At a glanceFriday, March 19, 2021

Collection Industry News At A Glance - March 19, 2021
Friday March 19, 2021
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State Legislature Passes Senator Sanders’ Bill on Delinquent Mortgage Loans

The New York State Senate yesterday passed a bill (S.671 / A.1935) by a vote of 40-16 introduced by State Senator James Sanders Jr., the Chair of the Senate Committee on Banks. This legislation relates to modifying delinquent mortgage loans and single point of contact. 

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Sen. Pat Toomey Blocks Bill Protecting Stimulus Money from Debt Collectors, Says It’s Too Late

Republican Senator Pat Toomey (Pa.) has blocked a proposal from Senate Democrats to prevent debt collectors from garnishing the $1,400 stimulus checks included in President Joe Biden's American Rescue Plan.

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Mortgage rates just moved sharply higher, but homebuyer competition is fiercer than ever

Mortgage rates bounced higher again this week, making homebuying even more expensive at the start of the all-important spring market. With home prices skyrocketing, any rise in rates knocks even more potential buyers out of the running, and yet somehow the housing market is more competitive than ever.

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New York DFS Fines Mortgage Lender $1.5M for Failure to Report Cyber Breach

The New York State Department of Financial Services (DFS) announced its second enforcement action and first settlement under its cybersecurity regulations (23 NYCRR Part 500). At issue was a licensed mortgage lender's failure to report a "Cybersecurity Event" to DFS within 72 hours of its occurrence and failure to conduct a "comprehensive" cybersecurity risk assessment as mandated by the regulations.

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Despite more savings, American households still have a lot of debt

While some accrued more savings during the pandemic period, others took on more household debt such as mortgages and student and car loans. Recent data from the Federal Reserve Bank of New York shows the overall amount of household debt increased steadily in 2020.

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U.S. to erase $1 billion in debt for students scammed by for-profit colleges

Tens of thousands of U.S. student loan borrowers defrauded by for-profit colleges are getting debt relief. The U.S. Department of Education is cancelling $1 billion in debt held by about 72,000 student borrowers misled by institutions including the now-defunct Corinthian Colleges and ITT Technical Institute.

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CFPB Rescinds Short-Lived Guidance on Abusiveness Standard

On March 11, the Consumer Financial Protection Bureau (CFPB) announced the rescission of its January 24, 2020 policy statement entitled, "Statement of Policy Regarding Prohibition on Abusive Acts or Practices" (Prior Policy).1

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Consumer Advisory: Take action to protect your Economic Impact Payment if your account is overdrawn

If you are one of the millions of people who have received stimulus payments or will soon receive another round of payments (also known as Economic Impact Payments or EIPs), there may be steps you can take to ensure you have the full benefit of those funds by protecting them from bank and credit union setoff if your account is overdrawn.

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Education Department throws out Trump-era rule for defrauded students

The Education Department (ED) has thrown out a Trump-era rule that limited debt relief for 72,000 borrowers who had graduated from fraudulent for-profit colleges.

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Consumer Financial Protection Bureau Encourages Financial Institutions and Debt Collectors to Allow Stimulus Payments to Reach Consumers

WASHINGTON, D.C. – Consumer Financial Protection Bureau (CFPB) Acting Director Dave Uejio issued the following statement regarding consumers’ access to Economic Impact Payment (EIP) funds distributed through the American Rescue Plan:

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Fixed-rate student loan refinancing rates drop near low

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans into 10-year fixed-rate loans hit another low during the week of March 8, 2021. For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender, during the week of March 8:

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FCC cracks down on robocalls with record $225 million fine

The Federal Communications Commission fined two Texas-based telemarketers a record $225 million on Wednesday for making automated sales phone calls, or robocalls, in 2019. The marketers, under the business names Rising Eagle and JSquared Telecom, used robocalls to falsely sell short-term health insurance plans. They made about one billion robocalls, according to the FCC.

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How Much Debt Americans Have at Every Age

Borrowing increases buying power. Without credit and loans, the vast majority of Americans would not be able to buy a home, a car or even a major appliance like a refrigerator or washing machine. The tradeoff for that purchasing power, however, is debt—and debt is a fact of life for most families in the United States.

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Consumers Struggle as CFPB Complaints Break Records Report Finds

A review of consumer complaints filed with the Consumer Financial Protection Bureau (CFPB) last year tells the story of Americans navigating a fraught financial marketplace amid a pandemic. Complaints about problems with financial companies, including banks, credit bureaus and debt collectors, rose by 50 percent in 2020, setting new records each month of the year, according to a report from U.S. PIRG Education Fund.

