At a glanceWednesday, July 21, 2021

Collection Industry News At A Glance - July 21, 2021
Wednesday July 21, 2021
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Survey: Nearly a Third Owe More Than $30,000 on Student Loans

About 30% of respondents to a U.S. News survey in July say they owe more than $30,000 in student loans. Unfortunately, though almost a quarter owe $10,000 or less, some owe much more. More than 11% say they are paying off more than $50,000 in student loans

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America’s medical debt is much worse than we think

Groundbreaking research from Stanford economist Neale Mahoney indicates an even grimmer situation: Americans are actually saddled with at least $140 billion in outstanding medical debt. The earlier $81 billion figure — heavily cited during the last presidential election cycle — was based on a narrower measure of medical debt and a restricted sample of people.

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Florida Expands Telemarketing Laws

Florida recently amended its existing telemarketing laws, the Florida Do Not Call Act and the Florida Telemarketing Act. SB 1120, which went into effect July 1, 2021, imposes significant additional restrictions (and additional penalties for violations) on businesses making calls to Florida residents or Florida area codes.

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Federal Court Dismisses Autodialer Law Claims

Recently, a Michigan federal court delivered another blow in favor of telemarketers by dismissing a case captioned Barry v. Ally Financial, Inc. brought under the Telephone Consumer Protection Act (“TCPA”). The main issue at stake in the case was whether Ally Financial violated TCPA autodialer law when it placed calls to Ms. Barry. The Court held that the decision in Facebook v. Duguid clarified how courts should interpret “use of an autodialer”: calling or texting consumers from a list that was created using a random or sequential number generator. Because Ally’s contact list was comprised of its delinquent account customers, the Court held that it did not violate the TCPA’s autodialer provision.

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House passes bill to revive FTC authority to recover money for consumers

The House passed a bill Tuesday largely along party lines that aims to revive the Federal Trade Commission’s (FTC) authority to return money to constituents harmed by companies found to engage in deceptive practices.

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CFPB Takes Action Against FinTech Company for Originating Unauthorized Loans

On July 12, the CFPB issued a consent order against a FinTech company for facilitating point of sale financing activities without authorization from consumers. The consent order requires the company to pay up to approximately $9 million in redress to impacted consumers and a $2.5 million civil money penalty.

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Another student-loan company is shutting down its services, bringing total number of borrowers in limbo to nearly 10 million

Granite State Management and Resources is not renewing its loan-servicing contract after December.

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US Collection Agencies Trying To Recoup $140B In Consumer Medical Debt

Medical debt in the U.S. is more than any government department was aware, with collection agencies trying to recoup debts totaling some $140 billion, The New York Times reported on Tuesday (July 20), citing a new JAMA study.

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Federal Agencies Request Comments on Risk Management Guidance for Third-Party Relationships

On July 13, the Federal Reserve, FDIC, and OCC proposed risk management guidance to help banking organizations manage risks related to third-party relationships, including relationships with vendors, FinTech companies, affiliates, and the banking organizations’ holding companies.

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FTC Releases Agenda for PrivacyCon 2021

The Federal Trade Commission has released the final agenda for its sixth annual PrivacyCon event, which will be held online on July 27, and will include a focus on the privacy and security risks associated with algorithms, online advertising, and the Internet of Things.

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Here’s the average student loan debt of borrowers 50 to 61 years old

There are far fewer 50- to 61-year-olds who still carry student loan debt compared to younger age groups, but those that do have high average balances. According to statistics from the U.S. Department of Education’s Q4 2020 data, borrowers in this age group have an average balance of $42,290.32, which is nearly as much as the highest average debt load of $42,373.23 carried by the age bracket below them (35- to 49-year-olds). But while these two age groups, 35-to-49 and 50-to-61, have a similar average balance, the number of overall loan borrowers drastically decreases after age 49. There are just 6.2 million borrowers in the older age group, compared to 14.2 million borrowers in the younger age group.

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Debt.com poll: We’ll Spend More Preparing for Natural Disasters Because of COVID-19

FORT LAUDERDALE, Fla., July 20, 2021 /PRNewswire/ -- Americans will spend more preparing for natural disasters in 2021 than they did in 2020, and the reason is simple: COVID-19 showed just how scary life can be when you don't have enough supplies and planning.

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‘Domino effect’: Student loan giant loses another case over private debt discharge in bankruptcy

Student borrowers with certain types of private loans inched closer to being able to discharge that debt in bankruptcy after a New York court ruling. On Thursday, the U.S. Court of Appeals for the Second Circuit sided with student debtor Hilal Homaidan against student loan giant Navient (NAVI), which had argued that private student loans could not be erased under the existing bankruptcy laws. A three-judge panel determined that certain private student loans can be discharged in certain cases through bankruptcy, just like credit cards and other debts, if certain conditions are met.

