At a glanceWednesday, January 20, 2021

Collection Industry News At A Glance - January 20, 2021
Wednesday January 20, 2021
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Consumer bureau director resigns after Biden’s inauguration

Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger resigned Wednesday at the request of the newly sworn-in President Biden, clearing the way for his nominee to lead the powerful regulatory agency.  "As requested by the Biden administration, today I resigned as Director of the CFPB. I am proud of all that we accomplished on behalf of consumers. It has been an honor to lead the agency during these challenging times" Kraninger tweeted.

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California’s revamped consumer protection agency subpoenas debt collectors, signaling more regulation in Biden era

The California Department of Financial Protection and Innovation (DFPI), using new oversight and enforcement authority under the California Consumer Financial Protection Law that went into effect on January 1, issued subpoenas to the companies after receiving consumer complaints.   The companies subpoenaed in this latest investigation were Portfolio Recovery Associates, LLC; Encore Capital Group; Midland Credit Management, Inc.; Midland Funding, LLC; Atlantic Credit and Finance, Inc.; Enhanced Recovery Company LLC; Resurgent HP LLC and LVNV Funding LLC; IC System, Inc.; The Offices of Morgan and Moss; Convergent Outsourcing, Inc.; Spectrum Billing Services; and Monterey Financial Services LLC.

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Under government pressure, big U.S. lenders rush to launch more pandemic loans: sources

WASHINGTON (Reuters) - The U.S. government is pressuring large lenders to go live this week with another round of a key federal pandemic loan program despite many unresolved issues, sparking an industry scramble to get lending platforms ready, five people familiar with the discussions said.

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CFPB exempts some credit unions from escrow regulations

The Consumer Financial Protection Bureau announced Tuesday some insured depository institutions and insured credit unions will now be exempt from regulations to establish escrow accounts for some higher-priced mortgage loans. The final rule will take effect upon publication in the Federal Register, and will exempt the HPLM escrow requirement for any mortgage made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if all three of the following criteria are met:

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CFPB clarifies role of supervisory guidance

The Consumer Financial Protection Bureau issued a final rule Tuesday clarifying that supervisory guidance is not backed by the same force as law or regulation. First proposed in October 2020, the CFPB’s final rule codifies the statement, with amendments, that the Bureau and other federal financial regulatory agencies issued in September 2018, which clarified the differences between regulations and supervisory guidance. In 2018, five federal agencies issued a joint statement explaining the role of supervisory guidance for regulated institutions.

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Consumer Financial Protection Bureau Issues Final Rule on the Role of Supervisory Guidance

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) issued today a final rule regarding the Bureau’s use of supervisory guidance for its supervised institutions. The rule codifies the statement, with amendments, that the Bureau and other federal financial regulatory agencies issued in September 2018, which clarified the differences between regulations and supervisory guidance.

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Consumer Financial Protection Bureau Settles with LendUp Loans, LLC for Military Lending Act Violations

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (Bureau) filed a proposed settlement to resolve its December 4, 2020 lawsuit against LendUp Loans, LLC (LendUp) alleging violations of the Military Lending Act (MLA). Today’s action is the first resolution in the Bureau’s broader sweep of investigations of multiple lenders that may be violating the MLA. LendUp, which has its principal place of business in Oakland, California, is an online lender that offers single-payment and installment loans to consumers.

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Consumer Financial Protection Bureau Issues Rule on Higher-Priced Mortgage Loan Escrow Exemption

WASHINGTON, D.C. – The Bureau of Consumer Financial Protection (Bureau) today issued a final rule to implement a requirement of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The final rule exempts certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs).

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Consumer Financial Protection Bureau Announces Partnerships with Communities Across the Country to Promote Financial Resiliency

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today announced that it will partner with seven communities across the country to help build financial resiliency among Americans. The partnerships, part of the Bureau’s Start Small, Save Up initiative, aim to increase the number of people having sufficient liquid savings by testing new approaches as well as identifying existing approaches that can assist Americans to become more financially secure.

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FTC Publishes Annual Performance Report

The Federal Trade Commission published its Fiscal Year 2020 Performance Report as required under the Government Performance and Results Modernization Act of 2010. The report documents the progress made by the Commission in achieving the mission and performance goals established in the Fiscal Year 2020-2021 Performance Plan. Also, as required by the Government Performance and Results Modernization Act during a transition in administration, the Commission will submit its Fiscal 2021-2022 Performance Plan along with its Fiscal Year 2022 budget request in support of the President’s FY 2022 budget for the federal government later this year.

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CFPB slaps 1st Alliance Lending for illegal mortgage-origination practices

The Consumer Financial Protection Bureau (CFPB) has taken 1st Alliance Lending and three of its top executives to court for allegedly engaging in various illegal mortgage-lending practices.

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CFPB Changes Expected As Biden Administration Settles In

As reported, President-elect Joe Biden nominated Rohit Chopra, a commissioner at the Federal Trade Commission (FTC), to lead the Consumer Financial Protection Bureau (CFPB), replacing Kathy Kraninger as director (who remains in her post in a term that technically runs through 2023, but is likely to be replaced by Biden).

