CFPB URGED BY CONGRESS TO CRACK DOWN ON INACCURATE CREDIT REPORTS

WASHINGTON — High Senate Democrats urged the Client Monetary Safety Bureau to pursue far-reaching reforms of the credit score reporting trade and take a extra extra hands-on function to police errors in shoppers’ credit score histories. The seven senators advised CFPB Director Rohit Chopra in a Nov. 10 letter to handle credit score file errors that “can destroy lives.” “In an trade that impacts all People so immediately, even a small error price means tens of tens of millions of individuals will be denied jobs or housing by way of no fault of their very own,” wrote the lawmakers, together with Senate Banking Committee Chairman Sherrod Brown, D-Ohio, and Senate Finance Committee Chair Ron Wyden, D-Ore.

CFPB’s Payday Rule Back in Jeopardy, Perhaps Paving the Way for More EWA Programs

On August 31, 2021, the District Court for the Western District of Texas upheld the Payment Provisions in the Consumer Financial Protection Bureau’s (CFPB) 2017 “Payday, Vehicle Title, and Certain High-Cost Installment Loans” Rule (Payday Rule), but on October 15, 2021 the Fifth Circuit extended a stay on the Payday Rule while it hears an appeal from the Community Financial Services Association of America Ltd., and the Consumer Service Alliance of Texas. The Payday Rule initially had two components: 1) Mandatory Underwriting Provisions; and 2) Payment Provisions.

NYDFS proposes amendments to debt collection regulation

On October 29, the New York Department of Financial Services issued proposed amendments to 23 NYCRR 1, its regulation titled “Debt Collection by Third-Party Debt Collectors and Debt Buyers.”  The proposed amendments would make significant changes to the sections of the current regulation dealing with initial disclosure requirements, statute of limitations disclosures, substantiation requirements, and telephone and electronic communications.  They would also align the DFS regulation with several of the CFPB’s requirements in Regulation F, set to become effective on November 30, 2021.

11th Circuit Vacates Prior Hunstein Opinion but Leaves Door Open for Hunstein Copycat Claims to Continue

On October 28, 2021, in a 2-1 split panel decision, the 11th Circuit Court of Appeals vacated its prior opinion in Hunstein v. Preferred Collection and Management Services, Inc. (published at 994 F.3d 1341 (11th Cir. 2021)), and substituted a new opinion in its place. The new opinion is published, meaning it has immediate legal effect and is binding on future 11th Circuit judicial panels and district courts within the circuit.

FHA’s manufactured housing loan program gets a facelift

Manufactured housing is a topic that has gained some steam on Capital Hill as of late, with the White House announcing earlier in the year that it intends to address the lack of affordable housing in the nation by upping the available supply of MH.

5-year variable private student loan rates free-fall by nearly 2%

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 both fixed and variable rates during the week of Nov. 1, 2021.

Here’s how much debt millennials have on average

Outstanding consumer debt in the U.S. is currently around $14.88 trillion, representing an average individual debt of nearly $93,000, according to data from an Experian consumer debt study. And for millennials specifically, who range in age from 25 to 40, that number is almost as high: Millennials owe an average of $87,448. Experian analyzed its database of credit report information to measure the average credit card debt, student loan debt, auto loan debt and personal loan debt for millennials who hold each type of debt. Here’s a look at each:

Regulators done playing nice with mortgage servicers

The federal government’s top regulators announced Wednesday that they are collectively resuming mortgage servicing supervisory and enforcement practices in full, ending certain flexibilities it offered mortgage servicers at the onset of the Covid-19 pandemic. The announcement comes as servicers negotiate with over one million borrowers exiting forbearance plans. Servicers are now expected to fully comply with the rules spelled out in Regulation X, which protects consumers when they apply for and have mortgage loans, the regulators said.

Draft Proposed Debt Collection Rules Discussed in New York

ACA International and the New York State Collectors Association sought clarity on recent proposed rules and a shortened comment period on those rules in a meeting with the New York State Department of Financial Services (NYDFS) Monday.

State Attorneys General Lay Out Consumer Protection Priorities for 2022

For the first time in two years, State Attorneys General and their key consumer protection staff have gathered in Washington D.C. to attend the National Association of Attorneys General Fall Consumer Protection conference.  For State AG staff in particular, this meeting, and its Spring counterpart, may be the most important and well attended event of the year with over 400 attendees total.  Priorities for the Attorneys General are often shaped at these meetings, and they present a unique opportunity for industry to get insight.

New Calling Attempts Rules for Debt Collectors

New contact rules issued by the Consumer Financial Protection Bureau (CFPB) under the Federal Debt Collection Practices Act (FDCPA) go into effect on November 30, 2021. The rules, which were released last October, impact all forms of communication with debtors and others via calls, text messages, social media messages, and email.  

NYDFS proposes amendments to debt collection regulation

On October 29, the New York Department of Financial Services issued proposed amendments to 23 NYCRR 1, its regulation titled “Debt Collection by Third-Party Debt Collectors and Debt Buyers.”  The proposed amendments would make significant changes to the sections of the current regulation dealing with initial disclosure requirements, statute of limitations disclosures, substantiation requirements, and telephone and electronic communications.  They would also align the DFS regulation with several of the CFPB’s requirements in Regulation F, set to become effective on November 30, 2021.

