At a glanceWednesday, June 09, 2021

Collection Industry News At A Glance - June 9, 2021
Wednesday June 9, 2021
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New Arizona law allows debt collectors access to your home’s equity

PHOENIX — If you're looking to buy or sell a home in Arizona, a recently signed law could put a wrinkle in the process.

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FTC Sends Nearly $30 Million in Refunds to People Tricked into Enrolling by School Operator’s Lead Generators

The Federal Trade Commission is sending nearly $30 million in refunds to people tricked by agents working on behalf of Career Education Corporation (currently operating as Perdoceo Education Corporation), the operator of several post-secondary schools.

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Almost half of Americans are willing to take on debt in a post-pandemic spending splurge, survey finds

Americans are ready to start spending money to treat themselves — and 44% are willing to go into debt to do it, a report from finds. Millennials, ages 24-40, are most likely to take on more debt (59%) followed by Gen Zers, ages 18-24, coming in at 56%. Only 40% of Gen Xers, ages 41-56, and 32% of baby boomers, ages 57-75, said the same.

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Debt collector to return $475,000 to Wash. state consumers

SEATTLE (AP) — A Denver-based collection agency must return about $475,000 it collected improperly from up to 5,000 Washington consumers after state Attorney General Bob Ferguson prevailed in a lawsuit alleging unlawful debt-collection practices.

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Student loan forgiveness remains on the table, experts say

Student loan borrowers looking for promising signs that their debt will be forgiven have come up short of late. President Joe Biden didn’t include any debt cancellation in his budget request to Congress. Loan forgiveness was also absent from the president’s plans to rebuild the country’s infrastructure and his agenda to deliver relief to middle-class families, which included a national paid leave policy and subsidized child care.

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The average millennial has over $4,000 in credit card debt—other generations have more

Consumers of all ages carry credit cards, but some generations have larger outstanding balances than others. Members of Generation X have the highest average credit card debt at $7,155, followed by baby boomers and millennials, according to credit bureau Experian’s latest consumer findings. With an average credit card balance of $1,963, consumers in Generation Z carry the lowest credit card debt. Younger credit cardholders just starting out typically have lower credit limits than their older cohorts, so it isn’t unusual that Gen Z would have the lowest credit card debt.

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What Is Crypto Lending?

Cryptocurrency enthusiasts are often encouraged to hold on to their crypto holdings for the long haul. But if you need money, you might be considering cashing some of your cryptocurrency to cover a major or an unexpected expense. Depending on how much you need, though, you may be able to use your cryptocurrency as collateral for a loan. Additionally, many crypto platforms allow consumers to lend their digital assets in exchange for a hefty return , compared with the traditional high-yield savings account. Find out the different ways your crypto assets can work for you.

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CFPB issues FAQs on escrow accounts, Regulation E

The Consumer Financial Protection Bureau (CFPB) recently issued sets of frequently asked questions on Electronic Fund Transfer Act and Regulation E requirements, as well as servicing escrow accounts under Regulation X.

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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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NOT SO FAST: Court Holds Willfulness Requires Actual Knowledge of TCPA Violation

Third time’s the charm? Not quite, for a plaintiff in the Eastern District of Michigan who sought leave to amend the TCPA claims in his complaint to add a count for willful violations after already having amended the complaint twice.

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No Jurisdiction! Florida Company Defeats Massachusetts’ Litigant’s Sprawling TCPA Lawsuit On Personal Jurisdiction Grounds

Patrick Michaud sued a Florida home improvement company and a salesperson in Middlesex Superior Court, Massachusetts. He asserted various TCPA and state-law equivalent claims. The Defendants moved the case to federal court and then moved to dismiss for lack of personal jurisdiction. The Court agreed with Defendants and dismissed the case. Michaud v. Solomon, 20-cv-11999-DJC, 2021 U.S. Dist. LEXIS 102076 (D. Mass. May 29, 2021). The decision is a useful reminder that all TCPA defendants should carefully consider jurisdiction when facing a lawsuit in a locale far removed from their business operations.

