At a glanceFriday, January 08, 2021

Collection Industry News At A Glance - January 8, 2021
Friday January 8, 2021
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Bringing it All Together: What Callers in Each Industry Need to Know (Right Now) About the FCC’s Big Late-2020 Rulings on the TCPA and Carrier Call Blocking

You’ve read the coverage on TCPAWorld—the FCC issued two huge rulings in late 2020. One dialed back protections afforded under certain content-specific exemptions to the TCPA. And the second mandated carriers cooperate with Robocall Traceback efforts and set the stage for real-time call blocking notifications and an effective redress mechanism for erroneously blocked calls (but not mislabeling).

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Cybersecurity: This ‘costly and destructive’ malware is the biggest threat to your network

A spam campaign which targeted over 100,000 users a day over Christmas and New Year has seen Emotet secure its spot as the most prolific malware threat. Analysis by cybersecurity company Check Point suggests that Emotet was used to target seven percent of organisations around the world during December. Emotet has been active since 2014 and is regularly updated by its authors in order to maintain its effectiveness. The malware started life as a banking trojan but has evolved to become much more than that, providing a complete backdoor onto compromised machines which can then be sold on to other cyber criminals to infect victims with additional malware – including ransomware.

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How FinTech lending has become more customer-centric in era of technological advancements

Our financial sector has come a long way from where it was a decade ago. Back then, the processing of anything from a 'new bank account’ to ‘loan application’ took anywhere from several weeks to months. Even something as simple as a ‘cash withdrawal could easily take a few hours – half an hour on your lucky days.

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Economy loses 140K jobs in December, first losses since April

The economy lost 140,000 jobs in December, the first reported losses since April, as the unemployment rate remained steady at 6.7 percent.   Economists expected a small jobs gain of nearly 50,000. The drop is the latest sign of a weakening economy amid the ongoing COVID-19 crisis. All in all, the economy remains about 10 million jobs below its pre-pandemic levels.

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That $600 second stimulus payment might not arrive if you changed banks

The latest round of $600 stimulus checks is on the way. Meanwhile, many have already arrived for millions of Americans. But for people who recently changed their bank account information, that payment might not come at all.

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How to remove a cosigner from a student loan by refinancing

Private student loans can close a funding gap for students who need to borrow to pay for a degree. According to MeasureOne's Private Student Loan Report, 91.25% of undergraduate loans were cosigned during the 2020-21 academic year. Having a cosigner can make it easier to qualify for private student loans when you lack sufficient credit history to get approved on your own. However, becoming a cosigner can have financial implications for parents or guardians since they're equally responsible for the debt. The good news is there are ways to take the financial burden off your parents' shoulders if they cosigned on your behalf.

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Which debts can’t be discharged in bankruptcy?

Like all debt, when it comes to bankruptcy it depends on which chapter you file under. Chapter 7 will discharge credit card debt almost immediately. Chapter 13 will reorganize your debts (likely including your credit card debt), so that at least a portion of that debt will be repaid over time. Once you have repaid the portion of your debts required by the court and based on your income and expenses, the remainder is discharged.

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Prepare to Be Licensed. California Enacts a Law to License Debt Collectors, But Much Needs to Be Done to Clarify the Licensing Obligations

Every so often, the extent of state laws providing for the licensing of collection agencies needs to be re-examined. As every state, including two of the most prominent states, California and New York, historically had not licensed collection agencies,1 the state licensing of collection agencies has not been given as much attention as has been given to the state licensing of other consumer finance activities. This changed in September 2020, when the California legislature, shortly before adjournment, enacted Senate Bill 908 to license debt collectors under a new law called the Debt Collection Licensing Act (the “DCLA”).2

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Remitter USA Inc. announces Larry Chiavaro as new CEO

January 2021, Remitter USA Inc, industry leader in AI powered digital communication solutions used to improve payment recovery, is thrilled to announce that Larry Chiavaro will head up its impressive executive leadership team as Chief Executive Officer.  Mr Chiavaro is a dynamic sales and business development executive with over 30-years’ experience in identifying and developing growth in the consumer finance industry. Most recently, Larry was the Co-Founder and Executive Vice President of First Associates Loan Servicing / Vervent, building the company into the largest 3rd party consumer loan servicer in the U.S. from 6 employees to over 800.

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The next round of PPP loans will soon be available. Here’s what you need to know to apply

Small businesses hit by the pandemic recently got some good news – the $900 billion relief act signed into law by President Donald Trump granted additional funding for the Paycheck Protection Program, a forgivable loan program established by the CARES Act.

