At a glanceWednesday, October 06, 2021

Collection Industry News At A Glance - October 6, 2021
Wednesday October 6, 2021
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Governor Newsom Signs Consumer Financial Protection Legislation – Includes Protecting Californians from Scams and Unscrupulous Practices in Debt Settlement and Collection

SACRAMENTO – Governor Gavin Newsom on Monday signed a package of consumer financial protection legislation to expand consumer rights and increase transparency, protecting Californians from scams and unscrupulous practices in automatic renewal subscriptions, debt settlement and collection and other financial services. “These bills curb predatory and abusive practices used to target vulnerable Californians, and empower consumers to make informed decisions with their hard-earned money,” said Governor Newsom. “With the nation’s strongest state consumer financial protection watchdog and these new measures, California continues to have the backs of working families recovering from the pandemic.”

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Lawmakers agree on need to rein in fintech data sharing

House Financial Services Committee Democrats and Republicans have found initial common ground on the need for stronger protections for consumer financial data used by third-party companies that share the data across bank accounts, payment apps and other services. Financial Services Chairwoman Maxine Waters, D-Calif., said she will work closely with the Consumer Financial Protection Bureau as it works to issue regulations on financial data. However, Congress should act on the issue, she said. The Senate confirmed Rohit Chopra on Sept. 30 to be the new director of the CFPB.

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Some Lawyers Must Soon Be Licensed By The DFPI

California had been one of 16 states that did not require licensing of debt collectors.  That changed last year with the enactment of the Debt Collection Licensing Act.  2020 Cal. Stats. ch. 163 (SB 908).  The DCLA will effect at the beginning of next year and provides for the licensing and regulation of debt collectors. 

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Debt Collection Rule 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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California privacy agency names executive director

The California Privacy Protection Agency (CPPA) announced Monday the appointment of Ashkan Soltani to the position. Soltani was among the architects of the California Consumer Privacy Act (CCPA), which the CPPA will enforce until the enhanced California Privacy Rights Act (CPRA) takes effect Jan. 1, 2023.

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Updated Debt Collection Requirements Bill Approved by California Governor

Consumer notification requirements for debt collectors were part of consumer financial protection legislation signed by Gov. Gavin Newsom in California on Monday, according to a news release from the governor’s office .

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FTC Targets False Claims by For-Profit Colleges

The Federal Trade Commission put 70 for-profit higher education institutions on notice that the agency is cracking down on any false promises they make about their graduates’ job and earnings prospects and other outcomes and will hit violators with significant financial penalties.

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US Department of Education overhauls Public Service Loan Forgiveness program

(CNN)The US Department of Education announced major changes Wednesday to a federal student loan forgiveness program that the agency says could bring relief to thousands of borrowers working in government and nonprofit sectors.

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Biden administration to reveal major student debt forgiveness overhaul this week

The Department of Education is expected to announce a significant overhaul of its Public Service Loan Forgiveness (PSLF) program, which could cancel loans for tens of thousands of borrowers and reduce the number of required payments for even more.

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Consumer Bankers Association urges CFPB to uphold consumer protections

The Consumer Bankers Association (CBA) sent a letter to the Consumer Financial Protection Bureau (CFPB), advocating for the highest level consumer protections, particularly in the fintech lending market.

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Free Webinar for Maryland Debt Collection Agencies

The Maryland office of the Commissioner of Financial Regulation announced it will host a free virtual information session Oct. 26 for Maryland consumer debt collection agencies.

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Deadline to request initial forbearance for HUD/FHA, USDA, or VA backed loans is extended until National Emergency ends

If the coronavirus pandemic has made it difficult for you to make your mortgage payments, it’s not too late to request COVID hardship forbearance from your mortgage servicer. Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances.

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Can a post office be a bank? New services test a progressive priority

WASHINGTON — The U.S. Postal Service has quietly begun offering a handful of new or expanded financial services in four cities, a potential first step toward a return to postal banking, which advocates say could help rescue the agency's finances and assist millions of people who have limited or no access to the banking system.

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Public Service Loan Forgiveness Program will be revamped in a few weeks, White House says

Major changes are coming for one of the federal government's most maligned student loan programs, and they could erase the debt of thousands of school teachers, military members and government workers.

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Justices pass on litigation funder’s challenge to CFPB authority

(Reuters) - The U.S. Supreme Court on Monday declined to hear a case challenging the U.S. Consumer Financial Protection Bureau's authority to pursue enforcement actions brought before the court held that the agency's structure was unconstitutional.

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USPS is trying out a new business, which could transform how millions access cash and pay bills

The U.S. Postal Service quietly began offering paycheck-cashing services at several East Coast post offices last month, testing a plan that financial experts say has the potential to transform how low-wage and underserved Americans access their money.

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What Can Payments Execs Expect From Chopra’s CFPB? ‘Very Aggressive Regulating,’ Say Some

Payments observers are expecting a tougher regulatory approach from the Consumer Financial Protection Bureau with the confirmation on Thursday of Rohit Chopra as executive director of the 10-year old federal agency. “The agency will likely return to the days of director Cordray,” predicts one close observer who asked not to be named. Richard Cordray served as the CFPB’s first director before stepping down in 2017. His aggressive enforcement approach came in for frequent criticism from the financial-services industry.

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Starting today, former MSB/Globe students to finally receive nearly $24M in debt forgiveness, $16M in restitution for fraud, illegal lending

September 30, 2021 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that $23.6 million in debt relief has now finally been approved for former students of Minnesota School of Business (MSB) and Globe University (Globe) and that $15.6 million in additional cash restitution will begin to be distributed, as early as today. This relief is the result of an agreement that fully resolves the State’s lawsuit against MSB and Globe and proceedings in federal bankruptcy court. The agreement, first reached in March, has now been approved by a bankruptcy court and confirmed by all parties, finally resolving the hotly contested case. The Attorney General’s office first sued MSB and Globe, alleging consumer fraud and illegal lending practices, in 2014.

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Got more than $600 in the bank? The IRS wants the OK to snoop on you

Credit unions in Arizona are opposed to an item being considered as part of the proposed $3.5 trillion reconciliation bill. In fact, anyone with a bank or credit union account has good reason to be worked up. The bill may include a provision requiring financial institutions to report to the IRS the account transactions (deposits or withdrawals) of accounts that hold more than $600.

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Neiman Marcus is notifying nearly 5 million customers about a data breach that exposed names and payment card numbers

Millions of Neiman Marcus customers may have had their personal and financial information exposed in a data breach, the retailer said.

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FTC Returns $1.1 Million to Consumers Who Lost Money to Alleged Scammers Selling Bogus Income Opportunities

The Federal Trade Commission is returning more than $1.1 million to consumers who paid for an allegedly bogus money-making opportunity that called itself “8 Figure Dream Lifestyle.”

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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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