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California Officials Announce California Privacy Protection Agency Board Appointments

SACRAMENTO – Governor Gavin Newsom, Attorney General Xavier Becerra, Senate President pro Tempore Toni G. Atkins (D-San Diego), and Assembly Speaker Anthony Rendon (D-Lakewood) today announced the establishment of the five-member inaugural board for the California Privacy Protection Agency (CPPA), a new administrative agency charged with protecting the fundamental privacy rights of consumers over their personal information. 

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1.8 Million May Lose Their Home: Why Forbearance is a Temporary Fix for America’s Backlog of Foreclosures

President Joe Biden directed federal housing regulators to extend mortgage forbearance programs for an additional six months and prolong foreclosure relief programs.

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Ohio Governor Signs Statute of Limitations Bill

Ohio Gov. Mike DeWine has signed a bill to reduce the statute of limitations (SOL) and it will take effect in 90 days.

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CFPB Takes Action Against Operators of An Unlawful Student Loan Debt-Relief Scheme

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today sued a student loan debt relief company, its owner, and manager for allegedly charging thousands of consumers more than $3.5 million in illegal upfront fees. The lawsuit filed in federal district court accuses California-based Student Loan Pro, Judith Noh, and Syed Gilani of violating the Telemarketing Sales Rule (TSR). FNZA Marketing, LLC, is also named as a relief defendant. Student Loan Pro, which operated from 2015 through 2019, provided federal student loan debt-relief services to consumers nationwide.

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Mortgage applications continue to fall as rates climb

Mortgage applications dropped for the second straight week — falling 2.2%, according to the latest report from the Mortgage Bankers Association. The continued increase in mortgage rates is to blame, according to MBA’s Associate Vice President of Economic and Industry Forecasting Joel Kan. Rates have jumped north of 3%, with most recent reports showing it hovering around 3.5%. New home applications are down as well, as builders are still suffering from missing construction crews and the skyrocketing price of lumber and building materials. Home prices in general are staying high, as well.

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Americans paid off $83 million in credit card debt in 2020

WASHINGTON (SBG) - Even as thousands of people lost jobs and businesses went under, the pandemic did have on unexpected financial upside in 2020. While some families used funds from stimulus checks to buy food or pay rent, millions of others used it to pay down debt. Before 2020, full time working mom and part time chef Autumn Perry-MacClaron was drawing in student loan debt.

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CFPB rescinds 2020 policy statement to better protect against abusive practices

The Consumer Financial Protection Bureau (CFPB) has rescinded a policy statement issued in January 2020 to better protect consumers from abusive acts or practices. Specifically, the CFPB rescinded its “Statement of Policy Regarding Prohibition on Abusive Acts or Practices.” CFPB officials said the 2020 policy statement was inconsistent with the bureau’s duty to enforce Congress’s standard. Rescinding it will better serve the CFPB’s objective to protect consumers from abusive practices.

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WebRecon Stats for Jan 2021: Lawsuit complaints ? down from 2020, ↕️ mixed from previous month…

It’s something, right? All three of the major statutes are down in January from where they were a year ago at this time: FDCPA (-24.3%), FCRA (-4.4%) and TCPA (-55.6%). Of course, FCRA and TCPA are both up over December 2020 (+3.1% and +23.2% respectively) and FDCPA is only down by .2%, so it is not terribly newsworthy.

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NRA Group Partners with Interactions to Drive Collections Industry Forward

FRANKLIN, MA – March 16, 2021: Interactions, one of the world’s largest standalone conversational artificial intelligence (AI) companies, today announced that NRA Group, a leading accounts receivable management (ARM) company, has deployed a sophisticated Interactions Virtual Collection Agent (VCA) in record time. Progressing from contract signature to first call in a few months, NRA Group is accelerating the impact of its REV-TECH™ channels using the VCA for dramatic improvements in efficiency and profitability.

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Mortgage forbearance ticks down to 5.14%

The industry is now less than two weeks away from the one-year anniversary of the CARES Act, which provided borrowers with federally backed mortgages the option to receive forbearance for up to 180 days. After many extensions and exits, the Mortgage Bankers Association estimates 2.6 million homeowners are still in some form of forbearance, though that number continues to slowly fall. As of March 7, servicers’ forbearance portfolio volume sits at 5.14% – down six basis points from the week prior.

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Fannie Mae Getting Stricter with Investment Property Loans

If you typically use conventional loans to finance your investments, take note: Starting April 1, it may get a lot harder. According to a letter sent by Fannie Mae (OTCMKTS: FNMA) to lenders this week, the GSE is delivering a one-two punch to investors, both tightening its lending standards on second home- and investment-backed loans, as well as cutting back purchases of these mortgages overall.