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New York leads states’ push to overturn OCC’s ‘rent-a-bank’ rule

A coalition of Democratic-led states sued federal bank regulators on Tuesday over recently enacted rules that hinder states’ power to cap interest rates on consumer loans. The lawsuit accuses the Office of the Comptroller of the Currency of unlawfully attempting to facilitate predatory lending by defanging state usury laws. That argument has parallels to the claims that various states made against federal banking regulators during the run-up to the subprime mortgage crisis.

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Federally Chartered Banks Can Use Stablecoins: OCC

The Office of the Comptroller of the Currency (OCC) has issued an interpretive letter allowing federally chartered banks to use stablecoins, or cryptocurrencies with relatively stable prices, for standard banking transactions like payment activities. The letter further states that banks can participate in validating stablecoin transactions or Independent Node Verification Networks (INVN) in a blockchain.

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Housing industry, consumer groups clash on CFPB taskforce results

A taskforce established by the Consumer Financial Protection Bureau to examine the existing legal and regulatory environment facing consumers and financial services providers released its recommendations this week – a move that prompted conflicting reactions from the housing industry and consumer groups. The CFPB announced back in 2019 that it plans to “periodically” review its regulations and may amend or even abolish existing rules. According to the CFPB, the review of its rules is stipulated by the Regulatory Flexibility Act, which establishes that agencies should review certain rules within 10 years of their enactment and consider those rules’ impact on “small businesses.”

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More Than Half of US Companies Are Under Financial or Operational Stress and 14% Are in Distress as Pandemic’s Economic Impact Deepens

BOSTONJan. 6, 2021 /PRNewswire/ -- More than seven months into the novel coronavirus pandemic, a disturbingly large number of US companies are at risk, according to new research from Boston Consulting Group (BCG) confirming that economic distress is deeply entrenched and shows no sign of letting up.

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Several U.S. states sue banking regulator over ‘true lender’ rule

NEW YORK (Reuters) - Seven U.S. states and Washington, D.C., sued a U.S. banking regulator on Tuesday, seeking to void a rule they said could encourage predatory lending by preventing them from enforcing state laws against exploitative interest rates.

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U.S. bankruptcy filings hit 35-year low thanks to government pandemic aid

WASHINGTON (Reuters) - U.S. bankruptcy filings for 2020 hit their lowest level since 1986 as a flood of government support programs offset at least temporarily the full brunt of the coronavirus pandemic and a related recession, Epiq AACER reported on Friday.

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2021 Cybersecurity Trends: Bigger Budgets, Endpoint Emphasis and Cloud

After shrinking in 2020, cybersecurity budgets in 2021 climb higher than pre-pandemic limits. Authentication, cloud data protection and application monitoring will top the list of CISO budget and cybersecurity priorities. According to experts, these are just a few of the themes to dominate the year ahead.

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Attorney General Becerra Challenges OCC Rule That Facilitates Predatory Lending Schemes

SACRAMENTO – California Attorney General Xavier Becerra today joined a multistate lawsuit against the Office of the Comptroller of the Currency (OCC) challenging its “True Lender Rule.” The OCC’s rule facilitates predatory lending by allowing payday lenders, auto-title lenders and other non-bank entities to evade state limits on loan interest rates through sham "rent-a-bank" arrangements with national banks. California limits interest rates to 36 percent on consumer loans under $10,000. To circumvent California law, the predatory non-bank lenders “partner” with national banks that are shielded from state rate caps. The OCC’s True Lender Rule enables rent-a-bank schemes that often hike interest rates on borrowers to 100 percent or higher. 

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With the California Consumer Financial Protection Law in Effect, the DFPI Prepares to Better Protect Consumers and Foster Financial Innovation

SACRAMENTO – With the new California Consumer Financial Protection Law now in effect, the Department of Financial Protection and Innovation (DFPI) will exercise expanded powers to better protect consumers from unlawful, unfair, deceptive, and abusive practices.

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Katabat Expands Product Reach by Acquiring Simplicity Collection Software

January 5, 2021, Wilmington, DE – Katabat, a leading global provider of debt management software solutions for lenders, fintechs, and collection agencies, announced today that it has acquired Simplicity Collection Software of Idaho Falls, Idaho. The acquisition aligns with and accelerates Katabat’s vision to be the dominant provider of debt collection software products for global consumer lenders and third-party agencies. Terms of the transaction were not disclosed.

