At a glanceWednesday, April 14, 2021

Collection Industry News At A Glance - April 14, 2021
Wednesday April 14, 2021
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CFPB Takes Action Against SettleIt, Inc. for Steering Consumers into High-Cost Loans

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) took action today against an online debt-settlement company for taking advantage of consumers, failing to disclose its relationship to certain creditors, and steering consumers into high-cost loans offered by affiliated lenders. The CFPB filed a complaint in federal district court alleging that SettleIt, Inc. engaged in abusive acts or practices under the Consumer Financial Protection Act of 2010 (CFPA) and violated the Telemarketing Sales Rule (TSR).

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Mortgage Loans In Forbearance Are Down To 4.66 Percent

The Mortgage Bankers Association's Weekly Forbearance and Call Volume Survey reported that the total number of loans currently in forbearance is down to 4.66% of servicers portfolio volume, for the week ending April 4, 2021. This marks a 24 basis point decline from the previous week's total number of loans in forbearance.

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Pressure mounts for Biden to forgive student debt

While the latest Covid stimulus package and a new massive infrastructure bill are the main topics of conversation in Washington of late, President Joe Biden continues to be under mounting pressure to take action on student loan forgiveness, too. Sen. Elizabeth Warren, D-Mass., held a hearing Tuesday afternoon on the burden of student loan debt and urged Biden to cancel the loans as soon as possible.

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US Mortgage Delinquency Rates At The Lowest Levels Since The Start Of The Pandemic

CoreLogic's latest Loan Performance Insights report for January 2021 revealed that US mortgage delinquency rates are down for the fifth consecutive month, to the lowest since the start of the COVID-19 pandemic. According to the report, in January 2021 5.6% of all mortgages in the U.S. were in some stage of delinquency.

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CFPB and FTC Issue Joint Statement on Preventing Illegal Evictions

CFPB Acting Director, Dave Uejio, and FTC Acting Chairwoman, Rebecca Slaughter, recently issued a joint statement on the agencies’ efforts to stop illegal evictions and protect consumers facing economic hardship due to Covid-19.

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Convoke Introduces Consumer Call Recording Fulfillment

ARLINGTON, Va., April 13, 2021 /PRNewswire/ -- Convoke, a leader in SaaS solutions for the debt collection market, is pleased to announce significant updates it has made to its collections intelligence platform. Each year, Convoke develops and releases multiple new and expanded features to its platform to support its clients' evolving needs.

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Student loan forgiveness: New Education Department data highlights benefits of cancellation

New Education Department (ED) data reveals how student loan borrowers would benefit from various levels of debt forgiveness, providing more material for Democratic lawmakers urging President Biden to cancel student debt and setting the stage for a Senate student debt hearing on Tuesday.

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California Supreme Court Confirms Call-Recording Statute Applies to Parties and Nonparties Alike

California Penal Code Section 632.7, part of California's Invasion of Privacy Act, prohibits the recording of a communication between a cellular or cordless telephone and another telephone without the consent of all parties.

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Historical U.S. Credit Card Delinquency Rate Study

Credit card delinquency rates, as measured by the Federal Reserve Bank of New York for accounts that are 90 days or more late in making payments, have ebbed and flowed with economic conditions over the decades but reached their all time peak during the financial crisis in Q4 of 2009 when they reached an eye-popping 11.0%.

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Eviction, Foreclosure Disputes Being Handled Online

In response to the COVID-19 pandemic, 17 Ohio courts will be experimenting with handling evictions, foreclosures, small claims and family cases online.

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As Major Credit Card Issuers Pulled Back Amid COVID, Startups Stepped In

While major credit card issuers tightened lending standards and slashed credit limits amid COVID-19, some financial technology startups took a different tack.

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Acting FTC Chairwoman Slaughter Appoints Marta E. Wosińska as Director of Bureau of Economics

Acting Federal Trade Commission Chairwoman Rebecca Kelly Slaughter announced that she has appointed Marta E. Wosińska as Director of the FTC’s Bureau of Economics.

