CFPB Highlights FDCPA in Report to Congress

The Consumer Financial Protection Bureau has released its annual report on the Fair Debt Collection Practices Act to Congress highlighting the role of the debt collection industry in the economy, supervision and complaint trends, among other topics.

Utah Consumer Privacy Act: New legislation adds another wrinkle to the US legal landscape.

The past year has brought with it many notable developments in consumer privacy that have significantly affected businesses that collect and use personal data as part of their operations, including the enactment of two new consumer privacy statutes by Virginia and Colorado.

Kentucky enacts licensing requirement for servicers of private and federal student loans

Kentucky recently enacted HB 494, titled the “Student Education Loan Servicing, Licensing, and Protection Act of 2022,” which will require student loan servicers to be licensed in Kentucky.  The Act applies to servicers of private student loans and federal student loans.

FTC Chair Announces New Privacy Approach

In a series of recent statements and releases, Lina Khan, the Chair of the FTC, made clear the Commission’s intention to revamp its oversight of consumer data privacy and establish more substantive limits on commercial data collection and processing activities.

California Supreme Court Ends Bail Company’s Bid to Continue Violating Consumer Protection Laws, Halting Debt Collection of $38M from California Families 

ALAMEDA —  Last week, the California Supreme Court declined to review the California Court of Appeal’s decision holding that bail bonds companies cannot operate their businesses in violation of consumer protection laws — which protects Californians from unscrupulous business practices. The Court of Appeal’s decision affirmed a preliminary injunction from Alameda County Superior Court that halted Bad Boys Bail Bonds’ debt collection efforts on $38 million in consumer credit contracts signed by the loved ones of arrestees who did not have the money to post bail. 

Complaint Bulletin: Medical billing and collection issues described in consumer complaints

The CFPB’s Office of Consumer Response hears directly from consumers about the challenges they face in the marketplace, brings their concerns to the attention of companies, and assists in addressing their complaints.

CFPB Report Spotlights Medical Billing Challenges

Washington, D.C. – A report issued today by the Consumer Financial Protection Bureau (CFPB) examines the financial consequences of medical billing and collections endured by individuals and families across the country. The report draws from the rising volume of medical billing and collection complaints submitted to the CFPB. The CFPB is using today’s research to strengthen its across government and industry efforts to support patients and families suffering the consequences of medical billing and collections.

Biden administration to erase student debt of more than 40,000 borrowers

The Biden administration continued its student loan cancellation effort on Tuesday by announcing that 40,000 borrowers would see their student loans become eligible for discharge under the Public Service Loan Forgiveness program and 3.6 million more will move closer towards forgiveness.

CFPB flexes its market monitoring authority in unprecedented ways

April 19, 2022 - Last fall, the Consumer Financial Protection Bureau made headlines for its orders to six "Big Tech" companies to produce information about their business models and practices for their consumer payments systems. That was followed up less than two months later by the issuance of similar orders to five "Buy Now Pay Later," or BNPL, companies.

CFPB Releases Report on Financial Challenges Facing Rural Communities

Today the Consumer Financial Protection Bureau (CFPB) issued a report on the challenges faced by Americans in rural communities. The report highlights that many of these communities lack access to physical bank branches, are more likely to seek credit from nonbanks, and are heavily affected by medical bills. The CFPB will be expanding its efforts to address these and other challenges facing the people and families of rural America.

Department of Education Announces Actions to Fix Longstanding Failures in the Student Loan Programs

Today, the Department of Education announced steps that will bring borrowers closer to public service loan and income-driven repayment (IDR) forgiveness by addressing historical failures in the administration of the federal student loan programs. Federal Student Aid (FSA) estimates that these changes will result in immediate debt cancellation for at least 40,000 borrowers under the Public Service Loan Forgiveness (PSLF) Program. Several thousand borrowers with older loans will also receive forgiveness through IDR. More than 3.6 million borrowers will also receive at least three years of additional credit toward IDR forgiveness.

CFPB Sends Signal to Student Loan Servicers Through UDAAP Consent Order

The Consumer Financial Protection Bureau’s (CFPB) focus on ensuring loan servicers’ compliance with the implementation of the Public Service Loan Forgiveness (PSLF) program continues. On March 30, 2022, the CFPB entered into a Consent Order with student loan servicer EdFinancial Services, LLC, to settle the CFPB’s allegations that EdFinancial committed deceptive servicing acts and practices related to PSLF. The Consent Order sends another signal to student loan servicers that the CFPB intends to ramp up its oversight of student loan servicer practices, particularly related to misrepresentations to borrowers.  

5-year fixed personal loan rates dip again

Borrowers with good credit seeking personal loans during the past seven days prequalified for rates that were slightly higher for 3-year and lower for 5-year fixed rates compared to the previous seven days.

