CFPB and DOJ Caution Auto Industry on SCRA Protections

Auto finance companies and others in the auto space should take note of a recent joint letter issued by the Consumer Financial Protection Bureau (CFPB) and Department of Justice (DOJ) about the legal protections under the Servicemembers Civil Relief Act (SCRA). In the letter, CFPB Director Rohit Chopra set out that “[t]he CFPB is closely monitoring the auto finance industry to ensure that servicemembers and their families are being treated fairly.”

U.S. FORECLOSURE ACTIVITY DROPS 4 PERCENT IN JULY 2022

IRVINE, Calif., Aug. 9, 2022 /PRNewswire/ -- ATTOM, a leading curator of real estate data nationwide for land and property data, today released its July 2022 U.S. Foreclosure Market Report, which shows there were a total of 30,358 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — down 4 percent from a month ago but up 143 percent from a year ago. 

CoreLogic: National Mortgage Delinquencies Reach Another New Low in May

IRVINE, Calif.--(BUSINESS WIRE)--CoreLogic, a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report for May 2022. For the month of May, 2.7% 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 percentage point decrease compared to 4.7% in May 2021.

CFPB Takes Action Against Hello Digit for Lying to Consumers About Its Automated Savings Algorithm

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) is taking action against Hello Digit, LLC, a financial technology company that used a faulty algorithm that caused overdrafts and overdraft penalties for customers. Hello Digit was meant to save people money, but instead the company falsely guaranteed no overdrafts with its product, broke its promises to make amends on its mistakes, and pocketed a portion of the interest that should have gone to consumers. Today’s order requires Hello Digit to pay redress to its harmed customers. It also fines the company $2.7 million for its actions.

CFPB Warns that Digital Marketing Providers Must Comply with Federal Consumer Finance Protections

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule laying out when digital marketing providers for financial firms must comply with federal consumer financial protection law. Digital marketers that are involved in the identification or selection of prospective customers or the selection or placement of content to affect consumer behavior are typically service providers for purposes of the law. Digital marketers acting as service providers can be held liable by the CFPB or other law enforcers for committing unfair, deceptive, or abusive acts or practices as well as other consumer financial protection violations.

AG Ferguson: Providence’s collection agencies broke the law while collecting medical debts

SEATTLE — Attorney General Bob Ferguson announced that he expanded his lawsuit against 14 Providence-affiliated hospitals, including five Swedish hospitals, by adding two collection agencies that worked for the hospitals. The Attorney General’s underlying consumer protection lawsuit stems from Providence’s charity care and collections practices impacting tens of thousands of patients and hundreds of millions of dollars in medical debt.

A Virtual Technical Readiness Session: Regulatory Data Collection at CFPB, HMDA and the road ahead

This event will be a technical conversation about software used by financial institutions to facilitate compliance with the CFPB’s small business lending rulemaking (referred to as 1071). The CFPB 1071 technical team will share insights into how the CFPB generally builds regulatory compliance systems for the intake of submitted information from financial institutions, such as Home Mortgage Disclosure Act (HMDA) reporting system.

CFPB to hold technical implementation meetings on 1071 reporting

Because the CFPB continues work on its Dodd Frank Act Part 1071 rulemaking—which pertains to the gathering of small enterprise lending information—the bureau will maintain two occasions within the coming weeks to debate technical implementation of the rule’s reporting necessities. In keeping with the CFPB’s spring rulemaking agenda that was launched earlier this summer season, a remaining rule is anticipated in March 2023

Trade groups petition CFPB to adopt larger participant rule for data aggregators

Eight national trade groups have filed a petition with the CFPB that urges the Bureau to engage in rulemaking to define larger participants in the market for data aggregation services. The trade groups are the American Bankers Association, Consumer Bankers Association, Credit Union National Association, Housing Policy Counsel, Independent Community Bankers of America, National Association of Federally Insured Credit Unions, National Bankers Association, and Clearing House Association. The petition has been docketed by the CFPB pursuant to the new procedure that the CFPB established in February 2022 for members of the public to submit petitions for rulemaking (including amendments to or repeals of existing rules).

Eleventh Circuit Holds TILA-Required Mortgage Statements Can Violate FDCPA

When mortgage servicers use periodic statements sent under the Truth in Lending Act (TILA) to collect a debt, they can be held liable under the Fair Debt Collection Practices Act (FDCPA) for any misleading or unconscionable representations made in those statements. Applying this reasoning, the Eleventh Circuit recently overturned a dismissal of a FDCPA case — Lamirand v. Fay Servicing, LLC — by a district court, which found that the statements were not subject to the FDCPA because they were required to be sent by the TILA.

Ginnie Mae recognizes credit unions as regulated depositories

The Government National Mortgage Association (GNMA, or Ginnie Mae) issued an amendment to its mortgage-backed securities guide removing credit unions’ categorization as non-bank mortgage lenders and recognizing them as insured depositories regulated by prudential regulator. CUNA has engaged with Ginnie Mae on this topic several times in recent months to get the categorization altered.