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Fed Data Shows Big Banks’ Loan-to-Deposit Ratio At 36-Year Low

The Federal Reserve’s latest weekly survey showed that the 25 largest banks in the U.S. reduced their loan-to-deposit ratio by 53.9 percent, the lowest in the 36 years that the data has been collected, Bloomberg reported on Monday (April 12). Together, the banks dropped loan holdings by 8 percent in the past year through March, the Fed data show. Total loans fell by $447 billion to $5.45 trillion, and total deposits increased 16 percent to $10.13 trillion. The share of safe assets dropped to 35.6 percent in the week that ended March 31 from 36.0 percent the previous week, the Fed reported, per Bloomberg. Safe assets are low-risk investments like cash, Treasuries and securities. Total assets dropped to $20.91 trillion from $21.04 trillion. 

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Looming student loan forgiveness? A provision in the March stimulus bill could set the stage for debt cancellation

In recent weeks the U.S. Department of Education has announced two rounds of student loan forgiveness, wiping out $1.3 billion held by Americans with permanent disabilities and another $1 billion held by defrauded students. In the grand scheme of things, those loan forgiveness announcements are relatively small compared to the total $1.7 trillion student loan debt held by borrowers. But broader forgiveness could be on the way: Last week White House Chief of Staff Ron Klain said that President Joe Biden has asked the Secretary of Education to explore if the executive branch has the legal authority to wipe out as much as $50,000 per borrower in student loan debt.

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Paying rent with a personal loan: What to know

Millions of Americans lost their jobs during the pandemic and a recent poll found that many of them are now struggling to pay rent. The poll found that over 30% of households have used up most or all of their savings, and 19% are struggling to pay their rent.  

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Fixed-rate student loan refinancing rates sink, move closer to record 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 April 5, 2021. For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender, during the week of April 5:

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Student loan forgiveness: What $10,000 in cancellation would look like by U.S. state

As the president mulls Democrat calls to cancel up to $50,000 in federally-backed student loan debt via executive order, a new analysis shows how $10,000 in forgiveness would affect borrowers in each U.S. state. Analyzing Education Department (ED) data as of September 2020, Student Loan Hero estimated that $10,000 forgiveness would cost roughly $315 billion and erase the entire balances for 34% of borrowers. (A payment pause on qualifying loans has been in effect since March 2020 and will last at least through September 2021.)

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A year of COVID-19 brought record consumer debt and collection complaints

After more than a year of COVID-19, the nation’s collective ability to cope with dual public health and economic crises has diminished many consumers’ ability to remain financially stable. While this February’s national employment report by the Bureau of Labor Statistics showed a net gain of 379,000 jobs and white unemployment dropped to 5.6%, there was no corresponding improvement for Black and Latino workers. Instead, unemployment was respectively higher at 9.9% and 8.5%.

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Can the CFPB’s new forbearance rules prevent a foreclosure crisis?

While forbearance numbers have declined somewhat in recent weeks, around three million homeowners are still behind on their mortgages. As foreclosure moratoriums are set to expire later this year, the housing market is now facing the risk of a shock from millions of homeowners going from forbearance straight into foreclosure.

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CFPB Signals Continued Progress Toward Dodd-Frank 1071 Notice of Proposed Rulemaking

On the heels of CFPB Acting Director Dave Uejio’s recently released statement to agency staff members, the Bureau again signaled that it is making progress toward issuing a Notice of Proposed Rulemaking (NPRM) enacting Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). Specifically, in late February, the CFPB filed its fourth status report in the United States District Court for the Northern District of California as part of a legal settlement. This latest status report indicates that the Bureau is moving closer towards issuing to enact these important regulations.

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JPMorgan Chase CEO Jamie Dimon: Fintech is an ‘enormous competitive’ threat to banks

Jamie Dimon, JPMorgan Chase chairman and CEO, listed fintech as one of the “enormous competitive threats” to banks in his annual shareholder letter released Wednesday. “Banks ... are facing extensive competition from Silicon Valley, both in the form of fintechs and Big Tech companies,” like Amazon, Apple, Facebook, Google and Walmart, Dimon wrote, and “that is here to stay.”