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Rep. Maloney seeks bank overdraft fee protections

Rep. Carolyn B. Maloney (D-NY) has introduced last week legislation designed to aid consumers by establishing equitable practices for overdraft coverage program. The Overdraft Protection Act of 2021 builds on protections provided in Maloney’s Credit CARD Act, which the Consumer Financial Protection Bureau (CFPB) estimated has saved consumers $16 billion in its initial year of enactment.

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Attorney General Bonta Announces First-Year Enforcement Update on the California Consumer Privacy Act, Launches New Online Tool for Consumers to Notify Businesses of Potential Violations

SAN FRANCISCO – A year after enforcement of the nation’s toughest privacy law began, California Attorney General Rob Bonta today announced successful enforcement efforts and urged more Californians to take advantage of their new rights.

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New York Adds Text Messaging to its Definition of Telemarketing

This week, Governor Andrew Cuomo signed legislation that added text messaging to the state of New York’s definition of telemarketing communication for purposes of its no-call registry. The legislation, S.3941/A.6040, closes the loophole that previously exempted businesses from the no-call registry restrictions when the communication was sent via text.

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AG Healey to Debt Collectors: Child Tax Credit Payments Are Off Limits

BOSTON — Attorney General Maura Healey today issued guidance to protect families who have begun receiving a federal child tax credit this week from debt collection practices. The AG’s guidance ensures that these payments go directly to help families meet the needs of their children.

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Boomers just keep borrowing as millennials pay off debts

As consumers grow older, they make more money and pay off debts, in turn giving them more wealth than younger folks — or so the story goes. But that story has changed a bit in modern times as home and education costs have climbed while real wages stagnated so much that those born later have had much greater difficulty following a positive financial trajectory.

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Facts Matter—TransUnion‘s Impact on Privacy, Cybersecurity Litigation

The U.S. Supreme Court’s ruling in TransUnion v. Ramirez will have an impact on plaintiffs’ ability to bring litigation involving privacy breaches and cybersecurity, say Locke Lord attorneys Molly McGinnis Stine, Tara L. Trifon, and Lindsey E. Kress. Its finding that standing is based on concrete harm will most likely lead plaintiffs to seek relief in state court, they predict.

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United States: Florida’s New Mini-TCPA: What You Need To Know

Florida's Senate Bill 1120 became effective on July 1, 2021, and has striking similarities to the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227., et. seq. The statute, referred to as Florida's "Mini-TCPA," amends the Florida Telemarketing Act, Fla. Stat. § 501, et. seq. Florida's Mini-TCPA is a direct response to the U.S. Supreme Court's recent decision in Facebook, Inc. v. Duguid et al., 141 S. Ct. 193 (2020), issued on April 1, 2021, in which the Court unanimously held that the TCPA covers only random-fired calls and texts to cell phones from an automatic telephone dialing system (ATDS).

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Congressman Horsford Introduces Bill to Protect Nevadans from Unfair Double Taxation of Consumer Settlements

WASHINGTON, D.C. — Congressman Steven Horsford (D-NV-04) has introduced the End Double Taxation of Successful Consumer Claims Act, which would help ensure that Nevadans who win consumer protection lawsuits are not liable for taxes on the fees paid to their attorneys.

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Only 25% of those with student loans went to graduate school—but they owe around 50% of all student debt

When many people think of the student debt crisis, they think of jaw-dropping six-figure debt totals. But “many of those big numbers end up being outliers or they’re grad students who have accumulated [debt] based on continuing their education,” says Rick Castellano, vice president of corporate communications for Sallie Mae. He says undergraduate college students rarely borrow over $100,000.

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Millennials dominate P2P lending and borrowing: Report

Millennials dominate as the most influential cohort as both borrowers and lenders on peer-to-peer (P2P) lending platforms, says study. LenDenClub, among the country’s largest P2P lending platforms, released its 2020-21 report on the key borrowing and lending behaviour of its consumers (borrowers and lenders). According to the report by LenDenClub, young and tech-savvy Indians are much ahead of the previous generations when it comes to borrowing or even availing the platform for a new asset class as an investor.

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Today’s Mortgage Refinance Rates — July 19, 2021: 30- and 15-Year Loans Are Lower

Mortgage refinance rates are lower today for the 30- and 15-year loan. Refinance rates tend to be a bit higher than the rates you'll see for a new purchase mortgage, but right now they're quite competitive, historically speaking.

