At a glanceWednesday, June 16, 2021

Collection Industry News At A Glance - June 16, 2021
Wednesday June 16, 2021
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Delinquencies on credit accounts continue to be low despite the pandemic

This post is the first in a series documenting trends in consumer credit outcomes during the COVID-19 pandemic. Last August, we published a report on early trends in consumer credit outcomes through June 2020, which found largely positive trends in those outcomes despite widespread economic hardship due to the pandemic. In this series we will examine how the trends in consumer credit outcomes have evolved since June 2020.

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Department of Education Announces Approval of New Categories of Borrower Defense Claims Totaling $500 Million in Loan Relief to 18,000 Borrowers

The U.S. Department of Education (Department) announced today the approval of 18,000 borrower defense to repayment (borrower defense) claims for individuals who attended ITT Technical Institute (ITT). These borrowers will receive 100 percent loan discharges, resulting in approximately $500 million in relief. This brings total loan cancellation under borrower defense by the Biden-Harris Administration to $1.5 billion for approximately 90,000 borrowers.

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11th Circuit Court of Appeals Withholds Issuance of Mandate in Hunstein

On Monday, the 11th Circuit Court of Appeals issued an order withholding the issuance of the mandate as to the April 21, 2021, panel decision in Hunstein v. Preferred Collection & Mgmt. Servs.

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Fintech Lending Is On The Rise, But Default Rates Aren’t Pretty

Imagine a sub-prime consumer who wants to pay off their credit card bills, because their interest rates hover somewhere between 15% and 21%. They want to take out a personal loan with better repayment plans to pay off their existing debt. Are people more likely to go to a bank or credit union, when they’re researching their options, or are they going to be more intrigued by the fintech offering loans entirely online? The latter looks like a nicer option. And it’s what’s been happening. Fintechs have been snatching up market shares left and right from traditional banks and credit unions. Fintechs claimed 49.4% of the unsecured personal loan market in March 2019, up from 22.4% four years before, according to Experian.

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CFPB Marks World Elder Abuse Awareness Day With New Resources

The Consumer Financial Protection Bureau (CFPB) is marking June 15’s World Elder Abuse Awareness Day with the addition of new educational resources which are designed to combat harmful practices aimed at older Americans. This is according to a statement released by the Bureau on Tuesday.

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Lina Khan Sworn in as Chair of the FTC

Lina Khan was sworn in today as Chair of the Federal Trade Commission. President Biden named Khan, a Democrat, to a term on the Commission that expires September 25, 2024, and designated her as Chair. Khan was confirmed by the U.S. Senate on June 15, 2021.

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FTC Files Amended Complaint Seeking Civil Penalties Against Small Business Financing Providers

In a newly filed amended complaint, the Federal Trade Commission alleges that merchant cash advance provider RCG Advances and other defendants made multiple unauthorized withdrawals from small businesses’ banks, sometimes taking thousands of dollars more than the agreed repayment amount.

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Federal lawmakers are continuing to push for an end to robocalls by increasing penalties for automated, illegal calls through the Deter Obnoxious, Nefarious, and Outrageous Telephone (DO NOT) Call Act. U.S. Majority Leader Charles Schumer and Sen. Kirsten Gillibrand joined others in the Senate calling for an end to scam calls that often target and victimize the elderly. “This vital piece of legislation will give the FCC the tools needed to combat scammers who grossly violate the Telephone Consumer Protection Act and, all too often, target and defraud senior Americans,” said Gillibrand. “I am a fierce advocate of the DO NOT Call Act, and will do everything I can to put sensible protections in place and put an end to unsolicited robocalls.”

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The Agriculture Department would offer small farmers one-time loan forgiveness of up to $250,000 under legislation announced by five Democratic senators on Thursday. Lead sponsor Sen. Kirsten Gillibrand said she would try to include debt relief in the upcoming infrastructure bill “to make certain our farmers are not left behind.”

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Mortgage market slows as interest rates rise on shortened holiday week, MBA survey says

The mortgage market slowed down slightly over Memorial Day week, according to the Mortgage Bankers Association's latest weekly mortgage applications survey. The survey measured mortgage applications for the week ending June 4, 2021, and showed a decrease of 3.1% on a seasonally adjusted annual basis. That’s because, while mortgage rates ended up dipping slightly, that rate change didn't occur until the end of the week. Throughout the rest of last week, mortgage rates were up, offering homeowners less incentive to refinance their home loan. 

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HMDA Threshold Report Blog

The CFPB released a report today analyzing differences in lending patterns for lenders below and above the 100-loan closed-end threshold set by the 2020 Home Mortgage Disclosure Act rule. While this analysis is necessarily limited and preliminary, the report does find some differences in lending patterns for lenders above and below the threshold. Lenders below the 100-loan threshold appear to make more investment purpose loans to higher income borrowers and non-natural person borrowers (i.e., trusts, partnerships, and corporations), as well as more loans secured by properties in low-to-moderate income census tracts.