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Developing a lending strategy for rising mortgage rates

As we enter the second quarter of 2021, it’s time for the mortgage industry to reflect on the past 12 months and think about how to plan for the same period ahead. After all, it was mid-March of last year that the president declared a national emergency leading to school closures, the wearing of masks, and the emptying of office buildings across the country. A little over a year ago, we could have never imagined the actual implications of COVID’s impact to come on this nation, our communities, families and our business.

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Does CFPB have authority to postpone foreclosures?

The Consumer Financial Protection Bureau released a proposed rule on Monday that would bar servicers from starting on foreclosures until 2022. The CFPB also proposed streamlined processes for moving homeowners out of forbearance and into loss mitigation options. However, since the announcement, several industry leaders have expressed reservations about the blanket policy.

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Most big debt collectors backed off during the pandemic. One pressed ahead.

When Covid-19 hit the economy, most debt collectors gave borrowers a break, cutting back on lawsuits amid lockdowns, closed courts and loan-forbearance initiatives. One of the biggest and least-known companies in the industry did the opposite.

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Jobless claims: Another 744,000 Americans filed new claims last week

New weekly jobless claims unexpectedly held above 700,000 last week to extend a rise from late March, despite other signs that rehiring has been taking place across the recovering economy. 

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Maryland Medical Debt Collection Requirements Bill Awaits Governor’s Signature

Maryland could become the latest state to have a medical debt collection bill on the books after SB 514 and HB 565 were approved 47-0 and 134-0 in the state’s Senate and House, respectively.

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CFPB develops a proposal to avoid widespread foreclosures

The Consumer Financial Protection Bureau (CFPB) has developed a proposal to prevent avoidable foreclosures as temporary forbearance measures put in place during the pandemic will expire in the fall. The CFPB’s proposal seeks to ensure that both mortgage servicers and borrowers can work together to prevent avoidable foreclosures.

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How quickly can you get a mortgage refinance after buying a home?

Even if you’ve just purchased a home, watching mortgage rates drop makes it tempting to refinance your existing loan. After all, even a minor decrease can have a big impact when it comes to savings. Cindy Couyoumjian, founder of Cinergy Financial and author of "Redefining Financial Literacy," used the following example to illustrate that point. "Suppose your mortgage payment is $1,000, if you lower your interest rate by 1%, your payment will be reduced by $100," she explained. "That’s a $12,000 savings over 10 years. You need to look at the big picture when refinancing a home. A 1% drop in interest rate can translate to thousands of dollars saved over the life of the loan."

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Biden consumer watchdog seeks delay of Trump-era debt collection rules

The Consumer Financial Protection Bureau proposed a delay Wednesday to two debt-collection rules issued in the waning days of the Trump administration. Those rules broadly addressed how debt collectors may communicate with and make disclosures to consumers.

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CFPB Proposes Delay of Effective Date for Recent Debt Collection Rules

WASHINGTON, D.C. – The Consumer Financial Protection Bureau today proposed extending the effective date of two recent debt collection rules to give affected parties more time to comply due to the ongoing COVID-19 pandemic. The debt collection rules, issued in late 2020, are scheduled to take effect on November 30, 2021.  The CFPB is proposing to extend the effective date of both rules to January 29, 2022.

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FTC Annual Highlights 2020

The Federal Trade Commission is a bipartisan federal agency with a unique and important mission: protect consumers and promote competition. In 2020, the FTC continued to promote competition by challenging harmful mergers and anticompetitive business conduct that harms consumers. As part of its active merger enforcement agenda, the Commission sued to block or unwind an unprecedented nine mergers and negotiated settlements to prevent harm in another 12 transactions. Ten other deals were abandoned in the face of antitrust concerns raised in FTC investigations.

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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 - Originally Scheduled for:
May 12 - 14 , 2021

562-906-1101 - This event has been tentatively postponed - to be held either later this year, or next year.