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Digital loans: Credit lending landscape in the post COVID-19 world

The COVID-19 pandemic isn’t over yet but we have hopefully moved beyond its worst phase and with several vaccines faring well in clinical trials, the hopes of the economies bouncing back have become strong. As a consequence of the coronavirus-induced lockdowns, credit uptake all around the world had witnessed a very lean period but momentum in economic activity has been recorded in the past few months. In fact, a recent market analysis suggests that credit lending is nearing 80 percent of its pre-COVID-19 level.

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Consumer Financial Protection Bureau Sues 1st Alliance Lending, LLC and Its Principals for Alleged Unlawful Mortgage Lending Practices

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against 1st Alliance Lending, LLC, John Christopher DiIorio, Kevin Robert St. Lawrence, and Socrates Aramburu for allegedly engaging in various unlawful mortgage-lending practices. 1st Alliance, based in Hartford, Connecticut, originated residential mortgages from 2004 to September 2019 and stopped operating in November 2019. DiIorio was its chief executive officer and he, St. Lawrence, and Aramburu were 1st Alliance’s three managing executives.

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Attorney General Becerra Sues U.S. Department of Education for Easing Oversight of For-Profit Colleges

SACRAMENTO – California Attorney General Xavier Becerra today announced a lawsuit against Acting U.S. Secretary of Education Mitchell Zais and the U.S. Department of Education (ED) over ED’s effort to ease oversight and accountability on for-profit colleges at the expense of students and taxpayers. ED’s recently finalized “Distance Education and Innovation” regulations allow colleges to bypass requirements set out in the Higher Education Act intended to prevent federal Title IV funds, including federal student loans and Pell grants, from going to low-quality educational programs and predatory for-profit institutions.

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CFPB Issues Small Entity Compliance Guide Summarizing October 2020 rule

The Bureau has issued a small entity compliance guide summarizing the October 2020 debt collection rule.  The guide is available here.

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OCC Finalizes Rule Requiring Large Banks to Provide Fair Access to Bank Services, Capital, and Credit

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today released its finalized rule to ensure fair access to banking services provided by large national banks, federal savings associations, and federal branches and agencies of foreign bank organizations.

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Anchorage Becomes First OCC-Approved National Crypto Bank

Crypto custodian Anchorage has secured conditional approval for a national trust charter from the U.S. Office of the Comptroller of the Currency (OCC), making it the first national “digital asset bank” in the U.S.

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Walmart launches fintech startup to build digital financial products for customers, employees

Walmart (WMT), the world's largest retailer, announced on Monday that it is launching a financial technology (fintech) startup in partnership with Palo Alto, Calif.–based venture capital firm Ribbit Capital, a backer of Robinhood, Credit Karma and Affirm.

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Civil Penalty Inflation Adjustments

The Bureau is adjusting for inflation the maximum amount of each civil penalty within the Bureau’s jurisdiction. These adjustments are required by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. 

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OCC Fines Former Wells Fargo General Counsel $3.5 Million in Settlement

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today announced it has assessed a $3.5 million penalty against James Strother for his role in Wells Fargo Bank, N.A.'s systemic sales practices misconduct.

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Consumer Financial Protection Bureau and National Credit Union Administration Sign Memorandum of Understanding

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) and the National Credit Union Administration (NCUA) announced a Memorandum of Understanding (MOU) agreement to improve coordination between the agencies related to the consumer protection supervision of credit unions over $10 billion dollars in assets.

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Buy now, pay later boom brings ‘shift away from credit to debit’

Americans are increasingly taking advantage of the buy-now, pay-later (BNPL) offerings thanks to a growing number of financial technology companies.

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Is the Pendulum Swinging the Other Way? Court Finds TCPA Claims Viable Prior to Severance of Government Backed Debt Exemption by Supreme Court

As the Czar reported in late December (here), the plaintiffs’ bar had evened the score (3-3) with two recent decisions finding that the TCPA was constitutional as applied to calls made prior to the Supreme Court’s decision in Barr v. American Ass’n of Political Consultants, 140 S. Ct. 2335 (2020), on July 6, 2020.  Unfortunately, plaintiffs have now pulled ahead with yesterday’s decision in Stoutt v. Travis Credit Union, 2021 U.S. Dist. LEXIS 6019 (E.D. Cal. Jan. 12, 2021).

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NCUA, CFPB sign memorandum of understanding

NCUA and the Consumer Financial Protection Bureau announced a memorandum of understanding agreement to improve coordination between the agencies related to the consumer protection supervision of credit unions over $10 billion dollars in assets.

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The CFPB Taskforce Recommends Limits On FCRA Class Action Awards In Report

On January 5, 2021, the Consumer Financial Protection Bureau’s Taskforce on Federal Consumer Financial Law Report issued a two-volume report on “how to improve consumer protection in the financial marketplace.”  The Taskforce, comprised of five members, was established in January 2020 and was charged with examining the consumer financial services environment and developing recommendations for improvement. 

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Remitter appoints Dave Snow as 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 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.

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Ag lending update: Fewer new loans to farmers

Fewer new loans to farmers continued to drive a pullback in agricultural lending activity. A historically low number of new loans contributed to an increase in average loan size and drove a slight decrease in the overall volume of non-real estate loans at commercial banks in the fourth quarter. Stronger prices for agricultural commodities, alongside continued support from government payments, may have reduced financing needs for some farmers and contributed to the slower pace of lending.

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Portfolios For Sale

 
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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

https://rmaintl.org/annual-conference-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