At a glanceWednesday, September 29, 2021

Collection Industry News At A Glance - September 29, 2021
Wednesday September 29, 2021
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WILMINGTON, Del. and RESTON, Va., Sept. 28, 2021 (GLOBE NEWSWIRE) -- Navient (Nasdaq: NAVI) and Maximus (NYSE: MMS) announced today that the companies have signed a definitive agreement to transfer the loan servicing for U.S. Department of Education-owned student loan accounts from Navient to Maximus through a contract novation, subject to the Department’s approval. In consultation with the U.S. Department of Education office of Federal Student Aid (FSA), Navient and Maximus have submitted a preliminary request for review. The contract novation will be subject to the consent of FSA.

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Updated Debt Collection and Private Student Loan Bills Headed to Governor’s Desk in California

California’s legislative session for 2021 is over and two bills impacting the accounts receivable management industry are headed to the governor’s desk in the coming weeks.

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AG files lawsuit seeking shutdown of collection agency

CHARLESTON — West Virginia Attorney General Patrick Morrisey filed a complaint asking the court to block a New York-based collection agency from doing business in the Mountain State, according to a news release.

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FTC Chair Lina M. Khan Appoints Directors of Bureau of Competition and Bureau of Consumer Protection

Federal Trade Commission Chair Lina M. Khan announced that she has appointed Holly Vedova as Director of the agency’s Bureau of Competition and Samuel A.A. Levine as Director of the Bureau of Consumer Protection. Ms. Vedova and Mr. Levine have been serving in their roles in an acting capacity since June of this year.

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Loan origination complaints spike during pandemic

Loan origination-related consumer complaints rose significantly over the first 18 months of the COVID-19 pandemic, according to a Consumer Financial Protection Bureau’s (CFPB) report published last week. The bureau’s research brief, which analyzed the relationship between U.S. Census characteristics and the share of consumers complaining about each stage of the credit life cycle, found that between February 2020 and July 2021 there was a “large increase in the volume of consumers with credit reporting and loan origination complaints.”

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Compass Bank, Air Academy Federal Credit Union to refund Colorado vehicle owners after failing to return unused GAP fees

Sept. 27, 2021 (DENVER)— Attorney General Phil Weiser today announced that Compass Bank, now called BBVA USA, and Air Academy Federal Credit Union will refund Colorado borrowers after failing to return GAP fees that were improperly retained by those institutions.

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Bogus Debt Collectors Permanently Banned from Collections in FTC Settlement

An Atlanta-based debt collection company and its owners will be permanently banned from the debt collection industry under the terms of a settlement with the Federal Trade Commission.

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Wells Fargo pays $72.6 million to resolve Justice Department claims it defrauded currency customers

Wells Fargo paid $72.6 million to settle a government lawsuit accusing the bank of defrauding hundreds of commercial customers. The bank admitted to overcharging 771 businesses on foreign exchange transactions from 2010 through 2017, according to the Justice Department lawsuit filed Monday.

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Student loan servicer that runs federal Public Service Loan Forgiveness program agrees to comply with state consumer protection laws

Sept. 28, 2021 (DENVER)—Attorney General Phil Weiser today announced that the student loan servicer that handles the federal Public Service Loan Forgiveness program, Pennsylvania Higher Education Assistance Agency, agreed to comply with a state law requiring consumer protection oversight after Colorado sued the servicer in May.

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LoanDepot Lawsuit Alleges Wide-Scale Fraud

The second largest mortgage lender in the country, loanDepot, found itself dealing with accusations by the company’s former chief operating officer, Tammy Richards, that surfaced on Aug. 22, claiming that founder and CEO Anthony Hsieh encouraged his sales team to cut corners on underwriting loans in order to drum up money during the refinance boom and prepare for the company’s initial public offering.

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Who has added credit card debt during the pandemic?

About half of Americans have credit card debt, and of those, a new survey from Bankrate finds over 40% have more debt now than they did when the pandemic began. That is especially true for younger people. Over half of people 40 and under owe more on their credit cards now than they did a year and a half ago, while people who are over 40 are significantly less likely to have added to their credit card debt during that time.

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States With the Most and Least Student Loan Debt

West Virginia tops the list of states with the most student loan debt and Utah has the least, according to a report from WalletHub.

