At a glanceFriday, June 04, 2021

Collection Industry News At A Glance - June 4, 2021
Friday June 4, 2021
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‘Highly Unusual’ Quarterly Increase in Lending Activity

The number of mortgages secured by residential property of one to four units originated in the first quarter of 2021 indicates what experts are calling a quarter of "unusually strong home mortgage activity." Mortgage originations are up 3% from the previous quarter and 71% from Q1 2020 at 3.77 million, according to the monthly U.S. Residential Property Mortgage Origination Report from the property data analysts at ATTOM Data Solutions. This marks the highest level in 14 years and the first time since 2009 that the total number of home mortgages rose from a fourth-quarter period to the first-quarter period since 2009.

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Renters get more relief after government extends landlord forbearance program

Landlords with certain federally-backed mortgages can now defer payments through September as long as they continue to suspend evictions for struggling renters. The forbearance program was previously set to expire on June 30.

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Forgiving student loan debt is still on Biden’s agenda, just not in his budget

A promise to cancel huge amounts of student loan debt for millions of Americans was notably absent from the proposed $6 trillion budget President Joe Biden unveiled last week. Democrats in Congress say freeing borrowers from their loan burdens would allow them to buy their first homes, start businesses or invest for the future. Lawmakers and borrowers are continuing to urge the president to cancel up to $50,000 in student debt per person.

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Federal Reserve Chair Powell: ‘We do not seek to be climate policymakers’

Federal Reserve Chairman Jerome Powell said Friday that the central bank sees the need to monitor financial risks related to climate change, but will tread carefully to preserve its political independence.

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According to the latest Quarterly Report on Household Debt and Credit, total household debt rose by $85 billion (0.6 percent) to reach $14.64 trillion in the first quarter of 2021. Mortgage balances—the largest component of household debt—rose by $117 billion, while auto and student loan balances increased by $8 billion and $29 billion, respectively. Credit card balances declined by $49 billion—the second largest quarterly decline in the history of the series (which dates back to 1999). Credit card balances are $157 billion lower than they had been at the end of 2019, consistent with both paydowns among borrowers and constrained consumption opportunities.

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CFPB Director Confirmation Remains Held Up, Apparently by Partisan Concerns

Four months after President Joe Biden selected Federal Trade Commissioner Rohit Chopra as his nominee to serve as the next full-time director of the Consumer Financial Protection Bureau (CFPB), the nomination remains held up without a scheduled confirmation vote by the U.S. Senate which some observers attribute to concerns held by Democrats about the balance of power within the Federal Trade Commission (FTC). This is according to a story at American Banker.

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Practitioner tools for navigating financial exchanges with family and friends

The pandemic has caused financial hardship for millions of Americans, forcing many to turn to family and friends for help. As of September 2020, over 40 percent of U.S. adults were providing financial support to family members and friends during the pandemic, even when it’s put a strain on their own finances. Many families rely on informal lending and borrowing arrangements to weather the storm, especially in acute financial emergencies or when there is a lack of available assistance from lending institutions.

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Suspected Financial Services Digital Fraud Attempts Rise Nearly 150% Worldwide As Prevalence of Digital Transactions Increase

As more consumers go online for banking and other financial transactions, new research from TransUnion (NYSE: TRU) found that fraudsters are ramping up their efforts in the financial services industry. When comparing the last four months of 2020 (Sept. 1 – Dec. 31) and the first four months of 2021 (Jan. 1 – May 1), the company found the percentage of suspected global digital fraud attempts[1] in financial services increased 149%. In the U.S., financial services fraud attempts increased 109%.

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Richard Cordray Issues Federal Student Aid Guidance for Student Loan Servicers

The U.S. Department of Education Federal Student Aid (FSA) office, under the leadership of Chief Operating Officer Richard Cordray, has issued updated vendor guidance establishing procedures for handling record and data requests received by FSA’s vendors.

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Traditional Lenders Outperform Fintechs in Consumer Lending

Despite the significant disruption caused by Covid-19, traditional lenders have outperformed fintechs in consumer lending, a JD Power study has revealed. The consumer insights and analytics firm surveyed 2,467 personal loan customers to measure their satisfaction based on three factors — offerings and terms, loan management, and application and approval.

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Federal Student Loan Interest Rates to Increase July 1

Federal student loans will be more expensive for 2021-22 school year. Even so, borrowers will still see some of the lowest student loan interest rates of the past decade. Interest rates for new undergraduate federal student loans will rise from 2.75% to 3.73% for 2021-22. The interest rates for undergraduate, graduate and PLUS loans are determined by results of the U.S. Treasury Department’s May auction of 10-year notes, according to New America, a public policy think tank. The Treasury sells 10-year notes to raise money.

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Biden’s budget excludes student loan forgiveness, so what should you do with college debt?

During his presidential campaign, Joe Biden called for Congress to cancel up to $10,000 worth of student loan debt per borrower. Senate Democrats have called on the President to forgive federal student debt through an executive order, but Biden would rather have Congress come together to enact legislation rather than lean on his presidential authority.

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Addressing racial inequities in consumer finance markets

Over the last year, our country has faced many significant challenges, including the COVID-19 pandemic, the murder of George Floyd, and other acts of violence and racism. As a result, our nation has started a critical and long overdue conversation around race and equity.

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CFPB Auto Finance Consent Order: A Sign of Things to Come for Add-On Products?