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Consumer Financial Protection Bureau’s Taskforce on Federal Consumer Financial Law Releases Its Report

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) Taskforce on Federal Consumer Financial Law (Taskforce) released a report today with recommendations on how to improve consumer protection in the financial marketplace. The Taskforce Report uses five interrelated principles that serve as the foundation for proposed systematic changes to the current legal and regulatory framework: consumer protection, information and education, competition and innovation, regulatory modernization and flexibility, and inclusion and access.

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Interest in divorce loans jumps during coronavirus pandemic

The coronavirus pandemic hasn’t been great for love. It derailed weddings and honeymoons — and some married couples are so eager to split that they’re looking to take out loans to fund divorces. The number of inquiries to fund a divorce that Loanry received was up 62% through November 2020 compared with all of 2019, according to the online loan marketplace company after analyzing search divorce-related queries it received from Google during those periods. The company’s data, broken down by state, also indicated that the largest divorce inquiry increases came from Tennessee, Texas, and Georgia.

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Student loan interest rate forecast for 2021: Rates are unlikely to rise

The COVID-19 crisis caused many Americans to fall into physical or financial hardship in 2020. As a result, student loan interest rates fell to historic lows, largely in part due to the Federal Reserve slashing interest rates as an attempt to stimulate the economy.

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CFPB Issues Compliance Sandboxes for Dual Usage Credit Cards, Wage Access

The Consumer Financial Protection Bureau on Dec. 30 issued two compliance assistance sandboxes: one for dual usage credit cards and another for employee access to earned but unpaid wages. CFPB compliance sandboxes provide a safe harbor for banks to test products or services that have been approved by the bureau.

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PayPal Wins Prepaid Card Regulation Lawsuit Against CFPB

FinTech giant PayPal has won a lawsuit against the U.S. Consumer Financial Protection Bureau (CFPB) pertaining to rules regarding prepaid cards and digital wallets, Westlaw Today reportedU.S. District Judge Richard Leon in Washington, D.C. invalidated part of the CFPB’s mandate, essentially agreeing with PayPal that the agency went beyond its jurisdiction. PayPal filed the suit in December 2019 under the Administrative Procedure Act (APA), contesting a 2019 rule regulating prepaid cards and electronic wallets. 

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CFPB Settlement Imposes $4.75 Million Penalty for Alleged FCRA Violations

On December 22, 2020, the Consumer Financial Protection Bureau (CFPB) issued a consent order that imposed a $4,750,000 civil money penalty against “a leading originator and servicer of nonprime auto loans and leases” that furnished credit information on the auto loans it serviced to Consumer Reporting Agencies (CRAs) to address alleged violations of the federal Fair Credit Reporting Act (FCRA), according to a press release from the CFPB.

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January 5, 2021 Release of the Taskforce on Federal Consumer Financial Law Report

In January 2020, CFPB Director Kathleen Kraninger announced the appointment of five members to serve on the Bureau’s Taskforce on Federal Consumer Financial Law (Taskforce). The Taskforce was charged with examining ways to harmonize and modernize federal consumer financial laws and given a year to submit a report of their findings and recommendations to the Director.

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U.S Mortgage Rates Rise in the Final Week of the Year

Mortgage rates failed to fall to a 17th record low of the year, with 30-year fixed rates on the rise in the final week of the year. 30-year fixed rates rose by 1 basis point to 2.67% in the week ending 31st December.

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Coronavirus relief bill makes it easier for companies to pay down workers’ student loans

Student loan assistance, which started as a niche offering by a handful of companies, was already finding its way into the mainstream menu of workplace benefits before Covid hit. The pandemic may only accelerate the trend.

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What we know about the new PPP loans for small businesses

SACRAMENTO, Calif. — Small businesses struggling from the COVID-19 shutdowns are getting another round of financial help with the latest spending bill passed by Congress. Of the $900 billion approved for COVID-19 relief, $284 billion is slated for the Paycheck Protection Program, with some changes.

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Some Pandemic Protections for Consumers Could Become Permanent

Consumer complaints to federal and state agencies exploded this year, fueled by a global crisis that financially stressed millions of Americans and disrupted thousands of businesses’ normal operations. Now state legislators and consumer advocates across the country are pushing for permanent protections to address the gaps in consumer law exposed by the pandemic.

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(713) 776-6605

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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