U.S. Households Borrow More Than Ever, Just Not on Credit Cards

(Bloomberg) -- Americans increased their borrowing to a record of $14.6 trillion in March, driven by home and auto loans. But the growth masked what Federal Reserve Bank of New York researchers called a “confounding” decline in credit-card balances during a quarter when retail sales soared and travel resumed.

Governor Cuomo Signs Legislation Protecting New Yorkers’ COVID-19 Stimulus Payments from Debt Collectors

Governor Andrew M. Cuomo today signed legislation (S.5923-A/A.6617-A) protecting New Yorkers' COVID-19 stimulus payments from being garnished by debt collectors. All relief payments to New Yorkers under these federal acts, including stimulus payments, tax refunds, rebates, and tax credits to support individuals and children qualified for or received prior to the effective date, will be protected. This legislation also creates a carve-out for claims brought by individuals who have an interest in the relief payments to ensure that these funds can be collected to pay child and spousal support and to collect payments in situations involving fraud. 

Household debt climbs to $14.64 trillion, due to jump in mortgages and car loans

Consumer debt edged higher during the first three months of 2021, due primarily to a jump in mortgages and auto loans, the Federal Reserve reported Wednesday. Total household debt balances rose by $85 billion in the first quarter, a 0.6% increase that brought the total level to $14.64 trillion. Fueled by low rates and a red-hot housing market, mortgage debt swelled in the period by $117 billion, or about 1.2%, to $10.16 trillion, according to the New York Fed’s quarterly Report on Household Debt and Credit. Auto loans increased by $8 billion, to $1.38 trillion, while student debt balances rose by $29 billion to $1.58 trillion, even though many loans are in forbearance granted during the coronavirus pandemic.

Interest rates on new federal student loans will rise by nearly 1% as of July. Here’s what borrowers need to know

The interest rate on new federal student loans is going up. The government sets annual interest rates on the debt once a year, and the percentage is based on the 10-year Treasury note. Despite the uptick, rates remain low by historical standards, said higher education expert Mark Kantrowitz. Although the U.S. Department of Education hasn’t formally announced the new rates for the 2021-2022 academic year, Kantrowitz has calculated what the new figures will likely be. By Kantrowitz’ estimations, the interest rate on federal student loans will climb by 0.98%.

Supreme Court Holds the FTC Act Gives No Authority to Bypass Administrative Cease-and-Desist Orders

In recent years, the Federal Trade Commission (FTC) has with increasing frequency sued in federal court under the purported authority of Section 13(b) of the Federal Trade Commission Act¹ (FTC Act) to obtain restitution of losses or disgorgement of profits resulting from “unfair methods of competition” or “unfair or deceptive acts or practices.” In doing so, the FTC has circumvented often time-consuming FTC administrative hearings that can produce nothing more than a cease-and-desist order.

Need a credit card or auto loan? Banks are making them easier to get

Banks are loosening the purse strings for consumer borrowers.

Credit cards, auto loans and other personal loans are all getting easier to come by, more than a year into a pandemic that spooked lenders and caused them to tighten lending standards significantly. The net share of banks that loosened underwriting standards for credit cards hit a high in roughly the first quarter, according to a survey of loan officers conducted by the Federal Reserve. The net share of banks relaxing underwriting on other consumer loans such as installment loans also notched a record. For auto loans, that share was the highest level in more than eight years.

State Street Corporation to pay $115M criminal penalty

BOSTON (AP) — State Street Corporation has agreed to pay a $115 million criminal penalty to resolve charges that it schemed to defraud clients by secretly overcharging some of its customers for as long as 17 years, federal investigators said Thursday.

American credit card balances see ‘remarkable’ drop while student loan debt keeps rising

American credit card balances saw a 'remarkable' drop in the first quarter of 2021, according to newly published New York Fed data, while student loan debt kept rising despite a payment and interest pause. 

TCPA 2.0: A Call For Congress to Get Serious About Robocalls While Protecting the First Amendment—Here’s How

Back in 1991 Congress passed the one and only federal law designed to prevent Robocalls—the Telephone Consumer Protection Act (TCPA). As any American can tell you, the statute has proven completely ineffective at preventing unwanted Robocalls from reaching our cell phones. This is true despite the fact that the law contains one of the richest private rights of action ever created by Congress—meaning that thousands of TCPA lawsuits are filed every year seeking to enforce the statute, but mostly against legitimate American businesses and not the real bad guys.

WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS ANNOUNCES LAUNCH OF THE CENTER FOR FINTECH INFORMATION (CFI)

Olympia – The Washington State Department of Financial Institutions (DFI) announces the creation of the Center for FinTech Information (CFI) within the agency to facilitate communication between DFI and entrepreneurs, start-ups, and fintech companies. Director Charlie Clark announced the comprehensive new site https://dfi.wa.gov/fintech and additional tools for innovative companies seeking further guidance at this morning’s Washington Technology Industry Association (WTIA) Town Hall.

PLAYING WITH FIRE: Court Confirms No Non-Delegable Duty to Control Telemarketers Under TCPA in Most Roundabout Way Possible

Ever since the fantastic decision of Smith v. State Farm Mut. Auto. Ins. Co., 30 F. Supp. 3d 765 (N.D. Ill. 2014) my TCPA practice guide has had a section providing “there is likely no non-delegable duty to control third-parties under the TCPA.”

Payment Card Rules v. PCI DSS: District Court Opens the Door to Potential Data Breach Tort Liability Based on Common Law Duties and Section 5 of the FTC Act

CPW has been covering data breach litigations for some time (as a reminder of recent rulings of significance, check out our prior posts here and here).  This includes In Re: Wawa, Inc. Data Security Litigation and key related cases back in November and January.  On Thursday, the U.S. District Court for the Eastern District of Pennsylvania issued its long awaited opinion, granting in part and denying in part a motion to dismiss filed by Wawa, a convenience store chain, stemming from a class action lawsuit filed against it by a group of credit unions following an alleged data breach.  Read on to learn how it went down and what it may mean for other data breach litigations.

TitleMax and State Argue Over Short-Term Loan Term Limits Before Supreme Court

Nevada law allows for businesses to extend short-term, high-interest loans of various types to individuals, but sets a generally strict 210-day time limit to avoid the massive accumulation of interest. The law allows lenders to give grace periods after the 210-day timeframe, but only under the terms that a lender does not offer any new loan agreement or charge the customer additional interest.

Unlike Dollar Loan Center or other well-known “payday lenders,” TitleMax offers what are called title loans, which are extended after a person exchanges the title of their vehicle for collateral. State law prohibits title loans from exceeding the value of a car, but state regulators argued in court that the company’s “refinancing” practices violated the intent of the law.

Telrock supports its rapid growth with the appointment of a dedicated Chief Information Security Officer to its senior management team

Atlanta, GA and London, UK – May 12, 2021 – Telrock is proud to announce and welcome Ray Jackson as the company’s newly appointed Chief Information Security Officer (CISO). Ray has more than 20 years of experience in IT and Information Security (InfoSec) including a prior position at Moneycorp, a global payment services Fintech. Ray has extensive payment card security knowledge, through prior delivery of IT Security consultancy and as a Payment Card Industry (PCI) Data Security Qualified Security Assessor. Some of his impressive accreditations include CESG Certified Professional, Certified Information Systems Security Professional, and ISO27001 Certified ISMS Lead.

Microsoft 365 email data breaches take center stage amid WFH in a new report

According to the software company Egress, 85% of organizations using Microsoft 365 have experienced an email data breach.

Over the last year, organizations worldwide have adopted remote work policies to mitigate the spread of COVID-19 in-house. During this time, companies have tapped virtual collaboration tools to enable remote operations with varying degrees of success. On Wednesday, software company Egress released a report titled "Outbound email: Microsoft 365's security blind spot" highlighting email data breaches and IT frustrations during the coronavirus pandemic.

CFPB Sends Notification Letters to Landlords Regarding COVID-19 Evictions

On May 3, 2021, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) sent notification letters reminding the nation’s largest apartment landlords of federal protections in place to keep tenants in their homes and stop the spread of COVID-19.   The Notification Letter points to the Centers for Disease Control and Prevention (CDC) eviction moratorium for non-payment of rent (CDC Moratorium), which the CDC extended through June 30, 2021, as well as recent guidance from the CFPB and FTC in support of the CDC Moratorium.

What’s your vaccination status? Key legal considerations before asking your employees about theirs

With 2019 novel coronavirus (COVID-19) vaccines available throughout the U.S., many employers are eager to normalize operations. For business planning purposes, surveying employees regarding their vaccination status may be a helpful tool in understanding if employee are, or plan to become, vaccinated.

If your business is considering surveying employees about their vaccination status, consider these four key legal areas before you act:

Bankers Worried Over Credit Card Balances Paid In Full

Consumers are continuing the pandemic-fueled habit of paying off credit card balances, a practice that now has bankers more than a little worried, The Wall Street Journal reported Tuesday (May 11). Some of the biggest banks in the U.S. are stepping up marketing efforts and sweetening the benefits pot to attract a larger and stronger customer base of card users. In earnings calls, some banks — Discover and Capital One for example — indicated that it’s been more than 20 years since people paid off credit card balances in the first quarter at the rate currently being seen now.

