CFPB recognizes national whistleblower day

The CFPB is proud to recognize the importance of National Whistleblower Day, which occurs every year on July 30th. The American tradition of whistleblowing – revealing information about illegal activity within an organization -- dates at least to Benjamin Franklin and the Revolutionary War. And whistleblowers at financial institutions have long played an important role in alerting the public as well as government agencies to illegal misconduct.

California Privacy Protection Agency Board Votes to Oppose H.R. 8152, the American Data Privacy Protection Act

SACRAMENTO, Calif., July 28, 2022 /PRNewswire/ -- The California Privacy Protection Agency Board voted unanimously today to oppose as currently drafted H.R. 8152, the American Data Privacy and Protection Act (ADPPA), proposed federal privacy legislation that seeks to significantly weaken Californians' privacy protections by pre-empting the California Consumer Privacy Act and other state privacy laws. 

DCS2022 Features Best Selling Author as Keynote – The Ethics of Artificial Intelligence in Financial Services

The “Don’t Miss Keynote”: The Ethics of Artificial Intelligence in Financial Services is just one of many interesting and insightful featured speakers and panels at Debt Connection and Symposium this year. The keynote speaker, Clara Durodié, is a technology strategist specializing in the business and governance of artificial intelligence (AI) in financial services. Join best selling author and Oxford pHD, Clara Durodie, for engaging discussion on the ethics and impact of the use of artificial intelligence in financial services. www.dcs2022.com

CFPB Issues Advisory Opinion ‎Regarding Convenience Fees

On June 29, 2022, the Consumer Financial Protection Bureau (“CFPB”) issued an advisory opinion stating its view that the Fair Debt Collection Practices Act (“FDCPA”) prohibits debt collectors from collecting any amount, including convenience or pay-to-pay fees, unless expressly authorized by the agreement creating the debt or permitted by law. The advisory opinion also clarified that a debt collector may violate the FDCPA when it collects convenience fees through a third-party payment processor.

Director Chopra goes on the record with media

Director Chopra gave interviews this week to several news reporting outlets including American Banker, Law 360, Politico, and Bloomberg.  Below are some of highlights of the interviews as reported by those outlets, several of which also provided interview transcripts. 

CFPB encourages federal student loan servicers to conduct outreach to military borrowers on public service loan forgiveness

The Consumer Financial Protection Bureau (CFPB) is “encouraging” student loan servicers to identify their military borrowers in order to conduct proactive outreach encouraging them to consolidate their loans and submit applications for forgiveness under the Public Service Loan Forgiveness Program (PSLF). 

CFPB and Justice Department Caution Auto Finance Companies about Servicemember Protections

WASHINGTON, D.C. – The Department of Justice and the Consumer Financial Protection Bureau (CFPB) issued a joint letter today reminding auto finance companies of their responsibilities to recognize important legal protections for military families under the Servicemembers Civil Rights Act (SCRA). While servicemembers have the same rights as non-military borrowers, the SCRA provides additional rights to protect servicemembers and their families against unique financial challenges.

CFPB Fines U.S. Bank $37.5 Million for Illegally Exploiting Personal Data to Open Sham Accounts for Unsuspecting Customers

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) took action against U.S. Bank for illegally accessing its customers’ credit reports and opening checking and savings accounts, credit cards, and lines of credit without customers’ permission. U.S. Bank pressured and incentivized its employees to sell multiple products and services to its customers, including imposing sales goals as part of their employees’ job requirements. In response, U.S. Bank employees unlawfully accessed customers’ credit reports and sensitive personal data to apply for and open unauthorized accounts. U.S. Bank must make harmed customers whole and pay a $37.5 million penalty.

Credit Reporting Agencies’ CEOs Not Liable in FCRA Case; Court Grants Motion to Dismiss

A consumer’s Fair Credit Reporting Act claims against the three credit reporting agencies (CRAs) and their CEOs fell flat after Judge Susan M. Brnovich in the U.S. District Court for the District of Arizona found the plaintiff failed to properly serve the defendants under the FCRA and that her claims were invalid.

Court Finds Entity Partnering With Medical Provider Does Not Qualify as a Debt Collector Under the FDCPA

In Palacio v. Med. Fin. Sols., No. 21 CV 1288 (N.D. Ill. June 14, 2022), the court granted summary judgment in favor of the defendant, finding that it did not qualify as a “debt collector” under the Fair Debt Collections Practice Act (FDCPA).

Attorney General Ellison protects Minnesotans from unfair billing and collections with extension of Hospital Agreement

July 27, 2021 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his Office has negotiated an extension to the regulatory agreement that the Attorney General’s Office holds with all nonprofit hospitals in Minnesota, referred to as the “Hospital Agreement.” The Agreement provides important protections to Minnesotans who receive healthcare services at Minnesota’s hospitals by protecting patients from abusive, harassing, and deceptive practices when hospitals seek to collect medical debt. The Agreement also provides discounts on healthcare services for certain patients and prohibits unfair practices in billing and collections.  