Report: U.S. consumer debt jumped more than $1 trillion in 2021

WASHINGTON, D.C. — Consumer debt jumped more than $1 trillion from the beginning to the end of 2021, according to a report from the Consumer Financial Protection Bureau (CFPB). “Over the course of 2021, consumer debt rose rapidly, from $14.33 trillion in the first quarter to a new high of $15.58 trillion in the last quarter of 2021,” the report said. The report said the spike was in large part because of an increase in credit card and auto loan debt.

FTC Chair Speaks at IAPP Global Privacy Summit

On April 11, 2022, Federal Trade Commission Chair Lina Khan spoke at the opening of the International Association of Privacy Professionals’ Global Privacy Summit. This speech marks Khan’s first major privacy address since her appointment last June.

BofA Digital Biz Hits 53% as Customers Use Zelle More Than Checks

Before too long, we might be calling Bank of America a digital bank. The company’s latest earnings results, and commentary from its conference call with analysts, show that more than 50% of consumer sales — 53% to be exact — came from digital channels, at $1.7 billion, where that measure had been $921 million before the pandemic. That’s up from 49% a year ago.

Emerging Fair Lending Risk: Student Lending

In line with policy directives from the Biden administration, federal regulators have made it clear that fair and responsible lending is an enforcement priority—and that the directive extends to lenders making student loans (also referenced as education loans). 

CFPB Deputy Director Martinez invites discussion of payday payment plans and credit reporting of medical debts

Last week, CFPB Deputy Director Zixta Martinez provided the opening remarks at the CFPB’s Academic Research Council meeting. In her remarks, Martinez emphasized the CFPB’s role as a data-driven agency and welcomed further discussion of state payday extended payment plans and of the inclusion of medical debt in credit reports—two topics that have garnered renewed public interest due to the COVID-19 pandemic.

Transcript Withholding Holds Back Workers and Wages

Recently, U.S. Department of Education Secretary Cardona issued an important call to end the practice of transcript withholding. The CFPB is also examining the practice of transcript withholding as a debt collection practice.

RMAI Introduces Understanding the Receivables Management Industry: A Guide to Key Concepts, Terms and Acronyms

April 18, 2022 (Sacramento, CA) – RMAI is pleased to announce the release of a new educational resource, Understanding the Receivables Management Industry: A Guide to Key Concepts, Terms and Acronyms. This downloadable guide is designed for industry employees, as well as any others who want to learn about the receivables management industry.  April is Financial Literacy Month, and this guide provides another resource to contribute to a better understanding of the financial landscape.

AG Nessel Takes Action to Eliminate Overdraft Fees, Convenience Fees from Mortgage Servicers

LANSING - Michigan Attorney General Dana Nessel joined two multistate actions this month aimed at eliminating unnecessary fees that negatively affect consumers.  "We know the costs of goods and services are at an all-time high," Nessel said. "That's why it's more important than ever to fight against companies that charge fees that ultimately do more to hurt the customer than offset their own operating costs." 

8th Circuit: Text Marketing System is Not an ATDS Under the TCPA

On March 24, 2022, the U.S. Circuit Court of Appeals for the Eighth Circuit issued an opinion considering whether an automated promotional text marketing system that sent messages to randomly selected phone numbers that were manually entered qualified as an automatic telephone dialing system (ATDS) under the TCPA.  The Eighth Circuit concluded that because the automated marketing system did not “produce” telephone numbers to be called it did not qualify as an ATDS.

CFPB Releases Blog Post on the Dischargeability of Private Student Loans in Bankruptcy

On April 12, the Consumer Financial Protection Bureau (CFPB) released a blog post titled “Busting myths about bankruptcy and private student loans.” In the blog post, the CFPB argues that certain private education loans can be discharged in bankruptcy. Specifically, the CFPB argues that the following private student loans can be discharged without a showing of undue hardship and an adversary proceeding:

Lockport business drops challenge to seizure of nearly $400,000 by feds

A Lockport company has ended its court battle to recover $392,495 that was seized almost two years ago by federal agents investigating alleged fraud and money laundering by local debt collection firms.

FTC Refunded $4.86 Million to Victims of Abusive Debt Collectors in 2021

The Federal Trade Commission has provided the Consumer Financial Protection Bureau (CFPB) with its annual summary of activities to protect consumers from abusive and predatory debt collectors. The CFPB requested the summary for its annual report to Congress on the activities of both agencies annual report to Congress on the activities of both agencies, who share law enforcement responsibility in this area, to put a stop to unlawful debt collection that harms consumers.