On May 21, 2021, the Consumer Financial Protection Bureau (CFPB) and 3rd Generation, Inc. d/b/a California Auto Finance entered into a Consent Order in which the CFPB alleged unfair acts or practices in connection with an auto finance add-on product.

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11th Circuit Issues FDCPA Decision That Could Dramatically Impact Mortgage Servicers Operations

In Hunstein v. Preferred Collection and Management Services, Inc., 994 F.3d 1341 (11th. Cir. 2021), the Eleventh Circuit held that a debt collector’s communication of a consumer’s personal information to a third party print vendor violated the Fair Debt Collection Practices Act’s prohibition on third party communications in connection with debt collection under 15 U.S.C. § 1692c(b).

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United States: Split Decision: 5th And 11th Circuits Diverge On TCPA Standing

Standing, or the right to bring a lawsuit, is a contentious and often complicated doctrine in the world of the Telephone Consumer Protection Act ("TCPA"). TCPA standing requires that a plaintiff allege a concrete injury beyond just a pure statutory violation. The question raised by a recent opinion from the Fifth Circuit Court of Appeals (covering federal courts in Louisiana, Mississippi, and Texas) is how much of an injury in addition to a statutory violation is necessary to satisfy TCPA standing requirements. The Eleventh Circuit Court of Appeals has held that a plaintiff needs to allege more of a concrete injury than merely "invasion of privacy" for the receipt of unwanted text messages to have standing. In a case captioned Cranor v. Five Star Nutrition, the Fifth Circuit directly disagreed, holding that a statutory violation plus an allegation of "invasion of privacy" or "nuisance" is enough to establish TCPA standing.

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FTC Staff Provides 2020 Annual Financial Acts Enforcement Report to the CFPB

The staff of the Federal Trade Commission has provided its 2020 Annual Financial Acts Enforcement Report to the Consumer Financial Protection Bureau on its enforcement and related activities regarding the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA). The report on TILA, CLA, and EFTA highlights, among other things, the FTC’s enforcement actions related to automobile purchases and financing, payday lending, credit repair and debt relief, and electronic fund transfers.

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CFPB Auto Finance Consent Order: A Sign of Things to Come for Add-On Products?

According to the Consent Order, 3rd Generation purchases and services “subprime auto loans by taking assignment of retail-installment-sales contracts that automobile dealers make with borrowers.” As part of its loan agreement, 3rd Generation requires consumers to use its Loss Damage Waiver (LDW) product. 3rd Generation places the LDW product on the consumer’s account when the consumer has insufficient insurance; it “covers cancellation of the borrower’s debt in the event of a total vehicle loss, or the cost of a repair if the vehicle is not a total loss.” The addition of the LDW product on the consumer’s account results in a monthly LDW fee.

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Toyota Motor North America Introduces Privacy Portal to Make Consumer Data More Accessible and Transparent

PLANO, Texas (June 1, 2021) – As a demonstration of Toyota’s continued commitment and leadership in consumer privacy, Toyota Motor North America (TMNA) is proud to announce the creation of the Toyota Data Privacy Portal to increase data transparency, accessibility and control for Toyota and Lexus vehicle owners.

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Navy Federal Credit Union and Association of Defense Communities Launch Guiding Your Mission Program to Recognize Military Counselors

VIENNA, Va.--(BUSINESS WIRE)--The Association of Defense Communities (ADC), together with Navy Federal Credit Union, announce the launch of Guiding Your Mission, a new program focused on promoting financial wellness and career development within military and veteran communities. With decades of experience working in defense communities and with military families, both ADC and Navy Federal understand the unique challenges that members of the armed forces face when it comes to navigating financial journeys and planning for their futures.

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PNC signs purchase agreement for BBVA, based in Houston, creating the largest regional bank in the United States

PNC on Tuesday completed the acquisition of Houston-based BBVA USA Bancshares Inc. for $ 11.6 billion, including its banking subsidiary BBVA USA based in Birmingham, Ala. Over half of BBVA’s 641 national branches are in Texas.

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Claims Process Opens for Consumers Who Were Victimized by Fraudulent MoneyGram Transfers

Consumers who lost money to fraudsters and paid through MoneyGram between 2013 and 2017 can now file a claim to get their money back. This claims process is the result of settlements with the Federal Trade Commission and Department of Justice charging that MoneyGram violated previous agreements with the government to crack down on fraudulent money transfers.

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Valley Strong Credit Union to merge with Financial Center Credit Union

Valley Strong Credit Union and Financial Center Credit Union has announced their plans to merge pending regulatory approval and membership vote. If approved, the organization will operate under the Valley Strong name.

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CFPB examines risks, barriers to manufactured housing loans

Consumer Financial Protection Bureau (CFPB) officials have issued a report examining manufactured housing financing, noting low acquisition costs present higher interest rates and limited opportunity to refinance.

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United States: CFPB Files Another Status Report In Section 1071 Rulemaking Lawsuit

The CFPB has filed its fifth status report with the California federal district court as required by the Stipulated Settlement Agreement (Agreement) in the lawsuit filed against the Bureau in May 2019 alleging wrongful delay in adopting regulations to implement Section 1071 of the Dodd-Frank Act. Section 1071 amended the ECOA to require financial institutions to collect and report certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.

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CFPB report reveals what’s going on with manufactured home lending

Most manufactured home loan applications are denied and, despite the low-interest rates, very few manufactured housing loans were refinanced, according to a new report from the Consumer Financial Protection Bureau (CFPB).

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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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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