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Nevada Medical Debt Bill Clears Governor’s Desk

On June 2, Nevada Gov. Steve Sisolak signed S.B. 248 , which requires a collection agency to notify a consumer before taking any action to collect a medical debt and prohibits certain practices relating to the collection of medical debt.

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Attorney General Ashley Moody issues tips to avoid phantom debt collector scams

TALLAHASSEE, Fla. (WCTV) - In her most recent Scams at a Glance video, Florida Attorney General Ashley Moody issued tips to avoid phantom debt collectors. Phantom debt is debt that doesn’t exist or has already been paid in full. Moody said that phantom debt scammers often pose as legitimate creditors or company representatives attempting to collect valid debts. Phantom debt scammers call targets and claim money is still owed and must be paid immediately.

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FTC Sends More Than $172 Million in Refunds to Consumers Misled by Rent-To-Own Provider Progressive Leasing

The Federal Trade Commission is returning more than $172 million to consumers who overpaid for merchandise they purchased using rent-to-own plans provided by Progressive Leasing. More than two million consumers will receive refund checks.

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Facebook, Inc. v. Duguid Limits the Definition of “Autodialer” Under the Telephone Consumer Protection Act

On April 1, 2021, the United States Supreme Court issued an opinion in Facebook, Inc. v. Duguid, clarifying the definition of automated telephone dialing system (“autodialer” or “ATDS”) under the Telephone Consumer Protection Act ("TCPA"). Noah Duguid sued Facebook under the TCPA, alleging that he received repeated texts in 2014 from Facebook notifying him of an attempted log-in even though he did not have an account.

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Transworld Systems Inc. completes acquisition of Account Control Technology Holdings, Inc., cementing the company’s position as the largest Accounts Receivable Management (ARM) company in the United States

LAKE FOREST, Ill., June 4, 2021 /PRNewswire/ --Transworld Systems Inc. (TSI), the largest U.S. technology-enabled provider of accounts receivable management (ARM) solutions, announced today it has completed its acquisition of Account Control Technology Holdings, Inc. (ACT Holdings), a leading debt recovery, ARM and business process outsourcing company. Transaction terms were not disclosed.

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CFPB Issues Rule Delaying the Mandatory Compliance Date of the New General Qualified Mortgage Final Rule

On April 27, the Bureau of Consumer Financial Protection (CFPB) issued a final rule to delay the mandatory compliance date for the General QM Final Rule until October 1, 2022. The CFPB stated that it issued the rule “to help ensure access to responsible, affordable mortgage credit and to preserve flexibility for consumers affected by the COVID-19 pandemic and its economic effects.” The mandatory compliance was originally set for July 1.

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Fixed-rate student loan refinancing tick up from record lows in early May

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans into 10-year fixed-rate loans began trending upward toward the end of May 2021, after hitting multiple record lows in late April and early May. Still, rates continue to represent a bargain compared to this time last year when 10-year rates topped 4%.

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Frozen But Not Forgiven, U.S. Student Loans Are Coming Due Again Soon

(Bloomberg) -- For millions of Americans, there’s an unwelcome side of the return to business-as-usual after the pandemic: They’ll have to start repaying their student loans again. More than 40 million holders of federal loans are due to start making monthly instalments again on Oct. 1, when the freeze imposed as part of Covid-19 relief measures is due to run out. It covered payments worth about $7 billion a month, the Federal Reserve Bank of New York estimated. Their resumption will eat a chunk out of household budgets, in a potential drag on the consumer recovery.

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Electronic Fund Transfers FAQs

This is a Compliance Aid issued by the Consumer Financial Protection Bureau. The Bureau published a Policy Statement on Compliance Aids, available here, that explains the Bureau’s approach to Compliance Aids.

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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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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