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St. Bede’s Church in Santa Fe helps pay off $1.4M in medical debt for 782 households

It has been said a dollar doesn’t go very far these days, but a local church used $15,000 to wipe out $1.4 million in medical debt for hundreds of struggling households. St. Bede’s Episcopal Church in Santa Fe applied $15,000 in donations to clear up eligible New Mexicans’ medical debt that had gone to collections — and had money left over to aid people in half a dozen Arizona counties. “You feel like you’re changing lives with this,” St. Bede’s spokeswoman Peg Maish said. “It’s not just writing a check. It feels more personal.”

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Financial and Compliance Professional Stephanie Schenking Joins Crown Asset Management Team

Crown Asset Management, LLC (CAM), a receivables management and specialty finance firm in Duluth, GA, proudly announces the addition of Stephanie Schenking as CAM’s Agency Relationship Manager. Ms. Schenking has over 20 years of experience in the financial services industry. As Agency Relationship Manager, she will serve as a liaison between CAM and network collection agencies, oversee agency adherence to CAM policy, and manage agency performance.

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D.C. Attorney General’s office protects residents against aggressive debt collectors

WASHINGTON (7News) — Coming out of the pandemic, the D.C. Attorney General’s office is expecting a tsunami of debt collection lawsuits and aggressive debt collectors.

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California Debt Collection License Applications Will Be Available Sept. 1

The California Commissioner of the Department of Financial Protection and Innovation (DFPI) announced Friday that license applications required under the Debt Collection Licensing Act will be online through the Nationwide Multistate Licensing System & Registry (NMLS ) Sept. 1. Applications will be due by Dec. 31, 2021, and required starting Jan. 1, 2022.

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Congresswoman Robin Kelly Introduces Bill to Protect Consumers from Discrimination

WASHINGTON, DC – Today Congresswoman Robin Kelly (IL-02) introduced the Consumer Equity Protection Act of 2021 to establish a federal taskforce to advise the Federal Trade Commission (FTC) on issues of equity impacting consumers of protected classes.

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FHFA Releases Policy Statement On Fair Lending

On July 1, the Federal Housing Finance Agency (FHFA) released a Policy Statement on its commitment to comprehensive fair lending oversight of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (collectively, “regulated entities”). The FHFA addressed its position on: (i) monitoring and information gathering; (ii) supervisory examinations; and (iii) administrative enforcement related to the Equal Credit Opportunity Act, the Fair Housing Act, and the Federal Housing Enterprises Financial Safety and Soundness Act. The FHFA added that the statement operates as a “foundation for future interpretations by the agency and its regulated entities.” Comments on the policy statement are due 60 days after publication in the Federal Register.

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Colorado Repeals Ban On Credit Card Surcharges

Colorado Governor Jared Polis signed into law a bipartisan bill repealing the state’s prohibition on credit card surcharges.

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Almost nobody is repaying their student loans

In the 2020 CARES Act, Congress gave student-loan borrowers a temporary break from repaying their loans. President Trump extended that twice and President Biden once, with loan payments now set to resume Oct. 1, 2021.

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Lender Risk Draws Greater Scrutiny As Auto Sales And Borrowing Surge

Auto sales are on the rise — and with those gains, it stands to reason that lending to help finance those purchases would also be up.

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CFPB Reports Trends In Financial Assistance

The Consumer Financial Protection Bureau (CFPB) continues to report on trends in financial assistance throughout the pandemic. The latest developments from this study reveal that most consumers have exited the payment assistance they received at the start of the pandemic.

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DC Emergency Legislation Webinar

RMAI TO OFFER WEBINAR ON TUESDAY, JULY 20TH

The emergency legislation that was passed amended items that previously only affected debt buyers, and now affect debt buyers and debt collectors. On July 13, 2021, the City Council of the District of Columbia passed emergency legislation to amend its debt collection law, § 28-3814. The amendments take effect when they are signed by D.C.’s mayor, which is expected any day. (The mayor has 10 days to sign.) The emergency measure will last 90 days from enactment. A “temporary” bill was also introduced that contains the same provisions. It has not passed the Council but is scheduled to be considered later and likely before the emergency measure would expire. The temporary measure would last 225 days from enactment if it were to become law. Find out about these important changes at RMAI's Emergency Legislation Webinar - July 20, 2021 @ 10:00 AM - 11:00 AM (PDT)

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Student loan forgiveness: Biden promise to forgive $10,000 in debt remains unfulfilled

Joe Biden's campaign website for the 2020 presidential election stated that a President Biden would "forgive a minimum of $10,000/person of federal student loans," which would erase all of the student debt for 15 million of the nearly 45 million American borrowers.