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Facing eviction? What to do before the CDC eviction moratorium expires

With the CDC eviction moratorium set to expire on June 30, 2021, you may be asking yourself “I gave my landlord the CDC Eviction Protection Declaration. What do I need to do now?”

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CFPB Issues FAQs on Electronic Fund Transfers

On June 4, the CFPB issued eight updated FAQs to the unauthorized transfer and error resolution provisions under the Electronic Fund Transfer Act (EFTA) and Regulation E. Highlights from the FAQs include the following:

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Spring 2021 Rulemaking Agenda

We have published our Spring 2021 Agenda as part of the Spring 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions , which is coordinated by the Office of Management and Budget under Executive Order 12866. The agenda lists the regulatory matters that, to further our consumer protection mission and mandate, we are currently pursuing under interim leadership pending the appointment and confirmation of a permanent Director. The permanent Director’s changes to our regulatory agenda will be reflected in the Fall 2021 Unified Agenda. We have also taken actions, and plan further actions, to focus our resources on addressing the adverse impacts to consumers in light of the ongoing COVID-19 pandemic and resulting economic crisis, and are taking concrete steps toward furthering our commitment to promoting racial and economic equity.

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Here’s how to decide what debt you should tackle first

Not all debt is the same. So how should you decide which to repay first? Amid the coronavirus pandemic last year and ensuing economic recession, debt grew for many Americans. In 2020, consumer debt ballooned to a new high of $14.88 trillion, a 6% increase from the previous year, according to credit rating company Experian.

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HUGE TCPA WIN!: Court Finds Aspect predictive Dialer Not an ATDS– Explains Away Footnote 7

In the best analyzed post-Facebook ATDS decision to date, a Court in South Carolina has ruled the Aspect predictive dialer is not an ATDS because it lacks a random or sequential number generator. The decision is Timms v. Usaa Fed. Sav. Bank, C/A No. 3:18-cv-01495-SAL, 2021 U.S. Dist. LEXIS 108083 (D.S.C. June 9, 2021) and–if defendants are lucky–the decision will form the bedrock for predictive dialer jurisprudence moving forward.

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Mortgage lenders loosened credit standards in May

Mortgage credit availability increased by 1.4% in May – a sign that volume-hungry lenders continued to loosen credit standards in a highly competitive market, according to Thursday data from the Mortgage Bankers Association. MBA’s Mortgage Credit Availability Index (MCAI) which uses 100 as a benchmark — increased to 129.9 in May. A decline in the MCAI suggests that lending standards are tightening while a higher number suggests loosening credit standards. Lenders concerned over borrowers’ ability to pay their bills at the beginning of the economic shutdown resulted in an exponential tightening of credit. However, May’s credit availability inched to its highest level since the early days of the pandemic, but remained at 2014 levels.

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Refinance lending more than doubles since last year

ATTOM Data Solutions reported that 3.77 million residential mortgages originated in the first quarter of 2021, up 3 percent from the previous quarter and 71 percent from a year ago, to the highest level in more than 14 years. The increase also marked the first time the total number of home mortgages rose from the fourth quarter to the first quarter since 2009, according to ATOMM’s first-quarter 2021 U.S. Residential Property Mortgage Origination Report. Lenders issued $1.16 trillion worth of mortgages in the first quarter of 2021, up 5 percent from the fourth quarter of 2020 and 81 percent from a year ago, to the largest quarterly amount since 2000, according to the report.

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Credit Card Debt Study

U.S. consumers continued to pay off their credit card debt during the first quarter of 2021, building on a record-setting performance in 2020. While 2020 was a year to forget in most respects, Americans excelled in terms of paying off credit card debt, getting rid of $82.1 billion in debt. This is a major accomplishment, considering that consumers have added an average of $45.6 billion in credit card debt per year over the past 10 years.

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Nearly half of Americans willing to take on debt this year, study shows industry analyst Ted Rossman detailed a recent study that unveiled  44% of Americans are willing to take on discretionary debt in the second half of 2021. Rossman said to expect a spending spike on goods and services on "Mornings with Maria" Thursday and argued it could impact your credit card debt.

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U.S. Treasury’s Yellen says Congress needs to fund debt relief programs

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen told lawmakers on Thursday that debt relief for poor and developing countries would be hampered without new funding, while $2.7 billion in current unmet U.S. commitments to the World Bank, International Monetary Fund and other institutions would grow.

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Attorney General Bonta Joins Brief in Supreme Court in Support of National Eviction Moratorium

OAKLAND – California Attorney General Rob Bonta today joined a coalition of 23 attorneys general in filing an amicus brief in the U.S. Supreme Court in support of the Centers for Disease Control and Prevention’s (CDC) eviction moratorium. Earlier this year, a coalition of property owners, property managers, and trade associations filed a lawsuit seeking to dissolve the moratorium, a move which would cause an unprecedented wave of evictions in states and local communities that lack their own protections for tenants.

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Industry Events

RMAI Executive Summit

Receivables Management Association International

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August 02 - 04 , 2021

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Collection and Recovery Solutions 2022

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Las Vegas , Nevada
May 11 - 13 , 2022