RMAI Publishes The Purchase, Sale, and Collection of the Fintech Asset Class

July 28, 2022 (Sacramento, CA) – The Receivables Management Association International (RMAI) is pleased to announce the release of a new educational resource, The Purchase, Sale, and Collection of the Fintech Asset Class. The area where financial service products and technology merge is popularly referred to as fintech. Fintech lending has experienced significant growth in the last several years, leading to an increase in nonperforming accounts. Fintech lenders are turning to the receivables management industry for contingency collections and portfolio debt sales. To better understand this asset class, its characteristics, opportunities, and unique issues as it relates to collections, the RMAI Fintech Legal Working Group, formed in 2021, developed this primer.

Director Chopra’s Prepared Remarks at a Joint DOJ, CFPB Press Event on the Trident Enforcement Action

For many years, nonbank lenders have been able to avoid many of the legal obligations and responsibilities of traditional banks. Even the Community Reinvestment Act of 1977, specifically passed to address the consequences of redlining and one of our most important tools for encouraging financial institutions to meet the credit needs of low- and moderate-income neighborhoods, exempts nonbank lenders.

Office of Research blog: Housing inflation is hitting low-income renters

Inflation was higher over the last year than it’s been for nearly 40 years. Prices for many things have been rising. But not all prices rise at the same rate, so how someone experiences inflation depends on what they buy, how their income has changed, and what they own. This post considers one area where inflation experiences differ sharply: housing.

CFPB, DOJ Order Trident Mortgage Company to Pay More Than $22 Million for Deliberate Discrimination Against Minority Families

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) and U.S. Department of Justice (DOJ) took action to end Trident Mortgage Company’s intentional discrimination against families living in majority-minority neighborhoods in the greater Philadelphia area. The CFPB and DOJ allege Trident redlined majority-minority neighborhoods through its marketing, sales, and hiring actions. Specifically, Trident’s actions discouraged prospective applicants from applying for mortgage and refinance loans in the greater Philadelphia area’s majority-minority neighborhoods

Paid and Low-Balance Medical Collections on Consumer Credit Reports

In 2015, the national credit reporting companies announced the National Consumer Assistance Plan (NCAP) as part of a settlement with numerous State Attorneys General, which included provisions for the reporting of medical debt.¹ As part of the NCAP, the companies committed to no longer reporting medical collections that were less than 180 days past due and removing medical collections that have been paid by insurance. Both of these provisions were intended to prevent consumers’ credit from being penalized for debts that were not the consumers’ responsibility to pay.

Debt Collection Rule FAQs

This is a Compliance Aid issued by the Consumer Financial Protection Bureau. The Bureau published a Policy Statement on Compliance Aids, available here, that explains the Bureau’s approach to Compliance Aids.

NCUA wants credit unions to join the cyber incident reporting game

The National Credit Union Administration, a small federal agency created in 1970 to supervise federal credit unions, will propose a new regulation this week that would compel federal insured credit unions to report “substantial” cyber incidents to the government within 72 hours. Such notification would function as an “early alert” to the government and would not require detailed incident assessments within that timeframe, according to a notice set to publish in tomorrow’s Federal Register.

Proposed California Commercial UDAAP and Annual Reporting Regs to be promulgated under California Consumer Financial Protection Law

Two weeks after the DFPI set a Dec. 9 effective date for its long-threatened commercial financing disclosure requirement (we discussed these regulations in a previous bog, here), the DFPI issued proposed commercial UDAAP and annual reporting regulations likely impacting many of the same companies. Specifically, the proposed regulations would apply to providers of commercial financing or other financial products and services to small businesses, nonprofits, and family farms, and would (i) expand the DFPI’s UDAAP authority, and (2) impose annual reporting requirements on covered providers (we briefly discussed these proposed regulations in a previous blog post here).

Eleventh Circuit Reiterates Availability of Postjudgment Rule 11 Sanctions

The Court of Appeals for the Eleventh Circuit recently reversed a district court’s denial of Rule 11 motions filed after final judgment had been entered. The Eleventh Circuit found the district court incorrectly read recent precedent as overruling earlier decisions that allowed postjudgment Rule 11 motions. In so doing, the Eleventh Circuit reiterated that simply because final judgment has been entered, this does not foreclose the availability of sanctions under Rule 11.

CFPB Extends RFI on Credit Card Fees and Late Payments

The Consumer Financial Protection Bureau’s recent advance notice of proposed rulemaking (ANPR) to examine credit card fees has been extended for comments through Aug. 1.

CFPB’s Chopra Defends Guidance Docs Targeted by Industry Critics

CFPB Director Rohit Chopra defended his policy-making through advisory opinions and other agency documents as an exercise in transparency, responding to charges that he makes unilateral decisions without industry input.

