At a glanceWednesday, April 13, 2022

Collection Industry News At A Glance - April 13, 2022
Wednesday April 13, 2022
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Connecticut federal court allows CFPB claims to proceed against mortgage company and principals for alleged licensing and other violations

A Connecticut federal district court has refused to dismiss claims filed by the CFPB against a mortgage company and three of its principals for alleged Truth in Lending Act (TILA), Mortgage Act and Practice (MAP) Rule, and Consumer Financial Protection Act (CFPA) violations.

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Mortgage Delinquencies Drop Again, Reach Another Historic Low in January, CoreLogic Reports

In January, 3.3% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 2.3 percentage point decrease compared to January 2021, when it was 5.6%. This again marks the lowest recorded overall delinquency rate in the U.S. since at least January 1999.

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FTC Chair Wants to Step up Privacy Protection With New Rules

Federal Trade Commission (FTC) Chair Lina Khan said on Monday (April 11) that it is time for the agency to “reassess” rules around what data companies can collect from consumers. She called for a new approach to consumer data protection to replace the companies’ privacy policies on collection and use of consumer data.

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Attorney General Tong Calls on CFPB to Prohibit Mortgage Servicers from Charging Convenience Fees

(Hartford, CT) – Attorney General William Tong today joined a coalition of 22 attorneys general urging the Consumer Financial Protection Bureau (CFPB) to prohibit mortgage servicers from charging convenience fees. According to the coalition, convenience fees charged by mortgage servicers are one of the more exploitative “pay to pay” fees consumers face.

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FHA Temporarily Shuts Down Loan Review System

The Federal Housing Administration (FHA) has shut down its digital Loan Review System (LRS) for up to two weeks in an effort to resolve “various document errors” that have occurred recently, the agency said Monday.

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Student loan payments won’t be due until September. Here’s what borrowers need to know

The U.S. Department of Education has extended the payment pause on federal student loans for the sixth time since the pandemic began more than two years ago.

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Consumers on course to save $1 billion in NSF fees annually, but some banks continue to charge these fees

In recent months, a number of large banks have announced that they are eliminating non-sufficient fund (NSF) fees on their checking accounts. This is a positive development. We estimate that these changes mean that consumers will pay about 50% less in these fees each year, an annual savings of about $1 billion.

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FCC Announces More State Robocall Investigation Partnerships

Federal Communications Commission (“FCC”) Chairwoman Jessica Rosenworcel announced on April 7, 2022, that “five more state Attorneys General are partnering with the FCC in robocall investigations.” As a result, a majority of states (some 27 plus the District of Columbia) have now signed Memoranda of Understanding (“MOU”) with the FCC’s Enforcement Bureau.

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Seventh Circuit Dismisses FDCPA Claim for Lack of Standing

In Pierre v. Midland Credit Management, Inc., — F.4th —, 2022 WL 986441 (7th Cir. Apr. 1, 2022), the Seventh Circuit affirmed the dismissal of a claim under the Fair Debt Collection Practices Act (“FDCPA”), finding that the plaintiff and the putative class which she represented suffered no concrete injury and therefore lacked Article III standing under the framework set out in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) and TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). Plaintiff Renetrice Pierre filed a class action lawsuit, seeking to represent a class of Illinois residents who had received letters from the defendant offering to resolve debts long after the statute of limitations on the debt had run. 

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70% of Complaints Filed With the CFPB Are About Credit or Consumer Reporting 

The Consumer Financial Protection Bureau (CFPB) published its semi-annual report on April 6, detailing everything what the agency has done for most of the last year. In a 100-page document, the agency explains its advocacy efforts to help consumers, the enforcement actions taken against companies and individuals, the data generated for different industries or the proposed rulemaking.

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How will the sharpest rise in mortgage rates in three decades affect home prices?

Mortgage rates are climbing fast. The average rate on a 30-year mortgage rose to 4.95 percent this past week, surging from just 3 percent in August 2021, according to Bankrate’s national survey of lenders.

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Biden administration will give millions of student loan borrowers in default a fresh start — here’s what you need to know

Along with the announcement last week that the ongoing payment pause on federal student loans would be extended for another four months, the Biden administration also offered good news to borrowers who were behind on their debt payments prior to the pandemic.