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As Americans Spend, Credit Card Debt Is Ticking Back Up

NEW YORK (Reuters) - Early in the pandemic, there were encouraging and surprising signs about the decline of credit card debt. Now, that trendline seems to be changing. Many Americans stayed at home at the start of COVID-19 and did not spend like they usually do. They also received several rounds of emergency cash assistance, helping to chop away at those credit-card bills, at least temporarily.

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7th Cir. Holds Collecting ‘Fees on Fees’ Did Not Violate the FDCPA

The U.S. Court of Appeals for the Seventh Circuit recently affirmed judgment in a debt collector’s favor against claims that its efforts to collect attorney’s fees incurred to collect a debt — including the fees incurred in collecting the attorney’s fees — violated the federal Fair Debt Collection Practices Act.

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Point-of-Sale Loan Applicants Generally Use Other Forms of Credit More Actively

new study from TransUnion (NYSE: TRU) found that consumers seeking Buy Now, Pay Later (BNPL) and Point-of-Sale (POS) financing are also actively utilizing traditional credit – contrary to the assumption that these new credit offerings are taking market share away from credit card issuers and other lenders.

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Household net worth rises above $141 trillion, but debt up sharply as well

American households saw another significant jump in net worth as well as hefty increases in debt and credit, the Federal Reserve reported Thursday. Thanks in good part to a big surge in stock market earnings, total household net worth rose to $141.7 trillion through the second quarter of 2021, the central bank’s Financial Accounts of the United States report showed. That was good for a $5.85 trillion increase, or 4.3% from the first quarter. Looking back to a year ago, when the nation was in the early days of the Covid-19 pandemic, the net worth total represents a 19.6% increase.

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FTC Testifies before the Senate Special Committee on Aging About the Agency’s Work to Halt Practices that Prey on Older Americans

Bad actors who prey on older Americans should be stopped in their tracks, and today, the Federal Trade Commission is testifying before the Senate Special Committee on Aging on our work to protect older adults and ensure that these predators face consequences.

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Consumer Complaint Research Brief: Consumer complaints throughout the credit life cycle, by demographic characteristics

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today released its first in-depth report analyzing complaint submission patterns by U.S. Census tract. The report, “Consumer complaints throughout the credit life cycle, by demographic characteristics,” finds that the complaints from wealthier communities and communities with higher percentages of white, non-Hispanic residents were more frequently about loan origination and performing servicing, while the complaints from communities of color and lower income communities were more frequently about credit reporting, identity theft, and delinquent servicing.

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Bill encourages consumer fraud reporting by whistleblowers

Sen. Catherine Cortez Masto (D-NV) has introduced a bill she said incentivizes consumer fraud reporting to the Consumer Financial Protection Bureau (CFPB).

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New York Adds Text Messaging to Telemarketing Law

Bringing the law into the 21st century, the New York legislature has updated the state’s telemarketing statute to add text messaging. Joint bills in the Senate and Assembly modified Section 399-z of the General Business Law to include the term “electronic messaging text” to multiple definitions in the statute, such as “telemarketer,” “telemarketing” and “telemarketing sales calls.”

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10-year fixed student loan rates slide, while 5-year variable rates bump up

The average private student loan rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to take out student loans fell for fixed rates and rose for variable rates during the week of Sept. 13, 2021.

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California: CPPA Board seeks public comment on proposed rulemaking under CPRA

The California Privacy Protection Agency Board ('CPPA Board') issued, on 22 September 2021, an invitation for preliminary comments on proposed rulemaking under the California Privacy Rights Act of 2020 ('CPRA'). In particular, the CPRA amends and extends the California Consumer Privacy Act of 2018 ('CCPA'), and to implement the law, the CPPA Board was vested with the administrative power, authority, and jurisdiction to implement and enforce the CCPA, where responsibilities include updating existing regulations, and adopting new regulations.

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DFPI Sanctions Debt Collector in First Action Under the California Consumer Financial Protection Law

SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) today issued its first enforcement action against a debt collector and debt buyer, Murrieta-based F & F Management Inc. (F & F), for violating the California Consumer Financial Protection Law (CCFPL) by unlawfully threatening to sue consumers and garnish their wages, and submitting negative information to a credit bureau without notifying consumers as required, a practice known in the industry as debt parking.

