At a glanceFriday, May 28, 2021

Collection Industry News At A Glance - May 28, 2021
Friday May 28, 2021
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CFPB Takes Action Against Company and its CEO for Deceptive Deposit and Loan Products

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today filed a proposed settlement against Driver Loan, LLC, and its CEO, Angelo Jose Sarjeant. If entered by the court, the settlement would require the defendants to refund about $1 million in deposits to harmed consumers, stop deceptive practices, and pay a civil penalty. The CFPB alleges that Driver Loan and Sarjeant violated federal law by misrepresenting the risks associated with their deposit product and the annual percentage rate (APR) associated with the consumer loans they make.

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It’s your last chance at a PPP loan. Here’s how to apply

Time is running out for small-business owners looking to get a government Paycheck Protection Program loan. Applications for the final round of PPP loans will be accepted only until Monday or until the remaining funds are drained, whichever is sooner. Most of the money is already gone. As of Friday, only about $3 billion was left of the $800 billion provided for the program, according to congressional staff. The Small Business Administration has approved more than 11 million of the loans over the course of the program.

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Student debt rises as the future of loan forgiveness remains uncertain

Because of the coronavirus pandemic, the price of higher education is an even bigger consideration for students and their families than usual. At the same time, the cost of a four-year college or university has never been higher. For the 2020-21 academic year, average tuition and fees increased 1.1% for in-state students at four-year public colleges, reaching $10,560, and 2.1% for students at four-year private institutions, to $37,650, according to the College Board, which tracks trends in college pricing and student aid.

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FDIC-Insured Institutions Reported Net Income of $76.8 Billion In First Quarter 2021

WASHINGTON— Reports from the commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reflect aggregate net income of $76.8 billion in first quarter 2021, an increase of $58.3 billion (315.3 percent) from a year ago. Aggregate negative provision expense, reflecting improvements in the economy and asset quality, drove the increase in quarterly net income. Financial results for first quarter 2021 are included in the FDIC’s latest Quarterly Banking Profile released today.

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US average mortgage rates decline; 30-year loan at 2.95%

WASHINGTON (AP) — Mortgage rates declined this week, pushing the benchmark 30-year home loan back down below the 3% mark. Signs continued of the economy’s recovery from the pandemic recession. Mortgage buyer Freddie Mac reported Thursday that the average for the 30-year rate fell to 2.95% from 3% last week. At this time last year, the average long-term rate was 3.15%.

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Summary of the 2021 CFPB Research Conference

The Bureau’s Office of Research held its 5th Research Conference on May 6. The presentations included research by academics and policymakers covering various topics in household and consumer finance. We were honored to have a keynote address  by Dr. Raphael Bostic , President and CEO of the Federal Reserve Bank of Atlanta. President Bostic discussed a number of pressing research areas, including disparities in homeownership and access to mortgage credit, improving our understanding of the Community Reinvestment Act, and the evolution of credit scores across economic cycles

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U.S. bank profits rose to $76.8 bln in Q1 2021, a 29.1% jump from previous quarter

WASHINGTON, May 26 (Reuters) - U.S. bank profits rose 29.1% during the first quarter of 2021 from the previous quarter as banks adjusted expectations for future credit losses downwards, a bank regulator said on Wednesday.

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Real Quick: Navient May (May) Get Another Chance to Defeat TCPA Claim Arising Out of Government-Backed Debt Exemption

You might recall last month Navient was hammered for calls it made in reliance on the government-backed debt exemption. Although the TCPA plainly permitted the calls it made at the time–as in the express language of the statute literally exempted the calls it made from coverage–the Court determined that AAPC voided the exemption as if it never existed.

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10 Best Cities to Get Out of Credit Card Debt

The Federal Reserve says that revolving consumer credit debt – including debt from credit cards, home equity lines of credit and personal lines of credit – increased to $974.4 billion in February 2021, marking a 10.1% annual rate increase from the year before. This is almost one-third of all consumer debt, which also includes student and car loans, and adds up to a grand total of $4.2 trillion. With so many people trying to pay off credit card debt, SmartAsset crunched the numbers to identify and rank the best cities where it’s easiest to do so.

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4 Tips for Small-Business Owners Paying Down Pandemic Debt

After more than a year of navigating lockdowns, mandates and COVID-19 protocols, small-business owners are starting to see a light at the end of the tunnel. But the debt many needed to take on to weather the pandemic still casts an ominous shadow.

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Student Debt Forgiveness Dropped From Biden’s Annual Budget

Although President Biden initially showed support for $10,000 of undergraduate or graduate student debt relief for every year of national or community service, up to five years and $50,000, student debt forgiveness is expected to be left out of the new budget plan, The Washington Post reported. The budget plan is due to be released by the end of this week.

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CFPB and Debt Settlement Company Agree to Stipulated Final Judgment and Order

On May 17, 2021, the Consumer Financial Protection Bureau (CFPB) announced that it has entered​ into a stipulated judgment​ and order​ to resolve a civil action that it previously filed against a debt settlement company in the U.S. District Court for the District of Massachusetts on December 1, 2020, as previously reported he​​re.

