At a glanceWednesday, January 13, 2021

Collection Industry News At A Glance - January 13, 2021
Wednesday January 13, 2021
Mid Week Newsletter:
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Credit Card Debt Continues Its Pandemic Plunge

Credit card debt has continued to drop in the U.S., down to $978.8 billion in November, the Federal Reserve reports. The latest numbers are part of a steady decline since the beginning of the coronavirus pandemic in March. Credit card debt had hit a record high in February 2020, reaching $1.0943 trillion.

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Remitter appoints Dave Snow as Executive Vice President of Sales

Industry leader in AI powered digital communication payment recovery solutions, Remitter USA Inc, has today announced that Dave Snow will be joining their dynamic executive leadership team as Vice President of Sales. He joins Remitter with more than 10 years experience across the consumer finance and accounts receivable industries, having served in senior sales, business development and leadership roles at Spruce Finance, Counterpointe SRE and TrueAccord.  Dave is an inspiring leader who is committed to delivering solutions that work for consumers and businesses alike. 

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Mortgage refinance demand spikes 20% as borrowers fear missing out on record-low rates

After setting more than a dozen record lows last year, mortgage rates began 2021 on an upward climb, and that lit a fire under borrowers, fearing they might miss the last of the lowest rates. Mortgage applications to refinance a home loan spiked 20% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. That was the highest level since last March. Volume was 93% higher than a year ago.

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Potential Major Change For U.S. Prepaid Products: Paypal VS CFPB Court Vacates Two Significant Restrictions in CFPB’S Prepaid Account Rule

On 30 December 2020, the United States District Court for the District of Columbia entered an order invalidating two provisions of the “Prepaid Account Rule” (the Rule) promulgated by the Consumer Financial Protection Bureau (CFPB). Specifically, the order invalidated the Rule’s mandatory short form disclosure requirement and the requirement for a thirty-day delay before linking prepaid products to credit, on the basis that the CFPB had exceeded its statutory authority.[1] 

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9 Ways The Recent Stimulus Bill Affects Bankruptcy

In an effort to resolve divergent court rulings, the new Consolidated Appropriations Act gives the Small Business Administration discretion to determine which small and individual debtors may obtain PPP loans in bankruptcy 

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U.S. banks cast wary eye at mortgage borrowers as forbearance periods end

(Reuters) - U.S. banks are struggling to understand how their residential mortgage portfolios will perform this year, because borrower-assistance programs during the pandemic have clouded who will be able to pay when forbearance periods and enhanced jobless benefits expire.

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LAFCU Names James McHale As Chief Financial Officer

LANSING, Mich. — James McHale has joined LAFCU as chief financial officer.    McHale has more than 20 years of executive experience with small-to-large credit unions. Positions he has held include CFO, COO, CEO and chief risk officer.

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California Credit Union Seeks Scholarship Applications from Los Angeles County Students

GLENDALE, Calif.Jan. 12, 2021 /PRNewswire/ -- California Credit Union invites college-bound students in Los Angeles County to apply for its 2021 College Scholarship Program. Through the program, the credit union provides $20,000 in scholarships annually to recognize Southern California students who are motivated in their academic studies and active in their schools and communities.

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CFPB Accepting Applications for Advisory Committee

From the CFPB: To ensure that the CFPB hears from a variety of external experts with diverse viewpoints, we established the Consumer Advisory Board, the Community Bank Advisory Council, the Credit Union Advisory Council, and the Academic Research Council. These advisory committees provide the Bureau with information about emerging trends and practices in the consumer financial marketplace. They also allow us to hear directly from small financial institutions.  Starting Monday, January 11, we’re accepting applications for membership on all four of our advisory committees. We’re inviting applications from individuals who can provide us with insight and advice as we carry out our work.

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CFPB investigating Rocket Homes for illegal kickbacks

Rocket Homes Real Estate, a real estate affiliate of Rocket Companies, is being investigated by the Consumer Financial Protection Bureau (CFPB) for possibly violating the Real Estate Settlement Procedures Act (RESPA) when it charged fees for referring Quicken’s mortgage clients to real estate agents, according to officials.

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FCC Issues Call Volume and Opt-Out Rules for Calls Exempted From TCPA’s Consent Requirements

Over the years, the FCC has established a number of exemptions to the TCPA’s prohibition on unconsented autodialed and pre-recorded or artificial voice calls. Last year, Congress directed the FCC under the TRACED Act to revisit those exemptions to ensure each exemption delineates: (1) the classes of parties that may make such calls; (2) the classes of parties that may be called; and (3) the number of calls that may be made to a particular called party. On December 30, 2020, the FCC issued a Report and Order addressing its obligations under TRACED.

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PPP loan program reopens with revamped rules to stamp out fraud

The government on Monday was set to reopen its signature small business pandemic aid program with $284 billion in new funds and revamped rules that aim to get cash to the most needy businesses while stamping out fraud and abuse.

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Mortgage refinances now come with a new fee — but you can still get a deal

As mortgage rates have fallen through the floor again and again, borrowers have been hitting the interest rate jackpot. Even so, if you’re looking to score an ultra-low rate to refinance an existing home loan, you might find it a little harder than you might imagine. A new federal refinance fee has finally gone into effect, after many months of anticipation, and experts say lenders are rolling the cost into their mortgage rates.

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United States: The CFPB Revises Reg. Z’s Qualified Mortgage Loan Criteria In Anticipation Of The GSE Patch’s Expiration

In anticipation of the "GSE patch" expiring, the Consumer Financial Protection Bureau ("CFPB") issued several final rules in 2020 to amend Regulation Z ("Reg. Z"). Concerns have existed that the expiration of the GSE patch would restrict consumer mortgage credit unless the CFPB created a permanent version of the GSE patch or revised the General Qualified Mortgage ("QM") definition. As outlined below, the CFPB has responded by adopting the latter approach.

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Minnesota residents have the highest average credit score—here’s how other states compare

The average FICO Score in the U.S. hit a record high of 710 last year, according to Experian’s 2020 Consumer Credit Review. And a majority of states (33) managed to achieve or surpass this record high. Minnesota residents topped the list for the ninth straight year with an average 739 credit score. Meanwhile, Mississippi residents continued to have the lowest credit score of any state (675) — though that’s an eight-point increase from last year (667).

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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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Industry Events

RMAI 2021 Annual Conference – In Person and Virtual

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May 12 - 14 , 2021

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