Generation Debt: It’s Not Who You Think

An overwhelming majority of Americans report having some kind of debt, and the number has been increasing in the past year, according to a new survey. While that phenomenon is reported across all age ranges, there are some notable generational differences.

Two Major Trends in Fintech Lending

This past year was a true roller coaster ride for lending businesses: sudden drops in consumer spendings as well as business spendings due to lockdowns, deteriorating credit performances, unemployments and PPP loans, unexpected acceleration in e-commerce and digitalization of financial services, favorable regulation changes, and more. I’m eager to hear directly from all these fintech industry experts at LendIt Fintech USA about what they have learned during the pandemic and what they think will be next for lending.

Update on Federal student loan forgiveness: See where the latest policies and proposals stand

The Biden administration hasn’t made a decision when it comes to forgiving student loan debt, despite pressure from progressive Democrats that have called on the president to issue an executive order that would wipe out millions of borrowers’ debt.

3 Ways to Spot Lending Scams With the CFPB

There are definitely times when it feels like you're on your own in the credit world -- like it's us against the big banks, with no one else on our side. But you do have one big ally in the fight for financial fairness: the Consumer Financial Protection Bureau (CFPB).

Alaska Court System starts bringing back some online services after cyberattack

The Alaska Court System restored some online services Tuesday after a cyberattack forced the court system to disconnect many of its operations from the internet at the beginning of May, but it was unclear how long a full recovery may take.

The court system disconnected applications from the internet on May 1 after a cybersecurity alert on April 29 pointed to unusual activity, it said in a statement Tuesday. Someone outside the network placed malware on the system, including four servers and two computers, according to the court system.

Senate votes to repeal CUNA-opposed ‘true lender’ proposal

The Senate voted 52-47 Tuesday night in favor of a CUNA-backed repeal of the Office of the Comptroller of the Currency’s “true lender” rulemaking. CUNA wrote Senate leadership Tuesday supporting the repeal, which was done via the Congressional Review Act (CRA).

Emprise Technologies Announces Promotion of Chris Mazur to Vice President and Matt Scott to Senior Director

Toledo, OH – Emprise Technologies is very excited to announce the promotion of Chris Mazur to Vice President and Matt Scott to Senior Director. Matt and Chris have put in massive effort to build Emprise strong. The growth of the company is apparent in our increasing team numbers as well as our larger diversity of work.

CFPB foreclosure moratorium ‘unnecessary, overbroad’

CUNA supports the Consumer Financial Protection Bureau’s (CFPB) Regulation X amendments regarding streamlined modifications, but strongly objects to a proposed moratorium on foreclosures until 2022. The CFPB proposed a set of rule changes last month that would generally prohibit mortgage servicers from starting foreclosure until after Dec. 31, 2021.

TCN Launches Operator, Next-Generation Call Center Platform

St. George, Utah – May 11, 2021 – TCN, Inc., a global provider of a comprehensive cloud-based call center platform for enterprises, contact centers, BPOs, and collection agencies, today announced the launch of TCN Operator, the next generation of its flagship platform. Built for the modern call center, TCN Operator features an intuitive interface and a comprehensive set of easy-to-use, automated agent tools and advanced apps that all work together to boost agent productivity and improve customer experience.

NAFCU calls on Congress to overturn OCC’s ‘true lender’ rule

NAFCU Vice President of Legislative Affairs Brad Thaler Monday called on senators to support a resolution to use the Congressional Review Act to nullify the Office of the Comptroller of the Currency's true lender rule. The chamber could vote on the resolution this week.

1099-C Discharge Without Debt Cancellation Not Consumer Protection Law Violation

Once again, a borrower who argued his debt was cancelled when he received an IRS Form 1099-C was told by the court that it was merely discharged. The court says “discharge” is not “actual discharge.” While acknowledging that a common consumer may not easily understand the distinction, the court held that “discharge” for IRS reporting purposes is not necessarily “actual discharge” of the obligation.

CFPB defends broad investigation into auto title lender

The Consumer Financial Protection Bureau has denied TMX Finance LLC’s bid to end an investigation into the auto title lender’s business practices, rejecting the company’s claim that it was unlawfully broad.

COVID-19: Federal Judge Rules CDC Not Authorized To Issue Nationwide Eviction Moratorium

A federal judge in Washington, D.C. has ruled that the Centers for Disease Control and Prevention (CDC) exceeded its authority in issuing a nationwide eviction moratorium aimed at protecting renters facing hardship in the wake of the COVID-19 pandemic. 