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Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in Underserved Locations

The COVID-19 pandemic resulted in significant turmoil in the U.S. economy, leading to temporary and permanent business closures and high unemployment. In response, in March 2020, Congress established PPP under the CARES Act and ultimately provided commitment authority of approximately $814 billion for the program over three phases. When initial program funding ran out in 14 days, concerns quickly surfaced that certain businesses were unable to access the program, prompting a series of changes by Congress and SBA.

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Consumer Financial Protection Bureau Announces New Advisory Committee Members

WASHINGTON, D.C. – CFPB Acting Director Dave Uejio today announced the appointment of new members to the Consumer Advisory Board (CAB), Community Bank Advisory Council (CBAC), Credit Union Advisory Council (CUAC), and Academic Research Council (ARC). These committee members will advise Bureau leadership on a broad range of consumer financial issues and emerging market trends.

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Demand for SBA 7(a) loans is rising. These 50 lenders doled out the most in Q2

The Small Business Administration became one of the most important federal agencies for small business owners during the Covid-19 pandemic — and its traditional lending programs have seen a boost as a result. The agency, which ran the popular Paycheck Protection Program as well as the Economic Injury Disaster Loan Program, the Shuttered Venue Operators Grant Program and the Restaurant Relief Fund, is also seeing businesses continue to sign up for its 7(a) and 504 loans — which offer a variety of lines of credit, lending and acquisition uses.

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Are cyber security risks heightened by our new working culture?

While some people believe our working environments are more vulnerable now, others point out that companies are getting better at preventing attacks. The truth is probably somewhere in the middle, but it’s clear the inherent cyber risk has gone up.

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New Identity Management Study from LexisNexis Risk Solutions and Aite-Novarica Group Reveals Increase in Fraud as Industry Reports Uptick in Digital Transactions

ATLANTA — A new insurance industry research study reveals that insurance carriers saw an increase in consumer digital activity across both underwriting (77%) and claims (76%) during the coronavirus pandemic and indicated this recent increase in digital activity has in turn spurred more identity fraud activity, according to 67% of survey respondents. Authored by Aite-Novarica Group and presented by LexisNexis® Risk Solutions, a leading provider of data, advanced analytics and technology for the insurance industry, the Insurance Fraud: Rethinking Approaches in the Digital Age report provides advice for carriers on how to identify vulnerabilities and ways to mitigate these vulnerabilities, while providing the ultimate customer experience to genuine consumers.

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Seventh Circuit vacates restitution award to CFPB in action against mortgage-assistance relief companies and lawyers

In a decision issued earlier this summer, the U.S. Court of Appeals for the Seventh Circuit vacated the district court’s order awarding restitution, mandating civil penalties, and issuing an injunction in an action brought by the CFPB against two mortgage-assistance relief companies and four lawyers associated with the companies.  The decision imposes significant limitations on the Bureau’s ability to recover both monetary and injunctive relief in enforcement actions.

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NCUA has asked credit unions to comment on crypto. So far, crickets.

The National Credit Union Administration released a request for information in July, calling on credit unions and other related entities to provide feedback on how distributed ledger technology and decentralized finance applications are viewed and used by the industry. The agency asked how blockchain can serve members and meet business objectives, as well as what hurdles exist to implementation and what risks the technology could pose to the institutions. Comments in response to the RFI are received and posted by the agency in batches to the government portal, with the frequency increasing closer to the deadline which in this case is Sept. 27.

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U.S. Bank to Acquire MUFG Union Bank

MINNEAPOLIS and NEW YORK – September 21, 2021 – U.S. Bancorp (NYSE: USB) today announced that it has entered into a definitive agreement to acquire MUFG Union Bank’s core regional banking franchise from Mitsubishi UFJ Financial Group (NYSE: MUFG) in a transaction that will bring together two premier organizations with a focus on being the leader in serving customers and communities in California, Washington and Oregon.

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Meanwhile in Massachusetts…..New Bill Would Outlaw Using Local Area Codes Unless Caller is In State–$10K in Damages Available

Anyway, new bill in MA would make this (amongst other things) illegal: “caus[ing] to be displayed a Massachusetts area code on the recipient’s caller ID unless the person making, placing or initiating the call or text message maintains a physical presence in the commonwealth…”

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Portfolios For Sale

$19,601,601.49 Credit Cards
BAL Financial LLC

(617) 595-5794

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$1,657,245.02 Other
Sea Side Management, LLC

(800) 917-7183

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