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CFPB Charges TransUnion and Senior Executive John Danaher with Violating Law Enforcement Order

Today, the Consumer Financial Protection Bureau (CFPB) is filing a lawsuit against TransUnion, two of its subsidiaries, and longtime executive John Danaher for violating a 2017 law enforcement order.

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Attorney General Bonta Urges CFPB to Prohibit Mortgage Servicers From Charging “Pay to Pay” Fees

OAKLAND – California Attorney General Rob Bonta today, as part of a multistate coalition, urged the Consumer Financial Protection Bureau (CFPB) to prohibit mortgage servicers from charging excessive payment fees. Currently, many mortgage servicers charge “pay to pay” fees for payments made online, by phone, or through a third-party service, with fee amounts often exceeding the actual cost to the servicer to process the payments. In today’s letter, the coalition argues that these fees are excessive and exploitative because homeowners are unable to choose their servicer and thus are a captive market.

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NCUA Releases OMWI Annual Report to Congress

ALEXANDRIA, Va. (April 11, 2022) – Today, the National Credit Union Administration released its Office of Minority and Women Inclusion (OMWI) annual report, which provides an overview of the NCUA’s diversity and inclusion programs and initiatives in 2021. The report also highlights the agency’s efforts to ensure fair and inclusive business practices as well as assess the diversity policies and practices of the entities it regulates.

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Recent Report Acuses Aidvantage of Misleading Student Loan Borrowers: What to Know

Maximus, which manages federal student loans under the name Aidvantage, has been accused of mismanaging some borrowers' student loan accounts. A March 2022 report from the Student Borrower Protection Center and the Communications Workers of America accuses the loan servicer of engaging in "unfair debt practices."

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Colorado Attorney General Seeks Rulemaking Comments for the Colorado Privacy Act

With the Notice of Proposed Rulemaking set for fall 2022, Colorado’s Attorney General office is currently inviting preliminary comments for the Colorado Privacy Act. Specifically, the office is interested in comments related to dark patterns, data brokers, and opt-out mechanisms. For those interested in submitting comments, the comment form is here.

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FCC Confirms Price Changes for Reassigned Numbers Database; Clarifies Safe Harbor

The Federal Communications Commission issued a news release Friday announcing that it is improving its Reassigned Numbers Database (RND) by making it more “affordable and valuable for callers as a resource to reduce the number of unwanted phone calls Americans receive.”

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U.S. consumers up view of inflation, spending in coming year, NY Fed survey finds

(Reuters) - U.S. consumers boosted their expectations for inflation and household spending in the year ahead as the price of gas and food steepens, but tempered their view of inflation over the medium-term, according to a survey released on Monday by the New York Federal Reserve.

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Know your rights and protections when it comes to medical bills and collections

Medical billing and collections can hurt people when they are already struggling with a health crisis. If this sounds like you or a loved one, help is available. We are on your side to make sure you are treated fairly. Here are some steps you can take.

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US consumer debt jumped by $40 billion in February

New York (CNN Business)Americans got into a lot more debt in February as rampant inflation kept up the pressure, the Federal Reserve's consumer credit report showed Thursday.Debt levels jumped by nearly $42 billion to a total of almost $4.5 trillion. That's an annual increase of 11.3%, seasonally adjusted, far outperforming economists' expectations and setting a new high. In January, total credit had grown only 2.4%.

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Average mortgage debt

Many Americans begin taking on debt in early adulthood, and for those who become homeowners, this eventually includes mortgage debt. When evaluating a borrower for a home loan, mortgage lenders look at the borrower’s debt-to-income (DTI) ratio, the percentage of gross monthly income that goes toward paying debt. This is an indicator of how much additional debt a borrower can reasonably take on before it becomes unaffordable. Too much debt, and the borrower might not be able to get approved for a mortgage. For borrowers with too much mortgage, a higher DTI ratio could make it harder to obtain other forms of credit, like a car loan or personal loan, in the future.

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How the latest student loan pause could help borrowers — even without forgiveness

All student loan borrowers currently in default will be given a fresh start once the federal moratorium on student loan payments expires — a move experts say could help millions unburden themselves from crippling debt.  

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U.S. FDIC asks banks for info on crypto activities, cites potential ‘systemic risks’

WASHINGTON, April 7 (Reuters) - The U.S. Federal Deposit Insurance Corporation (FDIC) on Thursday said the thousands of banks it supervises should notify the regulator of any crypto-related activities they have or are planning.

