At a glanceWednesday, December 08, 2021

Collection Industry News At A Glance - December 8, 2021
Wednesday December 8, 2021
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House passes compromise version of NDAA

The House passed a version of the fiscal year 2022 National Defense Authorization Act (NDAA) Tuesday night. This version does not contain bank-requested expansion of an arrangement allowing waivers for certain costs for credit unions on military installations.

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Credit Unions That Lag on Digital Strategy Lose out on Customer Loyalty

For financial institutions of all types — but especially credit unions — the great digital shift has taken on special urgency over the past 18 months. Most of them, at least. PYMNTS/PSCU joint research recently found that as many as 15% of CUs still haven’t committed to a comprehensive digital strategy to modernize operations and respond to members’ (and prospective members’) demands for a better customer experience.

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Apply for California Debt Collection License by Dec. 31

California became the latest state to require debt collection licenses this year and the deadline to apply is quickly approaching. The Debt Collection Licensing Act (DCLA), which takes effect Jan. 1, 2022, requires any person engaging in the business of debt collection in California to be licensed by the California Department of Financial Protection and Innovation (DFPI).

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Visa to open crypto consulting service for banks as sector draws in investors

Visa (V) is launching a consulting service that caters to banks weighing their own plans for cryptocurrencies, the company announced on Wednesday, leveraging its own crypto experience as the sector increasingly goes mainstream.

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Statement by CFPB Director Rohit Chopra on HUD Guidance on Special Purpose Credit Programs

WASHINGTON, D.C. — Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra issued the following statement: Earlier today, the U.S. Department of Housing and Urban Development released guidance  clarifying that special purpose credit programs that conform with the Equal Credit Opportunity Act and Regulation B generally do not violate the Federal Fair Housing Act. 

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Nine Critical Capabilities that Collection Software Systems Need in 2021

No doubt 2020 was one of the most difficult years on record for the collection industry. Unfortunately, 2021 looks to be every bit as daunting given the latest major challenges: • Ongoing social & economic impacts from the COVID-19 Virus (deferred payments/rising defaults) • Expanding list of State & Federal regulatory requirements (CFPB New Rulings) • Changing consumer payment behavior and contact preferences (agentless collections/texting) For collection operations to tackle these major challenges (and those that may follow), they will need their collection software platform to provide a critical set of capabilities. The bad news is many collection software systems in use today are not likely to have these requisite capabilities (at least not in the form or to the degree needed).

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CFPB Issues Final Rule to Facilitate Transition from LIBOR

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today finalized a rule facilitating the transition away from the LIBOR interest rate index for consumer financial products. The rule establishes requirements for how creditors must select replacement indices for existing LIBOR-linked consumer loans after April 1, 2022. No new financial contracts may reference LIBOR as the relevant index after the end of 2021. Starting in June 2023, LIBOR can no longer be used for existing financial contracts. The transition away from LIBOR was set into motion after a criminal rate-setting conspiracy implicated large international banks and undermined public confidence in the index. Approximately $1.4 trillion of consumer loans are estimated to be currently tied to LIBOR.

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Wells Fargo sees borrower defaults starting to rise from low levels reached during pandemic

Wells Fargo is seeing borrower defaults start to rise from lows reached during the pandemic as financial conditions begin to normalize, CEO Charles Scharf said Tuesday. "We would say the bottom has been reached," he said at the Goldman Sachs U.S. Financial Services Conference.

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Senate confirms FCC Chair Rosenworcel to another term, narrowly avoiding a Republican majority

The Senate voted 68-31 to confirm Federal Communications Commission Chair Jessica Rosenworcel, the first woman to hold that title, to another five-year term, narrowly avoiding a Republican majority at the agency once her current term was set to expire at the end of the year.

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Ransomware Attacks Continue to Cause More Underwriter Scrutiny

Continued widespread cyber attacks have leaders in just about every industry wary and watchful, and insurance underwriters are no exception. Given the increase in claims from recent ransomware attacks, cyber insurers are requiring even more information as part of their underwriting processes.

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93% of payday loan borrowers regret taking out their loans, survey finds

The vast majority (93%) of borrowers regret taking out their payday loan, according to a new survey from DebtHammer. Just 1% of respondents said their financial situations improved after borrowing a payday loan, while 84% said they were worse off.

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In its most recent Data Breach Industry Forecast released Monday, credit bureau and information services firm Experian identified five areas where it believes cybercriminals will look for opportunities in 2022.

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ACI Worldwide and Dover Fueling Solutions Collaborate on Data Security Offering for Increased Fuel Pump Security

MIAMI & AUSTIN, Texas--(BUSINESS WIRE)--ACI Worldwide (NASDAQ: ACIW), a leading global provider of real-time digital payment software, and Dover Fueling Solutions (DFS), a leading developer of advanced customer-focused technologies, services and solutions for the fuel and convenience industries, today announced their collaboration on a point-to-point encryption (P2PE) data security offering. This will increase protection for consumers’ credit and debit cards at fueling dispensers, significantly reducing the risks of costly data breaches for these merchants.