Fixed-rate student loan refinancing rates sink to new record low for the second straight week

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans into 10-year fixed-rate loans hit another new record low during the week of May 3, 2021. For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender, during the week of May 3:

Here’s why mortgage rates are on the rise

Since the start of the pandemic, mortgage and refinance rates steadily decreased, reaching a historical low of 2.65% for a fixed-rate 30-year mortgage in January 2021. However, over the past few months, we've seen an increase in mortgage rates.

United States: CFPB Proposes 60-Day Extension Of Effective Date Of New FDCPA Regulations

The Bureau of Consumer Financial Protection (CFPB) has proposed and invited comment on a 60-day postponement of the effective date of recently finalized amendments to Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA). The proposed rule, recently published in the Federal Register, would extend until January 29, 2022 the effective date of two final rules adopted at the end of 2020 that currently will become effective on November 30, 2021.

Does the Eleventh Circuit’s Hunstein Decision Mean that the FDCPA Violates the First Amendment?

The Eleventh Circuit’s far-reaching decision in Hunstein v. Preferred Collection and Management Services, Inc. — which we previously covered on this blog — continues to raise questions for the wide range of industries that fall within the FDCPA’s definition of “debt collectors.” To put it briefly, the Eleventh Circuit held that a debt collector violates the FDCPA when it communicates with any third party — including a vendor or other party assisting with the collection or servicing of the loan — regarding the loan or debt.

One-third of people who delayed mortgage payments during COVID-19 used cash for groceries, utilities

One of the lifelines for homeowners during the COVID-19 pandemic has been forbearance, an ability to skip or make smaller monthly payments on mortgages under the CARES Act, leaving them more cash for emergencies.

Some Pennsylvania student debt will no longer be turned over to debt collectors

Nearly $18 million in fees owed to the state by former students was recently pulled from private debt collection agencies and taken over by the Pennsylvania Office of Attorney General. The state will no longer send any debts for outstanding student fees to for-profit debt collectors — at least not before more consumer-friendly efforts are attempted to collect the debt.

Here’s how to avoid a personal loan company scam

It’s an unfortunate reality that most people will interact with at least one scammer when they’re filing financial paperwork for different types of loans, like student loans or a home loan. If you’re looking for a personal loan to help cover expenses, this type of scam can be particularly painful.

Report: Kabbage, FinTechs Under Justice Department Scrutiny For PPP Loan Distribution

The U.S. Department of Justice is conducting a civil probe into whether some FinTechs distributing federal Payroll Protection Program relief botched loan sizes, Reuters reported, citing numerous unnamed sources. One of the companies the government is looking into is Atlanta-based Kabbage, according to the wire service. Spokesmen for American Express, which purchased a significant portion of Kabbage assets, and the Justice Department, declined comment, according to Reuters.

New legislation aims to forgive student debt for eligible caregivers to veterans

Recently introduced Congressional legislation would forgive student loan debt for eligible caregivers to veterans. The bill, introduced by U.S. Reps, Mike Turner, R-Dayton, and Gerald Connolly, D-Va., would amend the Higher Education Act of 1965 to make Veterans Affairs-designated primary family caregivers eligible for the public service loan forgiveness (PSLF) program.

MUSA Auto Finance will rebrand as DRIVRZ Financial, extend focus to mobile app connecting consumers and dealers

DALLAS, May 6, 2021 /PRNewswire/ -- MUSA Auto Finance, an automotive finance and technology lender specializing in effortless leasing, has announced that it will rebrand as DRIVRZ Financial.

$131,916,000 Checks

Capital Debt Solutions, LLC

(866) 305-5102

$45,179,000 Medical

Capital Debt Solutions, LLC

(866) 305-5102

$ 75,081,954. Credit Cards

Capital Debt Solutions, LLC

(866) 305-5102

$100,195,000 Credit Cards

Capital Debt Solutions, LLC

(866) 305-5102

$9,555,000 Retail

Capital Debt Solutions, LLC

(866) 305-5102

$3,855,000 Retail

Capital Debt Solutions, LLC

(866) 305-5102

$15,041,000 Payday Loans

Capital Debt Solutions, LLC

(866) 305-5102

$199,568,000 Auto Deficiencies

Capital Debt Solutions, LLC

(866) 305-5102

Katabat

(302) 502-3050

RMAI Executive Summit

Receivables Management Association International

Collection and Recovery Solutions 2022

Resource Management Services, Inc.