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New Data Show CUs Need Much More Than Good Service to Retain Members

Credit unions (CUs) are the underdog in the constant competitive battle among financial institutions (FIs). Established banks can harness far more resources, and digital-native FinTechs have a head start with innovative digital solutions that customers crave. CUs’ traditional advantage over their counterparts — member loyalty — can quickly be whittled away if they do not step up their digital service offerings.

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Subject: Compliance with 23 N.Y.C.R.R. § 1.3(b) and the new Consumer Credit Fairness Act

The Department is issuing this guidance to address potential confusion about how to comply with notice requirements of 23 N.Y.C.R.R. § 1.3(b) in light of a recent amendment to the New York Civil Practice Law and Rules (“CPLR”) taking effect April 7, 2022. That amendment, set forth in § 4 of the Consumer Credit Fairness Act (“CCFA”) (L.2021, c. 593), adds a new section 214-i to the CPLR that provides, in relevant part, as to the statute of limitations applicable to actions arising out of consumer credit transactions, “Notwithstanding any other provision of law, when the applicable limitations period expires, any subsequent payment toward, written or oral affirmation of or other activity on the debt does not revive or extend the limitation period.” 23 N.Y.C.R.R. § 1.3(b) of the Department’s regulation governing debt collectors requires that, “[i]f a debt collector knows or has reason to know that the statute of limitations for a debt may be expired, before accepting payment on the debt, the debt collector must provide the consumer with clear and conspicuous notice, in the same medium (such as via telephone or electronic communication) by which the debt collector will accept payment, that,” among other things, “if the consumer makes any payment on a debt for which the statute of limitations has expired or admits, affirms, acknowledges, or promises to pay such debt, the statute of limitations may restart.”

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Attorney General Bonta Announces Partnership with FCC on Robocall Investigations

OAKLAND — California Attorney General Rob Bonta and the Federal Communications Commission (FCC) today announced a new partnership on robocall investigations. This Memorandum of Understanding (MOU) between California and federal robocall investigators establishes critical information sharing and cooperation structures to investigate spoofing and robocalls scam campaigns. California joins more than twenty states in establishing a formal working relationship with the FCC’s Enforcement Bureau to support robocall investigations and protect American consumers and businesses. 

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Rising mortgage rates are causing more home sellers to lower their asking prices

Several new reports from real estate companies suggest buyers may be starting to get a break in this red-hot housing market. More listings are coming up for sale, and some sellers are lowering their asking prices.

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Americans ramp up credit-card debt as inflation spikes to 40-year high

More Americans are relying on their credit cards to keep bills paid as inflation has skyrocketed to a 40-year high.

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Climate risk should be considered in housing decisions

Flooding, fire, drought, and other weather-related risks have always been a danger to property and consumer wellbeing. However, with the changing climate, these risks are increasing in intensity and frequency, impacting the probability of damage, cost of utilities, price of insurance, and potential resale value of homes.

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EXCLUSIVE U.S. consumer watchdog to ramp up credit card enforcement, may review fee caps

WASHINGTON/NEW YORK, April 7 (Reuters) - The U.S. consumer watchdog plans to ramp up enforcement actions against lenders that illegally charge credit card late-payment fees and may rewrite its rules that set thresholds for such fees, according to two people with direct knowledge of the matter.

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Student loan companies ‘abusing the bankruptcy system’ will face consequences: CFPB letter

Student loan companies will face consequences if they mislead borrowers and collect on private debt that has been discharged by a bankruptcy court, according to a letter sent by the country’s top consumer watchdog to Senator Dick Durbin (D-IL) that was obtained by Yahoo Finance.

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Consumer debt soars to highest level in over a decade

Americans racked up the most monthly consumer debt in over a decade in February, amid a surge of credit card swiping.

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FTC Win at Trial Against On Point Global Makes $102 Million in Refunds Available for Consumers Harmed by Fake Government Website Scams

The Federal Trade Commission’s trial win against On Point Global has made $102 million in refunds available to consumers who were harmed by a wide-ranging scheme that led them to pay money or hand over personal information to fake government websites. Consumers who were harmed must apply for redress payments by July 5, 2022.Consumers who were deceived by a wide-ranging scheme into handing over money or personal information in exchange for bogus advice on how to apply for government benefits can apply for redress payments as a result of a Federal Trade Commission lawsuit, but must do so by July 5, 2022.