Tune into Military Consumer all year long

As Military Consumer Month comes to a close, the work doesn’t end here. While servicemembers, veterans, and their families do so much for our country, scammers continue to target their hard-earned salaries and benefits year-round.

IBM Report: Consumers Pay the Price as Data Breach Costs Reach All-Time High

CAMBRIDGE, Mass., July 27, 2022 /PRNewswire/ -- IBM (NYSE: IBM) Security today released the annual Cost of a Data Breach Report,¹ revealing costlier and higher-impact data breaches than ever before, with the global average cost of a data breach reaching an all-time high of $4.35 million for studied organizations. With breach costs increasing nearly 13% over the last two years of the report, the findings suggest these incidents may also be contributing to rising costs of goods and services. In fact, 60% of studied organizations raised their product or services prices due to the breach, when the cost of goods is already soaring worldwide amid inflation and supply chain issues

California Privacy Protection Agency Issues Notice of Proposed Rulemaking

The California Privacy Protection Agency (Agency) recently issued a notice of proposed rulemaking to amend the California Consumer Privacy Act (CCPA) regulations to make them consistent with amendments to the CCPA and to implement provisions under the Consumer Privacy Rights Act (CPRA) establishing new rights for consumers and requirements on businesses.  The Agency was established by the CPRA and tasked with implementing and enforcing the CCPA, including promulgating regulations on specific topics.

CFPB Orders Hyundai to Pay $19 Million for Widespread Credit Reporting Failures

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) penalized Hyundai Capital America (Hyundai) for repeatedly providing inaccurate information to nationwide credit reporting companies and failing to take proper measures to address inaccurate information once it was identified between 2016 and 2020. The CFPB found that Hyundai used manual and outdated systems, processes, and procedures to furnish credit reporting information—which led to widespread inaccuracies—and resulted in negative inaccurate information being placed on consumers’ credit reports through no fault of their own.

U.S. Foreclosure Starts Up More Than 440% Year-Over-Year

Black Knight Inc. has released a “first look” the latest iteration of its Mortgage Monitor Report for June 2022, which looks at delinquency and foreclosure rates across the U.S. 

CFPB Imposes Several New Duties on Big Data Brokers

The Consumer Financial Protection Bureau (“CFPB”) has issued several statements affecting the credit reporting industry in the last few months, including one on medical debts and one on auto financing, while at the same time emphasizing that the definition of a consumer reporting agency (“CRA”) should be interpreted broadly to include not just credit reporting companies and tenant screeners but also “other data brokers.” 

Pyramid Federal Credit Union Partners with Asa to Modernize the Member Experience

PROVO, Utah--(BUSINESS WIRE)--Asa connects financial institutions with customer-facing fintechs in a secure, compliant and easy to implement marketplace. The company today announced that Tucson, Ariz-based Pyramid Federal Credit Union has selected the Asa platform, embracing collaborative banking to quickly introduce new technologies.

CT Consumers To Get Refund From Payday Loan Collection Agency

CONNECTICUT — The state Department of Banking came to an agreement with a consumer collection agency that was trying to collect on payday loans that can't be enforced in Connecticut.

CFPB expected to issue new guidance requiring banks to repay more fraud victims

According to a WSJ report, the CFPB is preparing to release new guidance that would require banks to make refunds to victims of scammers who defraud consumers into sending money to a third party using an online money-transfer platform.  The WSJ indicates that the CFPB’s possible action is being driven by an increase in consumer complaints to the CFPB about such scams.  

Credit union loans increased 2.3% in May

Credit union loans outstanding increased 2.3% in May, compared to a 1.9% increase in April of 2022 and a 0.8% increase in May of 2021, according to CUNA's latest Monthly Credit Union Estimates.

CFPB to make organizational changes

According to media reports, CFPB Deputy Director Martinez sent a memo to staff last week announcing the following organizational changes:

Time is running out for student loan servicers to help servicemembers with student loans get debt relief

In 2007, Congress created the Public Service Loan Forgiveness (PSLF) program to encourage citizens to serve their communities and their country through public interest work—including military service. For years military borrowers have complained to the CFPB about sloppy student loan servicing practices that have kept them from getting the benefits PSLF promised. And in 2020, the GAO reported that 176,906 active-duty servicemembers had federal loans eligible for the PSLF program or that could be consolidated into eligible loans, but that only 124 servicemembers had received loan forgiveness under PSLF.

Military families combat identity theft amid life transitions

It’s summer, peak moving season for military servicemembers and their families. You’ve got enough on your plate without having to worry about identity theft. But the reality is scammers are getting more and more clever with their tactics to swindle members of the military community.

RMAi Executive Summit 2022

RMAi

DCS2022 – Debt Connection Symposium and Expo 2022