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There’s a New Wave of Scammers Targeting VA Home Loans

According to a news release, there has been a recent jump in scams targeting veterans with home loans. The scammers usually pretend to be affiliated with the government or a mortgage company and attempt to scam veterans out of money by some new and novel methods, along with some techniques that have been around for years, albeit with either a new COVID-19 related twist or new technology that makes it easier for the scammers to conceal their identity.

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Meet the typical 40-year-old millennial, who has $128,000 in debt, is not nearly as wealthy as their parents were, and is known as ‘geriatric’

The oldest millennials enter middle age this year. The generation is now aged between 25 and 40, according to the Pew Research Center's definition. Yes, like everyone, millennials are aging, but it's a hard concept to grasp when the media narrative has painted millennials as young, frivolous 20-somethings who love selfies and can't afford anything because they spend too much money on avocado toast.

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Analysis of CFPB’s New Ability-to-Repay Rule for Qualified Mortgages

On Dec. 29, 2020, the Consumer Financial Protection Bureau (CFPB) published a final rule amending Regulation Z’s Ability-to-Repay/Qualified Mortgage (QM) requirements (the New Rule). Regulation Z requires creditors to make a reasonable, good-faith determination of a consumer’s ability to repay their residential mortgage loan. Loans that comply with Regulation Z’s requirements qualify for certain protections from liability.

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U.S. Properties With Foreclosure Filings In First Six Months Of 2021 Hit All-time Low Of 65,082

IRVINE, Calif., July 15, 2021 /PRNewswire/ --ATTOM, licensor of the nation's most comprehensive foreclosure data and parent company to RealtyTrac (www.realtytrac.com), the largest online marketplace for foreclosure and distressed properties, today releasedits Midyear 2021 U.S. Foreclosure Market Report, which shows there were a total of 65,082 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first six months of 2021. That figure is down 61 percent from the same time period a year ago and down 78 percent from the same time period two years ago.

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Bill Would Allow Debt Settlement Companies to Operate in Ohio

A new bill in the Ohio Senate would allow for debt settlement companies to operate in Ohio. The sponsor says it’s about consumer choice, but opponents says that choice isn’t a good one.

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Florida’s New “Mini” Telephone Consumer Protection Act Takes Effect

On July 1, 2021, the Florida Governor signed legislation imposing new restrictions on telemarketing calls. The amendments to the Florida Consumer Protection Law and Florida Telemarketing Law, which are now in effect, create a new private right of action and track some elements of the federal Telephone Consumer Protection Act (TCPA) while going beyond the federal law in some areas.

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LendingClub Agrees to Pay $18 Million to Settle FTC Charges

Online lender LendingClub Corporation agreed to pay $18 million to settle Federal Trade Commission charges that the company deceived consumers about hidden fees that it charged and about whether their loan applications were approved.

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Joel Tucker shows up for sentencing this time, ordered to spend 12.5 years behind bars

A federal judge ordered Joel Tucker, a Prairie Village man with deep ties to Kansas City’s payday lending industry, to serve 12.5 years in prison for dodging taxes and for a scheme that targeted consumers to pay debts they often did not owe.

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Washington, D.C., Officials Approve Emergency Debt Collection Legislation Proposals

Emergency debt collection legislation introduced in Washington, D.C., on Monday was approved by the full City Council on Tuesday afternoon.

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Stakeholders Comment on Catch-22 of Colorado Student Loan Equity Act Requirements

Stakeholders, including ACA International members, that would be impacted by the Colorado Student Loan Equity Act, S.B. 21-057 signed into law by Gov. Jared Polis on June 29, sought more information on the regulations and their cost during a public hearing with the Colorado Attorney General’s office Wednesday.

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Agencies request comment on proposed risk management guidance for third-party relationships

The federal bank regulatory agencies today requested public comment on proposed guidance designed to help banking organizations manage risks associated with third-party relationships, including relationships with financial technology-focused entities. The proposed guidance is intended to assist banking organizations in identifying and addressing the risks associated with third-party relationships and responds to industry feedback requesting alignment among the agencies with respect to third-party risk management guidance.

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Student-loan companies aren’t prepared to restart payments in October, which could be a ‘financial catastrophe’ for borrowers

Elizabeth Warren asked student-loan servicers last month how they were preparing borrowers to restart payments. They responded on Tuesday that they need more time, calling the transition into repayment "unprecedented."

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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

2021 Atlanta Regional Networking & Advocacy Training Event

Renaissance Atlanta Waverly Hotel & Convention Center 2450 Galleria Parkway | Atlanta, GA 30339

Renaissance Atlanta Waverly Hotel & Convention Center 2450 Galleria Parkway
Atlanta , Gerogia
September 27 - 28 , 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

562-906-1101