At a glanceFriday, October 01, 2021

Collection Industry News At A Glance - October 1, 2021
Friday October 1, 2021
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Congress Proposes Consumer Protection Whistleblower Reward Program

Senator Catherine Cortez Masto recently introduced the Financial Compensation for Consumer Financial Protection Bureau (CFPB) Whistleblowers Act, which would require the Consumer Financial Protection Bureau to provide rewards to whistleblowers who report original information relating to a violation of consumer financial law resulting in monetary sanctions exceeding $1 million.

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CFPB files opposition to trade groups’ motion to extend stay of payment provisions compliance date until appeal resolved; trade groups file response

The CFPB has filed its opposition to the motion of the two trade groups challenging the payment provisions in the CFPB’s 2017 final payday/auto title/high-rate installment loan rule (2017 Rule) that asks the court to extend its stay of the compliance date until 286 days after their appeal to the Fifth Circuit is resolved.  The trade groups have appealed from the Texas federal district court’s final judgment granting the CFPB’s summary judgment motion and staying the compliance date for the payment provisions until 286 days after August 31, 2021.

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Washington Supreme Court unanimously OKs tax on big banks

SEATTLE (AP) — The Washington Supreme Court on Thursday unanimously upheld a new tax on big banks aimed at providing essential services and improving the state’s regressive tax system.

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SBA waiving fees on certain loans through September 2022

The stimulus funds providing fee relief for certain Small Business Administration-backed loans just ran out at noon Wednesday, a day before the program was due to sunset. But there are still extra benefits available to small business borrowers, Inc. reports.

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Senate confirms Chopra to lead Consumer Financial Protection Bureau

The Senate on Wednesday confirmed Rohit Chopra as director of the Consumer Financial Protection Bureau (CFPB), approving a fierce critic of the financial sector to lead a powerful agency overseeing it. Senators voted 50-48 along party lines to confirm Chopra, with all 50 Democratic senators and no Republicans supporting his nomination.

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FCC is laser-focused on erasing the digital divide and crushing robocalls

For Jessica Rosenworcel, acting chair of the Federal Communications Commission, the moment is now to get the US on the right track toward ending the digital divide. That's what she's been trying to do with an influx of federal money aimed at getting Americans connected to the internet during the COVID-19 pandemic.

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More Regulatory Clarity on the Horizon for FinTech

On September 21, 2021, the FinTech task force of the U.S. House Committee on Financial Services held a hearing on consumer privacy. The hearing was live-streamed and the archived webcast is available on the Committee website.

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CFPB issues report analyzing complaint submission patterns by demographic characteristics

The CFPB has released its first in-depth report analyzing complaint submission patterns throughout the credit life cycle, by demographic characteristics.

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Atlanta-based debt collection company banned from industry

ATLANTA (CBS46) — The Atlanta-based debt collection company, Critical Resolution Mediation LLC, and its owners will soon be banned from the industry, according to a press release from the Federal Trade Commission.

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New rule ensures mortgage servicers provide options to potentially vulnerable borrowers exiting forbearance

As of September, approximately 1.6 million borrowers are exiting mortgage forbearance programs. As servicers expand their operations to match the surge of forbearance exits, servicers should remember that not all borrowers are similarly situated.

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FTC Returns $2M to Consumers Who Paid High Upfront Fees to Get “Funding” for Expensive, Ineffective Training Programs

The Federal Trade Commission is sending 8,843 checks totaling more than $2 million to consumers who were harmed by a company that charged them money for “funding” to pay for expensive and often ineffective training programs, but instead opened multiple credit card accounts in their names.

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Navient wants to exit the federal student loan program, impacting 6M borrowers

Student loan servicer Navient wants to get out of the federal loan servicing business, the company announced in a press release Tuesday. The decision will impact about 6 million student loan borrowers whose loans will be assigned to a new servicer.

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CFPB Report Finds Declines in Credit Card Debt, New Applications and Increases in Digital Engagement in 2020

WASHINGTON, D.C. – The Consumer Financial Protection Bureau released its fifth biennial report to Congress today on the consumer credit card market, finding that the market’s growth over the last few years reversed course in 2020. In reviewing the market for potential consumer harm, the report presents the latest research on consumer card use, cost, and availability. From a 2019 peak of $926 billion, credit card debt fell to $811 billion by the second quarter of 2020, the largest six-month decline on record, before reaching $825 billion by the end of the year.

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Justice Department Obtains Over $1.5 Million from American Honda Finance Corporation to Compensate Servicemembers Whose Federal Rights Were Violated

The Department of Justice announced today that American Honda Finance Corporation (AHFC) has agreed to settle a federal lawsuit alleging that it violated the Servicemembers Civil Relief Act (SCRA) by failing to refund a type of up-front lease payment to servicemembers who lawfully terminated their motor vehicle leases early. Under the settlement agreement, AHFC must pay up to $1,585,803.89 in compensation to 714 servicemembers who were harmed by the alleged violations.

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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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Portfolios For Sale

$19,601,601.49 Credit Cards
BAL Financial LLC

(617) 595-5794

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$104,399,000 Credit Cards
Capital Debt Solutions, LLC

(866) 305-5102

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

(800) 917-7183

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