Justice Department Files Suit Against Virginia Towing Company for Unlawfully Auctioning Off Servicemembers’ Vehicles

The Justice Department today filed a lawsuit in the U.S. District Court for the Eastern District of Virginia alleging that Steve’s Towing Inc. in Virginia Beach, Virginia, violated the Servicemembers Civil Relief Act (SCRA) by failing to obtain court orders before auctioning off vehicles belonging to at least seven SCRA-protected servicemembers, including two vehicles belonging to a member of a Navy Seal team who was deployed overseas. The SCRA, which provides a variety of financial and housing protections to members of the military, prohibits towing companies from auctioning off servicemembers’ vehicles without a court order.    

Credit unions seek injunction blocking enforcement of NY law reducing debt judgment interest rate

Three credit unions have filed a federal class action lawsuit in the Southern District of New York seeking to halt the enforcement or implementation of New York’s recently passed S.B. 5724A which would retroactively and prospectively lower the statutory annual interest rate on  consumer debt judgments from 9% to 2%.  The credit unions allege that the change in rates – set to take effect April 30, 2022 – violates the United States Constitution’s due process and property protections and should be struck down in its entirety.

Some medical debt will continue to haunt consumers despite moves by White House and credit bureaus

In addition to the March announcement by the three big credit-reporting firms that they will limit when such debt ends up on credit reports, the White House on Monday outlined steps intended to further prevent past medical bills from haunting consumers.

Cybersecurity Class Actions Drawing a Split Among Circuit Courts

Takeaway: In the wake of a data breach, a class of Plaintiffs whose personal and/or financial information is disseminated to third parties all share the same concern – the risk of future harm. But in order for these Plaintiffs to have standing to sue over the wrongful dissemination of their information resulting from the breach, the mere threat of future harm may not be enough.

Fair Debt Collection Practices Act Annual Report 2022

The Bureau’s annual report to Congress summarizes the Bureau’s activities to administer the Fair Debt Collection Practices Act (FDCPA) in 2021 as the primary federal regulator of the consumer debt collection industry. This report also includes activities conducted by the Federal Trade Commission (FTC) in 2021 in relation to debt collection.

Protecting families and honest businesses from debt collection abuses

Financial companies that collect and process loan payments play a critical role in consumer finance markets. The Consumer Financial Protection Bureau (CFPB) is the primary federal regulator of the consumer debt collection industry, and today, we submitted our annual report to Congress on the Fair Debt Collection Practices Act (FDCPA).

24% of Credit Union Members Would Switch FIs for Digital Innovations

When consumers are picking a financial institution, digital features make a difference. In fact, 24% of credit union members would consider switching to new financial institutions over innovation, according to “Credit Union Innovation,” a PYMNTS and PSCU collaboration based on a survey of 4,832 U.S. consumers, 101 credit union decision-makers and 51 FinTech executives.

Federal Trade Commission Takes Action Against For-Profit Medical School for Using Deceptive Marketing to Lure Students

The Federal Trade Commission has taken action against a for-profit medical school in the Caribbean and its Illinois-based operators, alleging they deceptively marketed the school’s medical license exam test pass rate and residency matches to lure prospective students. The school and its operators are also charged with violating the Holder Rule, which preserves rights for injured consumers, and the Credit Practices Rule, which protects consumers in credit contracts.

Virginia Governor Signs VCDPA Amendment Bills into Law

On April 11, 2022, Virginia Governor Glenn Youngkin signed three Virginia Consumer Data Protection Act (VCDPA) amendment bills into law. The three bills will go into effect July 1, 2022. With the signing of the bills, the VCDPA’s text is now finalized in advance of its January 1, 2023 effective date.

Nevada Hospital Association Files Amicus Brief in Support of 9th Circuit Appeal

The Nevada Hospital Association has filed an amicus brief in support of the 9th Circuit appeal taken by the Nevada Collectors Association and other stakeholders (plaintiff-appellants) arguing that the U.S. District Court for the District of Nevada erred in denying the plaintiff-appellants’ motion to enjoin the effect of Nevada S.B. 248, the state’s medical debt law that took effect in July 2021.

TransUnion Responds to Litigation Filed by CFPB

In response to a complaint filed today by the Consumer Financial Protection Bureau, TransUnion issued the following statement: The claims made by the CFPB against TransUnion and John Danaher, a former executive, are meritless and in no way reflect the consumer-first approach we take to managing all our businesses. 

The student loan pause was extended—three things to keep in mind

Earlier this month, the Department of Education announced that federally-held student loan payments will continue to be paused through August 31, 2022. This extension provides welcome relief to student loan borrowers who are still finding their footing in an economy recovering from the pandemic. As we look toward repayment, here is what the CFPB’s research, supervision, and enforcement work tells us about the risks student loan borrowers might face.

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