3-year fixed personal loan rates drop, hit lowest point since September

Borrowers with good credit seeking personal loans during the week of Nov. 1, 2021, prequalified for rates that fell for 3-year terms and rose for 5-year terms compared to the previous week's fixed-rate loans.

Americans have never been in so much debt

New York (CNN Business)American households are carrying record amounts of debt as home and auto prices surge, Covid infections continue to fall and people get out their credit cards again. Between July and September, US household debt climbed to a new record of $15.24 trillion, the Federal Reserve Bank of New York said Tuesday. It was an increase of 1.9%, or $286 billion, from the second quarter of the year.

CFPB Takes Action to Prevent Avoidable Foreclosures

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB), jointly with other government agencies, announced a return to enforcement of critical protections for families and homeowners. Those protections, put in place in the wake of the Great Recession to prevent another foreclosure crisis, give families the chance to find alternatives to foreclosure before losing their home. With the majority of the over one million remaining COVID-19 forbearances expected to end before the end of the year, struggling homeowners will need these protections to avoid foreclosure.

NO PIGGYBACKING: Court Dismisses Claim of Out of State Plaintiff Despite Viable Claims of Second Plaintiff

One things clever class action lawyers like to do is bring claims by multiple plaintiffs in a single case, even where the plaintiffs received calls in different jurisdictions.

Governor Hochul Signs Consumer Protection Legislative Package

Governor Hochul today signed a legislative package relating to consumer protection. Legislation S.153/A.2382 enacts the The Consumer Credit Fairness Act, which will protect consumers from abusive debt collection, as many practices relate to old debts being sued on, debt from credit card issuers being resold to other creditors, and minimal information being provided to debt purchasers. By increasing transparency, minimizing gaps in State civil procedure laws, and preventing extreme actions such as wage garnishment and bank account freezing, consumers are given more time to act on burdensome debt collection practices. Legislation S.4823/A.3359 prohibits harassment from utility companies when negotiating a complaint or unpaid balance. Legislation S.1199/A.5838 requires the Public Service Commission to have at least one member who is an expert at consumer advocacy.  

Total Household Debt Climbs to Over $15 Trillion in Q3 2021, Driven by New Extensions of Credit

NEW YORK – The Federal Reserve Bank of New York's Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The Report shows that total household debt increased by $286 billion (1.9%) to $15.24 trillion in the third quarter of 2021. The total debt balance is now $1.1 trillion higher than at the end of 2019. It is also $890 billion higher than in Q3 2020, and $2.57 trillion higher, in nominal terms, than the $12.68 trillion peak seen in 2008.

Attorney General Bonta Urges Congress to Pass Legislation to Prevent Corporations from Forum Shopping When They File Bankruptcy

OAKLAND – California Attorney General Rob Bonta today joined a bipartisan coalition in urging Congress to pass the Bankruptcy Venue Reform Act, legislation that would close a loophole in the Bankruptcy Code that allows corporations to “forum shop” when they file bankruptcy. Forum shopping refers to the popular corporate tactic of filing for bankruptcy in a district a corporation believes to be most favorable to its interests — instead of the district where the corporation’s principal place of business or assets are located. 

Credit Unions Must Digitalize Products, Services and Support To Re-engage Existing Members

Coming out of the pandemic, consumers are looking for a lot of digital-first experiences. When it comes to financial services, many are moving to FinTechs and downloading new apps that offer innovative digital solutions that often save time and money.

Fonative Launches Real Recipient SMS

LOWELL, Mass., Nov. 9, 2021 /PRNewswire/ -- Fonative^®, the Compliant Communications^® company, has introduced Real Recipient SMS™, a new service that helps make sure text messages go to the intended recipient. Working with Fonative's PCI-DSS certified platform and RegReady^® APIs, Real Recipient SMS-enabled contact center applications and agents can securely send confidential information to the intended recipient, while leveraging the FCC's Reassigned Numbers Database to validate the phone number of the recipient for the text message.

CFPB education loan ombudsman report foreshadows active and wide-ranging engagement by “new CFPB” in student loan market

The report includes an analysis of the approximately 5,300 complaints related to private or federal student loans that the Bureau received during that period.  While complaints overall during this period trended lower, the decrease was most pronounced for federal student loan complaints which decreased approximately 32% compared to the prior year. Private student loan complaints decreased approximately 0.8%.  The Bureau cites the CARES Act and other relief measures for federal student loans as the likely reason for the decrease in federal student loan complaints.

Report: Cyber Attacks Skyrocket in Washington, Set Record

A report by Washington Attorney General Bob Ferguson's office says 6.3 million notices of data breaches have been delivered to state residents in 2021. This number eclipses the previous record of 3.5 million in 2018.

