18.7 Million U.S. Consumers in Financial Hardship Programs Experienced an Increase to their Credit Scores; Study Finds Their Performance Similar to Non-Hardship Consumers

Despite financial challenges brought forth by the COVID-19 pandemic, a new study from TransUnion (NYSE: TRU) found that 18.7 million U.S. consumers that entered a financial hardship program experienced an increase to their VantageScore 4.0 credit risk scores in 2020. This accounted for 58% of the total hardship population (excluding student loans).

CFPB Overcomes Challenge to PayDay Lending Rule

On August 31, 2021, the United States District Court for the Western District of Texas issued an opinion upholding the Consumer Financial Protection Bureau’s (CFPB) Rule regulating payday lending.  Community Financial Services Association of America, LTD., et al. v. CFPB, Case No. 1:18-CV-00295 (W.D. TX.) (Community v. CFPB).

FCC Announces Interim Charges for Reassigned Numbers Database

Callers subscribing to the Federal Communications Commission’s reassigned numbers database have several options for pricing come Nov. 1, when the database is expected to be available for full use.

DFPI Report Shows Changes in Consumer Lending, Decrease in PACE Program

SACRAMENTO – A new report from the Department of Financial Protection and Innovation (DFPI) shows a sharp decrease in some types of consumer loans and an increase in others, underscoring a change in consumer behavior likely impacted by a number of factors, including the global COVID-19 pandemic, an injection of state and federal financial assistance, and an increase in the reporting of alternative financing products.

Subprime Auto Loan Outcomes by Lender Type

Borrowers with subprime auto loans typically pay high interest rates and frequently default on their loans. Interest payments could compensate lenders for borrowers’ default risk, and so the high interest rates paid by borrowers with subprime loans could be explained by their higher default rates. But interest rates can vary across consumers for a variety of other reasons, too. A focus of this report is on how much of the variation of interest rates among subprime loans can be explained by differences in default rates, and how much is left unexplained.

FTC warns of ‘significant financial penalties’ if for-profit colleges deceive students

The Federal Trade Commission (FTC) is warning of “significant financial penalties” to for-profit colleges if they deceive students. The commission announced Wednesday that it is using its penalty authority to impose “significant sanctions” on schools that engage in unlawful practices and that such practices could lead to civil penalties of up to $43,792 per violation.

1099C Language in Collection Letters: Third Circuit District Court Grants Defendants’ Motion for Summary Judgment in FDCPA Case

In Bordeaux v. LTD Fin. Servs., L.P., a Third Circuit district court granted summary judgment to the defendants in a Fair Debt Collection Practices Act (FDCPA) case. In its holding, the court emphasized Third Circuit precedent that the inclusion of 1099C language in collection letters indicating that reporting to the IRS may be required in the event of settlement on a debt for $600 or more is not false, deceptive, or misleading if there is possibility that the defendants would need to report the settlement to the IRS (i.e., that settlement could be for more than $600).

Attorney General Bonta Files Administrative Complaint with Postal Commission to Block Current Piecemeal Effort to Degrade Postal Service Delivery Standards Nationwide

OAKLAND – California Attorney General Rob Bonta today joined a coalition of 20 attorneys general in an administrative complaint to ensure proper agency consideration of Postmaster General Louis DeJoy’s full 10-year strategic plan, which attempts to permanently slow U.S. Postal Service (USPS) delivery standards for first-class mail nationwide.

Department of Education announces Public Service Loan Forgiveness Program changes—3 things you need to know

On Wednesday, the U.S. Department of Education announced a series of changes to the Public Service Loan Forgiveness Program. PSLF allows borrowers with federal direct loans who make 120 qualifying monthly payments while working full-time for a qualifying employer to have the remainder of their balance forgiven. Qualifying employers include any federal, state, local or tribal government and not-for-profit organizations

VA resumes debt collections after 18-month pause due to the coronavirus pandemic

WASHINGTON — Millions of veterans must begin paying back debts to the Department of Veterans Affairs now that the agency resumed collections following an 18-month pause. The collection of debts from medical co-pays and benefits overpayments had been stalled to help ease financial hardships caused by the coronavirus pandemic. The pause initially ended Jan. 1, but VA officials extended it through September after receiving pressure from lawmakers and advocates who argued the economic effects of the pandemic were still being felt by veterans.

CFPB report finds spike in digital adoption of financial services during pandemic

The Consumer Financial Protection Bureau’s (CFPB) fifth biennial report to Congress on the consumer credit card market was released last week, highlighting an upwards trend in adoption of financial technology. The CFPB found digital engagement – whether reflected in enrollment in online portals, enrollment in mobile apps, opt-in rates to e-statements over paper equivalents or electronic payment of credit card bills – is growing consistently across all age groups and on nearly every platform type.

Robocalls dip as FCC rules kick in; advocates say more should be done

WASHINGTON – Robocalls to Arizonans dropped by more than 3 million in July, to about 84.4 million for the month, as the first phase of a new federal mandate took effect that requires phone companies to implement anti-robocall measures.

Higher loan limit now available for USDA guaranteed farm loans

The U.S. Department of Agriculture (USDA) is announcing a higher loan limit will be available for borrowers seeking a guaranteed farm loan starting Oct. 1, 2021, from $1.776 million to $1.825 million.  

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.”

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.

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. 

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.

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.

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 .

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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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