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Attorney General Bonta Announces Guilty Pleas in $6 Million Southern California Mortgage Relief Scheme

SACRAMENTO – California Attorney General Rob Bonta today announced that the nine defendants involved in an advance fee mortgage relief scam in Southern California have pleaded guilty to multiple counts including theft from an elder, identity theft, and grand theft. The scheme, which the defendants claimed would prevent the foreclosure of properties, impacted multiple victims, resulted in a loss of approximately $6 million, and affected over 200 properties; including properties with loans insured by the Federal Housing Administration, as well as loan servicers Freddie Mac and Fannie Mae

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FTC to Host Virtual Advertising and Data Security Workshop for Small Businesses

The Federal Trade Commission and its regional partners in Dallas will host a free, virtual workshop on June 24, 2021, to discuss advertising and data security basics for small businesses, advertising professionals, and attorneys who advise them.

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American Rescue Plan Debt Payments

The American Rescue Plan Act (ARPA) Section 1005 includes provisions for USDA to pay up to 120% of loan balances, as of January 1, 2021, for Farm Service Agency (FSA) Direct and Guaranteed Farm Loans and Farm Storage Facility Loans (FSFL) to any Socially Disadvantaged producer who has a qualifying loan with FSA. This includes producers who are one or more of the following: Black/African American, American Indian, Alaskan Native, Hispanic/Latino, Asian American, or Pacific Islander.

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Mortgage requirements are loosening for home buyers

There’s good news for home buyers: It’s finally getting easier to get a mortgage loan. After tightening their lending standards during the pandemic, it seems mortgage lenders are starting to loosen the reins a bit. In fact, according to the Mortgage Bankers Association, mortgages were about 2.2% easier to come by in April than in March. And on some types of loans? Mortgage availability was up as much as 12.6%. Here’s what the change means for home buyers (and refinancers).

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Fixed-rate student loan refinancing rates set the third record low in four weeks

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans into 10-year fixed-rate loans hit another record low during the week of May 17, 2021. This is the third time in four weeks that refinance rates sunk to a new low.

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OCC Will Review Its Cryptocurrency-Related Guidance, Says the New Chief

Michael Hsu – the new chief of the OCC – revealed that the US independent bureau plans to put under review its crypto guidelines offered over the past year. He added that all federal banks should provide interpretive letters and guidance, including issues around digital assets alongside pending matters.

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5 ways to identify personal loan scams

In 2020, there were 99,667 reports of identity theft for business and personal loans, according to the Federal Trade Commission. This represents a 127% increase from the previous year. If you don’t see the warning sign of a personal loan scam and you fall into a scammer’s trap, your identity can be stolen. In addition, the scammer may take some of your hard-earned money. In addition to taking your money, the scam artist could also hit you with identity theft, potentially leaving you with bad credit

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When do student loan payments restart?

Washington (CNN)Federal student loan payments are set to resume on October 1, after an unprecedented 19-month suspension that was put in place to provide financial relief to borrowers during the pandemic. Borrower balances have effectively been frozen for more than a year, with no payments required on federal loans since March 2020, when Congress first authorized the pause as part of one of its first major Covid relief packages.

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Consumers Set to Spend Big (and Take On Debt) As Pandemic Restrictions Ease

With more than 100 million Americans fully vaccinated against COVID-19, pandemic restrictions are starting to loosen up around the country. And as activities make a comeback, such as traveling and in-person dining, many consumers are ready to splash out with big spending, even if it means going into debt.

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Here’s the average student debt balance of borrowers 25 to 34 years old

Twenty-five to 34-year-olds make up the biggest cohort of student loan borrowers, adding up to 14.8 million borrowers in total. The average individual in this age bracket has a student loan balance of $33,817.56, according to statistics from the U.S. Department of Education’s Q4 2020 data. While this number is just shy of how much the average student loan borrower of all ages carries ($39,351), it’s more than double what the 24-and-younger cohort is dealing with (their average balance is $14,807.69).

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Biden downplays student loan forgiveness in new report — what to do with your college debt now

Student loan debt was a prominent topic during the 2020 presidential election, and many borrowers looked to then-candidate Joe Biden in hopes of forgiveness measures. While President Biden campaigned on solving the college debt crisis, in a Thursday interview with The New York Times, Biden suggested that he doesn't wholly agree with the idea of federal student loan forgiveness.

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CFPB Takes Action Against Auto Lender for Unfair Loss Damage Waiver Practices

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) issued a consent order today against 3rd Generation, Inc., doing business as California Auto Finance (California Auto) for illegally charging interest for late payment on its Loss Damage Waiver (LDW) product without its customers’ knowledge. The CFPB’s order requires California Auto to refund or credit customers harmed by the conduct, furnish corrected information to credit reporting agencies, and pay a civil penalty and also prohibits the company from charging interest on late payments without disclosing costs.

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Credit Scores ‘May Lose Some Power’ After Covid, Fed Warns

The Federal Reserve Bank of New York warned that credit scores -- the all-powerful number that can determine if a consumer is able to qualify for a loan, rent a home or even buy car insurance -- might have gotten less reliable during the coronavirus pandemic. Scores for homeowners who took advantage of payment relief on their mortgages actually rose an average of 14 points over the course of the pandemic, according to a new analysis by the New York Fed. That was a bigger jump than the seven-point increase seen among borrowers that didn’t take forbearance on their loans.

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Industry Events

RMAI Executive Summit

Receivables Management Association International

The Lodge at Spruce Peak
Stowe , Vermont
August 02 - 04 , 2021

916 482 2462

Collection and Recovery Solutions 2022

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 11 - 13 , 2022