More borrowers are getting forbearance modifications

Forbearance predictably declined across the board last week as exits accelerated, but more borrowers are going into plan modifications because they are still struggling to recover their pre-pandemic income.

FTC Takes Action to Ban Payment Processor From Debt Relief Processing

The Federal Trade Commission obtained an order permanently banning a payment processor that facilitated a fraudulent student loan debt relief scheme from processing debt relief payments.  The order also requires the company and its owner to surrender $500,000 to the FTC for consumer redress.

Attorney General Bonta Continues Fight to Hold Ashford University Accountable for Defrauding and Deceiving California Student

OAKLAND – California Attorney General Rob Bonta today issued the following statement on the first day of trial in the state’s lawsuit against Ashford University, an online for-profit school, and its parent company Zovio, Inc. (formerly Bridgepoint Education) for engaging in false advertising and unlawful business practices. The California Department of Justice (DOJ) filed a lawsuit in 2017 alleging that Ashford University and Zovio provided false and misleading information to students to persuade them to enroll in the school and then used illegal debt collection practices when students struggled to pay their bills. DOJ seeks restitution for these students, a permanent injunction prohibiting Zovio from engaging in similar activities in the future, and civil penalties.

CFPB Issues TILA (Regulation Z) Annual Threshold Adjustments for 2022

The CFPB recently amended TILA’s implementing Regulation Z by updating the dollar amounts of various thresholds for several provisions that are adjusted annually. The new threshold adjustments will go into effect on January 1, 2022.

CFPB and the Use of Abusiveness – Ten Years In

A little over 10 years ago, the US Consumer Financial Protection Bureau (“CFPB” or “Bureau”) gained authority to enforce a prohibition against abusive acts and practices in connection with the provision of consumer financial products or services. This new authority raised a host of questions about what conduct was abusive and how the CFPB would use this new tool. Five years ago, we reviewed the CFPB’s use of abusiveness in its first four-plus years of existence. This Legal Update summarizes our prior findings and examines the CFPB’s use of abusiveness in the exercise of its enforcement, supervisory and rulemaking authorities over the subsequent five-plus years.

Beyond Big Tech: CFPB’s Payments Data Obsession May Broadly Target Third-Party Data Purchasers

In late October, the Consumer Financial Protection Bureau (CFPB) sent a shot across the bow at Big Tech’s use of consumer payments data. While much of the industry has focused on the impact on Big Tech, some lenders, lead generators and data brokers may be unaware how the recent orders impact them. They do, and we explain why below.

Report: Merchants Fight Data Breaches, Payments Fraud with Employee Education, Cybersecurity Insurance

Digital platforms from every corner of the web welcomed new customers amid the lockdowns and restrictions during the pandemic. More than 80% of United States consumers now use the internet every day to conduct basic errands or scroll through social media. While most consumers look favorably upon the many conveniences digital marketplaces offer, they still have valid cybersecurity and data privacy concerns.

CFPB issues advisory opinion on use of “name-only matching” by consumer reporting agencies; Director Chopra warns of enforcement consequences

The CFPB has issued an advisory opinion that affirms that the use of “name-only matching” by consumer reporting agencies, including tenant and employment screening companies, does not satisfy the FCRA requirement for a CRA ”to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the [consumer] report relates.”

HAPPY REASSIGNED NUMBER DATABASE DAY: The FCC’s New Recycled Number Spotting Database is Live—Here’s How to Use It

On December 12, 2018 the FCC first announced the creation of the reassigned number database. The results of years of advocacy by industry participants who advised the FCC they were being held strictly liable under the TCPA for efforts to contact their customers after phone numbers had changed hands without their knowledge, the database helps to assure that good actors in the ecosystem can safely detect phone numbers that may no longer be valid.

Remarks of Deputy Director Zixta Martinez at Academic Research Council Meeting

When Congress created the CFPB, it entrusted the Bureau with carefully monitoring financial markets to spot risks, ensure compliance with existing laws, educate consumers, and promote fairness and competition. As a consumer-centric regulator, research is a key part of meeting our statutory requirements. With that purpose in mind, the ARC was created to help us utilize and develop the latest research and methods along with the models we need to understand the impacts of emerging risks to consumers. With your insights, the CFPB will be better positioned to improve the methods we use to develop analytical frameworks that inform rulemakings and help us pose questions to identify the root causes of challenges that consumers face.

FTC Approves Fiscal Year 2020 Hart-Scott-Rodino Premerger Notification Report

The Federal Trade Commission and the Justice Department’s Antitrust Division released the agencies’ 43nd Annual Hart-Scott-Rodino Report. The report provides HSR Premerger Notification data for fiscal year 2020, and its release coincides with an unprecedented surge in pre-merger filings during the current fiscal year.

New York State DFS Issues Proposed Amendments to its Debt Collection Rules for Third-Party Debt Collectors and Debt Buyers

On October 29, 2021, the New York State Department of Financial Services (DFS) posted proposed amendments to its debt collection rules for Third-Party Debt Collectors and Debt Buyers (under 23 New York Codes, Rules, and Regulations Part 1) that could significantly change procedures for communicating with consumers.

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