At a glanceFriday, June 10, 2022

Collection Industry News At A Glance - June 10, 2022
Friday June 10, 2022
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CFPB Reminds State Regulators Of Enforcement Powers

The Consumer Financial Protection Bureau (CFPB) recently announced and issued a new Interpretive Rule that delineates states’ authority to enforce federal consumer financial protection laws. Citing the crucial role states play in protecting consumers, the CFPB made it plain that state attorneys general play an integral role in oversight and enforcement of the Consumer Financial Protection Act (the Act).

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Credit card balances spike to $841 billion after stimulus checks helped reduce debt

For many Americans, the pandemic-induced slowdown offered a rare opportunity to better their financial standing. Government stimulus checks and fewer opportunities for spending drove the personal savings rate to a level not seen since World War II, with many consumers using the extra cash to pay down debt — primarily their credit card balances, which have the highest interest rates, averaging more than 16%. 

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Education Department Not Ready For Student Loan Forgiveness, Says Top Lawmaker

The U.S. Department of Education is not ready for student loan forgiveness — a top lawmaker says — and the results could be a disaster for student loan borrowers.

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Credit Card Debt on the Rise as Americans Continue Spending Despite Rising Inflation

Consumer credit card debt rose once again in April 2022, according to the latest Consumer Credit Report released by the U.S. Federal Reserve. Revolving credit card debt rose from $1,023.6 billion in March 2022 to $1,040.7 billion in April. It has been steadily increasing since the first quarter of 2021, when it had dropped to $911.1 billion, the report showed.

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CPPA Holds First Public Meeting Following Publication of First Draft of Proposed Regulations and Initial Statement of Reasons

The California Privacy Protection Agency (“CPPA” or “Agency”) hosted its first public meeting yesterday following publication of the first draft of proposed regulations (“Regs”) (on May 27) and the initial statement of reasons (“ISOR”) on June 3.

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Maryland Regulator Puts Lenders and Servicers on Notice Regarding the Assessment of So-Called “Convenience Fees”

On May 12, 2022, the Maryland Office of the Commissioner of Financial Regulation (the “OCFR”) issued an Industry Advisory (the “Advisory”) “put[ting] [the] industry on notice” of the recent decision issued by the 4th Circuit Court of Appeals in Ashly Alexander, et. al. v. Carrington Mortgage Services, LLC

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Rules on mortgage servicing

On June 9, 2022, the Bureau provided flyers on the Homeowner Assistance Fund (HAF) programs that mortgage servicers may voluntarily provide to their borrowers. The flyers are provided in English as well as six other languages.

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Some medical debt will soon disappear from consumer credit reports. What to know

Changes to when such debt will go on credit reports are scheduled to take effect July 1, as announced by the three large credit reporting firms — Equifax, Experian and TransUnion — in March. The upshot should be improved credit scores among the consumers who are affected by the revised reporting policies.

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CFPB Seeks Ban Against Operator of Student Loan Debt Relief Scam Reboot

Washington, D.C. – Today the Consumer Financial Protection Bureau (CFPB) took action against the owner of a student-loan debt relief company for allegedly withdrawing hundreds of thousands of dollars from student borrowers’ bank accounts, without authorization. The CFPB alleges that Frank Gebase, Jr. controlled a company that took the borrowers’ money after obtaining their names and account information from a previous student-loan debt-relief scammer that the CFPB shut down. The CFPB’s proposed settlement, if entered by the court, would ban Gebase from the debt-relief industry and order him to pay a penalty.

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CFPB Launches Inquiry into Practices that Leave Workers Indebted to Employers

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) has launched an inquiry into practices and financial products that may leave employees indebted to their employers. In today’s Request for Information, the CFPB seeks data about, and worker experiences with, these emerging practices and financial products referred to as employer-driven debt. 

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OCC wants to start collecting cannabis, crypto business data from banks

The Office of the Comptroller of the Currency (OCC) is proposing adding cannabis and digital currency activities to the list of business data it collects from banks in an attempt to better identify areas of risk in the financial system, according to a notice the agency posted in the Federal Register on Wednesday.

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CFPB Announces New Office of Competition and Innovation

On May 24, 2022, the Consumer Financial Protection Bureau (CFPB) ) announced it opened a new office, the Office of Competition and Innovation, as part of a new approach to help spur innovation in financial services by promoting competition and identifying stumbling blocks for new market entrants

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PayPal Launches Crypto Payment, Transfer Function For US Users

PayPal has recently announced that it will now be supporting the native transfer of Bitcoin, Ethereum, Bitcoin Cash, and Litecoin to and from accounts on their platform.

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City of Boston Credit Union Earns Three MAC Awards

City of Boston Credit Union, one of the oldest Credit Unions in the United States, announced its marketing team was selected for two gold and one silver award by the Marketing Association of Credit Unions (MAC). 

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NCUA sets June 22 webinar on challenges facing small credit unions

Nearly two-thirds of all federally insured credit unions have less than $100 million in assets, and they face an array of challenges in a rapidly changing financial services market. Staff from NCUA will discuss strategies for addressing these issues at a June 22 webinar, “Small Credit Union Challenges.”