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How Consumers Pay for the Half-Trillion Dollars They Spend Every Month

Consumers in the United States spend a collective $555 billion each month buying groceries, food, retail products and travel-related purchases — and the way they pay is changing faster than the tides.

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Rent Payment History Offers Greater Predictability into Consumer Credit Performance

As financial institutions look for new ways to promote financial inclusion efforts in the new year, a new TransUnion (NYSE: TRU) analysis underscores the importance of rent payments as an alternative credit data asset and how this information can provide greater insight into future consumer credit performance.

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Attorney General Bonta Announces Sentencing for Student Loan Scam and Computer Crimes

OAKLAND – California Attorney General Rob Bonta today announced the sentencing of four individuals for their roles in perpetrating a student loan assistance scam and related computer crimes through their now-defunct company, Student Loan Relief Department. The defendants’ company masqueraded itself as a legitimate source of help and feigned association with the U.S. Department of Education (ED) in order to gain the trust of distressed student loan borrowers and access their personal information.

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CUNA Research: Unemployment Decline Shows Signs of Economic Recovery


Credit Union National Association (CUNA) Senior Economist Dawit Kebede, PhD, issued the following statement in response to the Labor Department’s November Jobs Report:

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Oliphant United Announces New Ownership

Sarasota, FL., December 6, 2021 -- Oliphant United LLC (“Oliphant”), a leading debt buyer accounts receivables management (“ARM”) organization for the debt industry has announced the sale of controlling equity interest to Skypeak Fund I (“Skypeak") and International Capital Access Group (“ICAG”) for an undisclosed sum. Oliphant has a long and successful heritage in the debt purchasing and debt servicing industry dating back to 1992; a history not only coupled with strong family-oriented values, but one rooted in cultivating steadfast and lasting relationships with both lenders and borrowers.

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FTC Overhauls Safeguards Rule Regarding Customer Information Applicable to Auto-Dealers and Other “Financial Institutions”

On October 27, 2021, the FTC announced that it intends to publish (1) a final rule to amend the Standards for Safeguarding Customer Information (Safeguards Rule); (2) a supplemental notice and request for public comment on further amendments to the Safeguards Rule; and (3) a final rule to amend the Privacy of Consumer Financial Information Rule (Privacy Rule) under the Gramm-Leach-Bliley Act (collectively, GLBA Rules)

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NY Federal Court Grants Preliminary Approval of $38.5M TCPA Settlement

A New York federal judge recently granted preliminary approval for a $38.5 million class action settlement in Jenkins v. National Grid USA et al., 2:15-cv-01219 (E.D. N.Y. 2021), a case arising under the TCPA.  The defendants are several large-to-medium gas companies. 

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Federal Regulators Adopt New Computer-Security Incident Notification Requirements for Banks and Service Providers

In response to increasingly frequent and sophisticated cybersecurity attacks on banks and bank service providers, the federal prudential banking regulators—the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC)—have adopted a new rule that requires banks to report cyber incidents to their primary regulator.

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Colorado Privacy Act: New Protections for Consumers in the Centennial State

On July 1, 2023, the Colorado Privacy Act (CPA) will go into effect as the third state law generally governing consumer data privacy and was the second enacted in 2021.  If you do business with consumers in Colorado, regardless of your location, you should begin familiarizing yourself with the requirements of the CPA now.  While the CPA is similar to the California Privacy Rights Act (CRPA) and Virginia’s Consumer Data Privacy Act (VCDPA), certain elements distinguish the Colorado law from its counterparts.

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The FTC and CFPB Target Big Tech, While the Chamber of Commerce Pushes Back

The first full year of the Biden Administration has seen an overhaul of the leadership of executive agencies, coupled with an intense focus on how big business affects the United States economy. Nowhere are these changes more apparent than in the new leadership and enforcement initiatives of the Consumer Financial Protection Bureau (“CFPB”) and the Federal Trade Commission (“FTC”). After a lengthy confirmation process, former Federal Trade Commissioner Rohit Chopra, previously one of the staunchest consumer advocates at the Commission, took over as the new head of the CFPB in October 2021. 

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New Privacy Rules Could Derail User Data Collection by Companies

Both tech giants and governments have been debuting new rules that could throw off the flow of user data that is used by companies for targeting with online ads, The Wall Street Journal (WSJ) reported Thursday (Dec. 2).

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Joint Statement from FTC, DOJ Antitrust Division, and UK Competition and Markets Authority Leadership Following the G7 Competition Enforcers Summit

Leadership of the Federal Trade Commission and the Antitrust Division of the Department of Justice attended meetings in London this week as part of the Competition Enforcers Summit, which took place under the 2021 G7 Digital and Technology Track in connection with the UK’s G7 presidency. The U.S. agencies expressed their appreciation to the UK’s Competition and Markets Authority (CMA) for hosting them during this event, and for the opportunity to meet in person with the CMA to discuss cooperation between our respective jurisdictions. Following the meeting’s conclusion, the Federal Trade Commission, the Antitrust Division of the Department of Justice, and the Competition and Markets Authority, issue this joint statement:

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Senators urge Congressional leaders to include SAFE Banking Act in NDAA

U.S. Sen. Jacky Rosen (D-NV) is among a group of Senators urging members of the House and Senate Armed Services Committees to keep the Secure and Fair Enforcement (SAFE) Banking Act in the National Defense Authorization Act for Fiscal Year 2022 (NDAA).

