nationstar Mortgage, LLC, which does business as Mr. Cooper (Nationstar). The Bureau’s action is part of a coordinated effort between the Bureau, a multistate group of state attorneys general, and state bank regulators. The Bureau alleges that Nationstar violated multiple Federal consumer financial laws, causing substantial harm to the borrowers whose mortgage loans it serviced, including distressed homeowners.

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Capital One stops ‘risky’ buy-now-pay-later credit card transactions

SYDNEY (Reuters) - Capital One Financial Corp (CapOne) has barred customers using its credit cards to clear buy-now-pay-later (BNPL) debt as the transactions bear unacceptable risk, it told Reuters, making it the first to distance itself from the finance alternative.

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CFPB adds five to its leadership team

The Consumer Financial Protection Bureau (CFPB) has added five people in various leadership positions, including chief operating officer. Additions are Matthew Bettenhausen, Chris Chilbert, Janis Pappalardo, Donna Roy, and Deborah Royster.

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Consumer Financial Protection Bureau Sues LendUp Loans, LLC for Allegedly Violating the Military Lending Act

WASHINGTON, D.C. Today, the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against LendUp Loans, LLC (LendUp). The Bureau alleges that LendUp violated the Military Lending Act (MLA) in connection with its extensions of credit. LendUp, which has its principal place of business in Oakland, California, is an online lender that offers single-payment and installment loans to consumers. The Bureau’s complaint, filed in the United States District Court for the Northern District of California, seeks an injunction, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.

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Attorney General Becerra Announces $210 Million Settlement Against Dish Network for Illegal Telemarketing

SACRAMENTO – California Attorney General Xavier Becerra today announced a $210 million multistate settlement against Dish Network (Dish), concluding an 11-year legal dispute over the company’s illegal telemarketing campaigns. In 2017, a district court found Dish violated telemarketing laws through millions of illegal telemarketing calls to sell and promote its satellite TV services and programming packages, including unwanted robocalls to thousands of people registered on the Do Not Call registry, many of them Californians. Under the terms of today’s settlement, California will receive $39.9 million.

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Reverse Mortgage Lending Limit Rises to Over $822k in 2021

The lending limit for federally-backed reverse mortgages is increasing for the fifth consecutive year in a row, set to hit $822,375 in 2021. The Department of Housing and Urban Development (HUD) announced on Wednesday via Mortgagee Letter (ML) 2020-42 a maximum claim amount of $822,375 for calendar year 2021, a rise of $56,775 from the $765,600 limit governing the Home Equity Conversion Mortgage (HECM) program in 2020.

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Intuit Completes Acquisition of Credit Karma

MOUNTAIN VIEW, Calif.--()--Intuit (Nasdaq: INTU), proud maker of TurboTax, QuickBooks and Mint, today announced that it has completed its acquisition of Credit Karma, Inc., the consumer technology platform with more than 110 million members in the U.S., Canada and U.K. The combined company creates a new consumer finance platform that will make it simple for consumers to make better decisions with their money and take control of their financial lives.

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Large credit unions deepen their stake in PPP lending

Paycheck Protection Program loans made up a significant portion of the loan portfolios at four of the top credit union lenders in this area during the third quarter. These loans made up at least 15% of the portfolios at Self-Help Federal Credit Union in Durham, N.C., Notre Dame Federal Credit Union in Indiana, Vibrant Credit Union in Moline, Ill., and Greater Nevada Credit Union in Carson City, according to a new analysis by S&P Global Market Intelligence.

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P2P lending spikes in the spring

The volume of loans funded on European peer-to-peer lending platforms spikes during springtime, new analysis has found. According to research by Croatia-based P2P lending platform, there are similar surges in lending during the months of October and January. After collating the monthly growth rate of loans across a number of European P2P platforms, found a 7.2 per cent increase in lending volumes during the spring.

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Experian Launches “United for Financial Health” to Uplift and Empower Vulnerable Consumers

LONDON--()--The world’s leading information services provider, Experian, has today announced the launch of a new global project that aims to empower vulnerable consumers so they can improve their financial health through education and action.

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Industry Events

RMAI 2021 Annual Conference – In Person and Virtual

Receivables Management Association International (RMAi)

Las Vegas, Nevada
April 12 - 15 , 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