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ACA Supports Intent of Bill to Remove Paid Medical Debts from Consumers’ Credit Reports

U.S. Rep. Patrick McHenry reintroduces legislation seeking to improve consumers’ access to credit and amend the Fair Credit Reporting Act. The legislation, with some more research and clarification, could be beneficial for consumers and the accounts receivable management industry.

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DelBene Introduces National Consumer Data Privacy Legislation

Today, Congresswoman Suzan DelBene (WA-01) introduced the Information Transparency and Personal Data Control Act, legislation that would create a national data privacy standard to protect our most personal information and bring our laws into the 21st Century. 

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Senate Democrats plead with Biden to erase student debt with executive order

Senate Democrats on Monday urged President Joe Biden to use his executive powers to cancel up to $50,000 in student debt following the passage of the $1.9 trillion Covid-19 relief package, which included a provision to make student loan forgiveness tax-free until 2025.

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Attorney General Becerra Announces Approval of Additional Regulations That Empower Data Privacy Under the California Consumer Privacy Act

SACRAMENTO – California Attorney General Xavier Becerra today announced additional regulations approved by the Office of Administrative Law that advance protections for Californians seeking to control the sale of their personal information. The California Consumer Privacy Act (CCPA) gives consumers new tools and rights for protecting their data privacy.

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Defendants in Two Phantom Debt Cases Will Be Banned from Debt Collection Industry In FTC Settlement

Defendants in two Federal Trade Commission cases will be permanently banned from the debt collection industry as part of settlements resolving FTC charges they threatened consumers with legal action to collect on debts that did not exist.

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Will private student loans be forgiven? 3 ways borrowers can manage their debt now

If you have federal student loans, your monthly payments are on pause at least through September 30 thanks to President Joe Biden extended the loan payment suspension period soon after entering office. And while that can certainly provide some much-needed loan relief if a student loan borrower was suffering undue hardship related to the coronavirus pandemic, it’s not a permanent solution by any means — especially if you were struggling with student loan repayment before COVID-19.

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What Is FTC’s Course Under Biden?

The new acting FTC chair, Rebecca Kelly Slaughter, recently signaled that the FTC may increase enforcement and penalties in the privacy and data security realm. Slaughter pointed to several areas of focus for the FTC this year, which companies will want to keep in mind:

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FDIC and University of Santa Clara to Host ‘Big Data’ Webinar Series

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) and the University of Santa Clara today announced a series of public webinars to explore the opportunities and challenges in leveraging big data for the banking industry. Banking on Data: Great Possibilities, Great Responsibilities is a series of five webinars scheduled throughout the year to include industry leaders, academics and technologists on the use of new data analytics to improve the efficiency, competitiveness, and security of the nation’s banking and financial system.

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CFPB reverses course on UDAAP enforcement

Under former Director Richard Cordray, the Consumer Financial Protection Bureau took frequent action against companies who had violated its Unfair, Deceptive, and Abusive Acts and Practices standards. But many in the financial services industry complained that the standards were ambiguous and requested clarification from the bureau. In January of 2020, then-Director Kathy Kraninger provided that clarity, announcing that the bureau was changing its approach to enforcing its standards and limiting its own ability to pursue claims for abusive financial practices.

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It’s Time to Talk about Privacy and License-Plate Readers (Again)

They help catch criminals, but they also keep track of where you're going and when. A Washington Post investigation found few rules limiting how data is used. "The documents paint a startling picture of a technology deployed with too few rules that is becoming a tool for mass routine location tracking and surveillance," the ACLU said on its website. "As the technology spreads, the ACLU calls for the adoption of legislation and law enforcement agency policies adhering to strict privacy principles to prevent the government from tracking our movements on a massive scale."

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MINNEAPOLIS – DCM Services, LLC (“DCMS”) and its sister company, Forte, LLC, the industry leaders in data and contact management solutions for the estate and specialty receivables recovery market, celebrate the launch of a major upgrade to the Probate Finder OnDemand application

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White House warns organizations have ‘hours, not days’ to fix vulnerabilities as Microsoft Exchange attacks increase

The Biden administration warned Friday that organizations face enormous risks from the recently disclosed Microsoft Exchange vulnerabilities that have affected thousands of private organizations.

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RMAI Issues Guidance on Federal Stimulus Funds

With the pending release of an additional round of COVID-19 federal stimulus funds to struggling U.S. consumers, RMAI continues to advise our members to avoid seeking these funds as a potential source of payment on outstanding consumer obligations. This is the same guidance RMAI shared with our members on April 13, 2020 and December 17, 2020.

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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 - This event has been tentatively postponed - to be held either later this year, or next year.