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21 Attorneys General Urged CFPB to Regulate BNPL

On March 25, the Consumer Financial Protection Bureau (CFPB) closed its request for comments regarding the inquiry on buy now, pay later (BNPL) that it launched in December. PYMNTS assessed the 44 public comments available on the government website, and the vast majority of them urged the CFPB to increase transparency and information disclosure requirements from BNPL firms.

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Genisys Credit Union is named Outstanding Credit Union of the Year

AUBURN HILLS — Genisys Credit Union is excited to announce that they are the recipient of the 2022 Outstanding Credit Union of the Year, Large Asset Size, Award by the Michigan Credit Union League (MCUL). The award recognizes a credit union for outstanding contributions towards member services and community engagement.

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U.S. consumer watchdog to ramp up credit card enforcement, may review fee caps

WASHINGTON/NEW YORK (Reuters) -The U.S. consumer watchdog plans to ramp up enforcement actions against lenders that illegally charge credit card late-payment fees and may rewrite its rules that set thresholds for such fees, according to two people with direct knowledge of the matter.

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Many payday lenders steer borrowers to higher-cost repayment options, consumer watchdog says

Many payday loan borrowers aren’t using the lowest-cost repayment option in states where it’s available, which perpetuates a cycle of high fees and debt, the Consumer Financial Protection Bureau said Wednesday in a report.

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Prohibition on Inclusion of Adverse Information in Consumer Reporting in Cases of Human Trafficking (Regulation V)

The Consumer Financial Protection Bureau (Bureau) seeks comment on proposed amendments to Regulation V, which implements the Fair Credit Reporting Act (FCRA), to assist consumers who are victims of trafficking. The proposed rule, which would implement a recent amendment to the FCRA, would establish a method for a victim of trafficking to submit documentation to consumer reporting agencies, including information identifying any adverse item of information about the consumer that resulted from certain types of human trafficking, and prohibit the consumer reporting agencies from furnishing a consumer report containing the adverse item(s) of information.

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CFPB Seeks to Halt Negative Credit Reporting for Survivors of Human Trafficking

Today, the Consumer Financial Protection Bureau (CFPB) is using its rulemaking authority to propose that consumer reporting agencies (CRAs) do not prevent survivors of human trafficking from achieving financial independence. The proposed rule would protect survivors of human trafficking by preventing CRAs from including negative information resulting from abuse. Congress required the CFPB to issue rules as part of the recently-enacted Debt Bondage Repair Act.

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Federal Trade Commission Finalizes Order Against Dun & Bradstreet for Deceiving Businesses and Failing to Update Errors on Business Credit Reports

The Federal Trade Commission has finalized an order against Dun & Bradstreet, a provider of business credit report services, for deceiving businesses about the value of products they offered and for failing to correct errors on businesses’ credit reports.

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Semi-Annual Report of the
Consumer Financial
Protection Bureau

The Bureau of Consumer Financial Protection is pleased to present our Semi-Annual Report to Congress for the period beginning April 1, 2021 and ending September 30, 2021.

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Director Chopra’s Opening Remarks to the Consumer Advisory Board

Good afternoon. In modern consumer financial markets, financial institutions rely on more and more data every day. Today, I want to specifically focus on the issues associated with the furnishing of allegedly unpaid medical bills on consumer credit reports. I also want to share some of the CFPB’s early thinking on the recent announcement by Equifax, Experian, and TransUnion, regarding their reporting of medical bills.

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CFPB Adds “Discrimination” to its “Unfair, Deceptive, or Abusive Acts and Practices” (UDAAP) Examination Guidance

On March 16, 2022, the Consumer Financial Protection Bureau (CFPB) announced its intent to address discrimination as an “unfair practice” under the Consumer Financial Protection Act (commonly known as Dodd-Frank). Specifically, by indicating that discrimination falls within “unfair practices” in its Exam Manual, the CFPB has authorized its examiners to look “beyond discrimination directly connected to fair lending laws” and ask companies to “review any policies or practices that exclude individuals from products and services, or offer products or services with different terms, in an unfairly discriminatory manner.”[1]

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