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OnDeck Announces Data Breach Impacting Social Security Numbers and Financial Account Information

Recently, the business lending company OnDeck announced that the company experienced a data breach after an unauthorized party gained access to the company’s computer network and transferred sensitive consumer data to a private cloud storage account. According to OnDeck, the breach resulted in the following data being compromised: names, Social Security numbers, tax ID numbers, driver’s license numbers, passport numbers, financial account/payment card account numbers,

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New Manhattan Beach Kinecta Federal Credit Union flagship evokes past and future

The word Kinecta appeared on Redondo Police chief Keith Kauffman’s skate helmet at the 2017 King Harbor Skateboard Championships. It appears regularly on pop-ups at South Bay Boardrider and Jimmy Miller Foundation surf contests. It appears on team T-shirts at the Skechers Friendship Walk and the Tour de Pier. It’s on checks totalling nearly $1 million annually to nonprofits, such as the Richstone Family Center and Beach City education foundations. Most famously, Kinecta is on the ice cream truck that gives out ice cream bars at just about every community event in the South Bay.

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Bankruptcy Legislation Update: House Passes Bill Preserving $7.5 Million Eligibility Threshold for Subchapter V; Legislation Ready for Biden’s Signature

The House has passed a bill that will now go to the President to sign into law that raises the eligible debt ceiling for Subchapter V of Chapter 11 to $7,500,000. Small businesses with up to $7,500,000 in noncontingent, liquidated debts will once again be eligible for relief under Subchapter V for another two years. The ceiling was previously raised to $7,500,000 as part of the CARES Act in 2020, but lapsed back to $3,024,725 as of April 1, 2022.

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PYMNTS Intelligence: The Challenges of Complying With Digital Identity Regulations

Technologies designed to authenticate identities are being introduced around the world to replace cumbersome procedures involving usernames, passwords and paper-based identification documents. Biometrics, such as facial recognition, fingerprint and iris scans, and voice recognition technologies, are increasingly being used in everything from accessing devices and financial accounts to airport check-in and security processes.

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Majority of Americans Optimistic About Their Financial Future Despite Challenges Brought on by Inflation and Fears of a Recession

More than half of Americans (55%) remain optimistic about their financial future even as inflation and fears of a recession weigh on their finances. The newly released TransUnion (NYSE: TRU) Consumer Pulse study from Q2 2022 found that optimism levels dropped from 59% the previous quarter and 64% at the end of 2021 largely due to an array of challenges.

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CFPB Issues Order to Terminate Upstart No-Action Letter

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) issued an order to terminate Upstart Network from its list of approved “no-action letters.” The CFPB had granted special regulatory treatment to Upstart by immunizing the lender from being charged with fair lending law violations with respect to its underwriting algorithm, while the “no-action letter” remained in force. Upstart requested an amendment to the “no-action letter” that would effectively seek an immediate termination.

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Federal Trade Commission Returns More Than $164,000 To Consumers Harmed by Bogus Mortgage Relief Scam

The Federal Trade Commission is sending 2,155 checks totaling more than $164,000 to consumers who were harmed by a bogus mortgage relief scam that operated under the names Brookstone Law and Advantis Law.

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California Regulator Seeks Comment on Reworking Consumer Complaint Rules

On May 20, the California DFPI released a Notice of Proposed Rulemaking seeking comment on implementing new rules to the California Consumer Financial Protection Law (CCFPL).

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Proposed Rule on Supervisory Authority Over Certain Nonbank Covered Persons Based on Risk Determination; Public Release of Decisions and Orders, Docket No. CFPB-2022-0024

The American Financial Services Association (AFSA)1 appreciates the opportunity to comment on the procedural rule to establish supervisory authority based on a risk determination (the “Rule”).2 Specifically, the Rule implements § 1024(a)(1)(C) of Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which gives the Consumer Financial Protection Bureau (the “Bureau” or “CFPB”) the authority to supervise a nonbank covered person when the CFPB determines that such person is engaging in conduct that poses risks to consumers.

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California Privacy Protection Agency Releases Draft CPRA Regulations

On May 27, 2022, the California Privacy Protection Agency (CPPA) released draft regulations for the California Privacy Rights Act (CPRA) (Draft Regulations). The Draft Regulations come roughly two months before the agency is required to adopt final regulations for the law (by July 31, 2022) and almost seven months before the CPRA is set to go into effect on January 1, 2023.

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Merger Danger: New TCPA Decision Explores Successor Liability In the Wild West of TCPAWorld

The laws around corporate structure in TCPAWorld are a bit of a mess. In the first place, personal liability is available in most instances–even where a corporate officer director or employee is taking steps on behalf of their employer. Not good.

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Congress should reject any expansion of CU-DoD land lease arrangement

The House Armed Services Committee should reject any bank attempts to share the land lease arrangement between the Department of Defense and credit unions, CUNA and other organizations wrote Tuesday. House Armed Services subcommittees are beginning markups of the FY23 National Defense Authorization Act (NDAA) this week.