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Solutions by Text Secures $35M Growth Investment Led by Edison Partners

DALLAS, TX and PRINCETON, NJ (November 30, 2021) — Solutions by Text, provider of the text messaging platform for consumer financial services institutions, today announced raising $35 million in growth financing. Edison Partners led the transaction with participation from Stifel Venture Bank, a Division of Stifel BankThe company is also announcing the appointment of payments industry leader David Baxter as Chief Executive Officer. Under Baxter’s leadership, the company will use investment proceeds to accelerate the adoption and extensibility of compliant text-based solutions across the consumer finance lifecycle.

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Thousands could soon lose – or sell – their homes as Covid mortgage bailouts expire

Hundreds of thousands of homeowners could soon lose or sell their homes as Covid-related mortgage bailout programs expire. There are not a lot of options for borrowers who lost too much income or their businesses during the pandemic, although they could take advantage of high equity in their homes and sell.

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Americans are ready to take on credit card debt again

After pulling back on borrowing during much of the pandemic, Americans are ready to pile on the debt as they edge closer to their pre-pandemic spending ways, according to recent figures.

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PCA inflexibility hampers CUs’ ability to improve financial well-being

CUNA sent a letter on Wednesday to the House Committee on Financial Services in response to the hearing entitled, “CARES Act Oversight of Treasury and the Federal Reserve: Building a Resilient Economy.” 

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Illinois Credit Union League Service Corporation (Envisant) Donates Additional $50,000 to the CU Awareness Program in Illinois

Illinois Credit Union League Service Corporation (recently rebranded to Envisant) in Naperville, IL pledged an additional $50,000 to the CU Awareness Program in Illinois, topping Envisant’s total support of the initiative at $600,000.

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Following sale close, Exeter expands origination program

Exeter Finance is closing the year with a pair of notable developments announced on Tuesday. The finance company that specializes in subprime paper said it will extend its underwriting reach into the near-prime credit spectrum, effective immediately. Focused on non-prime since its founding in 2006, Exeter launched a new near-prime program called ExeterPlus to dealers nationwide.

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Suncoast Credit Union Teams with MX to Provide Clearer Financial Insights and Enhanced User Experience to Its Members

TAMPA, Fla. and LEHI, Utah, Dec. 2, 2021 /PRNewswire/ -- MX, the financial data platform and leader in modern connectivity, today announced it is partnering with Suncoast Credit Union, Florida's largest credit union in both membership and assets. As a credit union, Suncoast is passionate about empowering its members to enjoy healthy financial lives grounded in education.

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Capital One becomes first big bank to ditch overdraft fees

Capital One plans to eliminate overdraft fees early next year, the company announced Wednesday, becoming the largest bank to get rid of the charges that cost Americans — especially financially vulnerable ones — billions of dollars every year.

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Encore Announces Findings of Economic Freedom Study

SAN DIEGO, Dec. 01, 2021 (GLOBE NEWSWIRE) -- Encore Capital Group, Inc. (Nasdaq: ECPG), an international specialty finance company, today announced the findings of its first Economic Freedom Study. The survey asked 2,600 people in Encore’s largest markets, the United States and United Kingdom, their feelings about personal finances and the economy, and explored the impact of the COVID-19 pandemic. With Encore’s mission of creating pathways to economic freedom as a backdrop, it also asked people what the term “economic freedom” means to them and how they can achieve it. The research was commissioned by Encore and conducted by Morning Consult.

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Debt collectors OK’d to use social media to reach borrowers

Debt collectors can now use social media to send direct messages to borrowers who owe, the Consumer Financial Protection Bureau has ruled. The agency says the updated rule, proposed last year and enacted this week, will clarify part of the Fair Debt Collection Practices Act, which governs the way agents may reach the indebted in order to collect.

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Give us feedback on the draft CFPB Strategic Plan for FY 2022 – 26

The CFPB is required to publish a new strategic plan that communicates the Bureau’s mission, strategic goals, and objectives for the next four years – and we are encouraged to provide an opportunity for the public to comment. We have posted our draft Strategic Plan for fiscal years 2022 to 2026, and we look forward to your feedback.

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Total CollectR brings artificial intelligence to Collections MAX

Lansing, Michigan - Total CollectR, a premier provider of virtual agent and debt negotiation solutions, has announced a partnership with Decca Software Company to fully integrate Total CollectR with the Collections MAX platform. Through this partnership, Collections MAX users will be able to harness the power of next-generation artificial intelligence, completely automating the entire debt collection recovery process.

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Elizabeth Warren ally Richard Cordray under discussion for Fed bank supervisor role, key senator says

The Democratic chairman of the Senate Banking Committee said Tuesday that he is talking with the White House about nominating Richard Cordray, who was the first director of the Consumer Financial Protection Bureau, to be the Federal Reserve’s top banking regulator.

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