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Bank of America Credit and Debit Card Data Shows Continued Growth in Consumer Spending, up 9% year-over-year in May

NEW YORK, June 6, 2022 /PRNewswire/ -- The Bank of America Institute today released its findings from the latest Consumer Checkpoint, which aims to provide a holistic and real-time estimate of U.S. consumers' spending and their financial well-being, leveraging the breadth and depth of Bank of America proprietary data from its 67 million consumer and small business clients.

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A top student-loan official says growing student debt loads for parents is ‘something we’re watching very carefully’ — but they may not be eligible for Biden’s impending forgiveness plan

A type of federal student-loan with the highest interest rate is very easy to acquire, but for many, quite difficult to pay off. A top education official for President Joe Biden says the issue is on his radar. "That's definitely something we're watching," Under Secretary of Education James Kvaal said during a virtual discussion on student debt on Monday, referring to growing debt loads from PLUS loans parents and graduates take out.

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Governor Mills Announces $4 Million Maine Jobs & Recovery Plan Initiatives to Offer Student Loan Repayment Assistance & Bolster Scholarships for Health Care Careers

Coopers Mills, MAINE – Governor Janet Mills today announced two initiatives from her Maine Jobs & Recovery Plan to attract and retain health care professionals in Maine. The first initiative, offered through the Finance Authority of Maine (FAME), provides student loan repayment assistance to health care professionals in medicine, dentistry, behavioral health, and nursing education. Under the initiative’s programs, health care professionals can apply for up to $75,000 in relief for qualifying student loan debt while nursing educators can receive up to $40,000.

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Connecticut Stops FinTech from Unlicensed Lending Activities

On May 4, the Connecticut Department of Banking issued a temporary cease and desist order directing a peer-to-peer lending platform that connected borrowers with third-party lenders to cease its lending-related activities on grounds that it was operating as an unlicensed small loan company.  The FinTech company was also cited for operating as an unlicensed consumer collection agency, and for engaging in deceptive acts or practices under consumer protection laws.

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Navy Federal Again Ranked No. 1 Among Multichannel Banks For Customer Experience

VIENNA, Va.--(BUSINESS WIRE)--For the seventh year in a row, Navy Federal Credit Union ranks No. 1 among multichannel banks for customer experience (CX) quality in Forrester’s proprietary 2022 US Customer Experience Index (CX Index™). The ranking was based on responses from more than 96,000 survey respondents from 13 industries, including airlines, auto and home insurers, auto manufacturers (luxury and mass market), banks (direct and multichannel), credit card issuers, federal government agencies, health insurers, hotels, investment firms, retailers, and utilities. The credit union is also named a CX Elite brand (a top 5% brand in the entire CX Index) for banks (multichannel) and credit card issuers.

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Merchant cash advance operators settle FTC charges for bilking small businesses

The dual dynamos that power our economy are America’s 32 million small businesses and the more than 60 million people they employ. So when small businesses become targets for misleading claims, deceptive tactics, and flat-out intimidation, the FTC takes notice. That’s the gist of the agency’s 2020 lawsuit against merchant cash advance outfit RCG Advances, LLC and owner Robert Giardina. A just-announced settlement will return more than $2.7 million to consumers and includes a key provision to protect small businesses in the future.

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Topics for FTC PrivacyCon 2022 include commercial surveillance, automated decision-making

The FTC’s seventh annual PrivacyCon is scheduled for November 1, 2022. It’s not the upcoming Bonnaroo festival, and it won’t be headlining Stevie Nicks, J. Cole, Herbie Hancock, and Robert Plant. But then again, how much can you learn about the latest privacy- and security-related trends and research from “Landslide”? Follow the Business Blog for updates about the agenda for the November 1st virtual event. And keep in mind another important date that’s just seven weeks away.

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CFPB Strengthens Enforcement Efforts by States

Recently, the CFPB issued an interpretive rule providing further clarity concerning the scope of State enforcement under Section 1042 of the Consumer Financial Protection Act (CFPA).  Specifically, the CFPB issued three interpretations: (1) States are permitted to enforce any provision of the CFPA, including provisions that make it unlawful for covered persons or service providers to violate federal consumer financial laws; (2) limitations on the CFPB’s enforcement authority do not constrain enforcement authority of the States; and (3) States are not prohibited from bringing concurrent enforcement actions with the CFPB.

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CFPB Warns Complex Consumer Credit Decision Models May Violate ECOA

On May 26, 2022, the Consumer Financial Protection Bureau warned via Consumer Financial Protection Circular 2022-03 that creditors using complex algorithmic credit evaluation models are not shielded from complying with the Equal Credit Opportunity Act (ECOA) requirement that consumers receive notice of the reasons why a lender took adverse action on an application or existing credit account. If a model is complex to the point that the creditor cannot articulate the reason a consumer was denied credit, use of the model may violate ECOA.

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Industry Events

RMAi Executive Summit 2022


The Osthoff Resort
Elkhart LakeI , WI
August 02 - 04 , 2022


DCS2022 – Debt Connection Symposium and Expo 2022

Red Rock Casino Resort Spa 11011 W Charleston Boulevard
Las Vegas , Nevada
September 07 - 09 , 2022