Attorney General Bonta Urges Californians to Take Advantage of Limited-Time Waiver Expanding Access to Public Service Loan Forgiveness Program

OAKLAND – California Attorney General Rob Bonta today urged Californians to take advantage of recent changes to the Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs. Last year, the Department of Education (ED) launched a limited-time PSLF Waiver Opportunity that runs through October 31, 2022, allowing eligible borrowers to receive credit for past payments made on loans that would otherwise not qualify under the PSLF program. This move by ED to improve the PSLF program followed a lawsuit and yearslong advocacy by state attorneys general and others urging ED to take robust action to fix the broken PSLF program. Following the resolution of the lawsuit, Attorney General Bonta has continued to advocate for changes to the PSLF program and today announced that the California Department of Justice will take part in the California Student Loan Debt Challenge to raise awareness about the PSLF program and help DOJ employees access loan forgiveness.

California Privacy Protection Agency Unanimously Opposes the American Data Privacy and Protection Act

The new California privacy regulatory body, the California Privacy Protection Agency (CPPA), has loudly voiced its opposition to the proposed federal American Data Privacy and Protection Act (ADPPA). 

Attorney General Bonta Leads Coalition in Support of Federal Effort to Strengthen Access to Banking and Credit Services for Underserved Communities

OAKLAND – California Attorney General Rob Bonta today led a coalition of 19 attorneys general in a comment letter in support of a joint effort by the Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency to revise and strengthen regulations under the Community Reinvestment Act (CRA). The CRA is a critical civil rights law enacted by Congress to prevent racially discriminatory redlining in housing, and encourage banks to help meet the credit needs of all segments of their communities, including low- and moderate-income (LMI) neighborhoods and individuals. In the comment letter, the coalition expresses its support for the federal agencies’ proposed rule, and urges them to go even further in implementing reforms to help tackle persistent racial and economic disparities exacerbated by COVID-19.

Center for Microeconomic Data

Household Debt Rises to $16.15 Trillion Amid Growth in Housing and Non-Housing Balances

Total household debt rose $312 billion, or 2 percent, in the second quarter of 2022 to reach $16.15 billion, according to the latest Quarterly Report on Household Debt and Credit. Mortgage balances—the largest component of household debt—climbed $207 billion and stood at $11.39 trillion as of June 30. Credit card balances saw their largest year-over-year percentage increase in more than twenty years, while aggregate limits on cards marked their largest increase in over ten years. Transitions into delinquency ticked up but remained very low compared to historical levels.

CFPB’s Chopra Has Payments and Crypto In Focus

On July 27, CFPB Director Chopra was interviewed in multiple publications, here and here, about, among other topics, how the CFPB could seek to help mortgage borrowers strained by the Federal Reserve’s battle against inflation and how the agency is looking at cryptocurrency. Below are some of the more important updates from the interviews.

Ford Credit Announces Effort To Open Online Bank In U.S.

Ford Credit – the automaker’s financing arm – has earned its fair share of accolades recently, including scoring the top spot among mass-market brands in J.D. Power’s 2021 U.S. Consumer Financing Satisfaction Study, as well as first place in the 2022 Canada Dealer Financing Satisfaction Study and the 2022 U.S. End of Lease Satisfaction Study. Even amid concerns that we’re in a bit of an automotive bubble, Ford Credit isn’t expecting an influx of delinquencies this year, either. Now, the finance company is aiming to expand its scope considerably after seeking to establish an industrial bank subsidiary in the United States dubbed Ford Credit Bank.

Proposed New Data Security Rules Could Prove Duplicative, Forcing Banks to Turn Over Dangerous Amounts of Secured Data

An amendment to the National Defense Authorization Act passed by the House in July would create a “systemically important entity” designation, applying new regulations and offering priority aid to certain critical infrastructure companies. But the American Bankers Association and Bank Policy Institute say the amendment as applied to financial institutions would duplicate existing regulations under the Dodd-Frank Act, while also requiring the turnover of a substantial amount of cybersecurity-related data that could prove dangerous in the wrong hands.

DCS Features “Battle of the Brokers” – Sept 8th

Battle of the Brokers - at Debt Connection Symposium, Sept 7-9 at the Red Rock in Las Vegas. Don't miss this super addition to the Debt Connection Symposium agenda. Three leaders of the industry take the stage - Lou DiPalma of Garnet Capital Advisors, Dave Ludwig of NLEX, and Bob Picone of Connect1 LLC. Hear competitors in the space each offering unique and different perspectives on topics including historical perspectives on debt purchasing, importance of relationships, technological innovation, and company culture. An unscripted panel discussion, guaranteed to deliver benefit to creditors, servicers, and debt buyers equally.  More details at: www.dcs2022.com

US national trade groups petition CFPB for data aggregation

The eight associations are the American Bankers Association, Consumer Bankers Association, Credit Union National Association, Housing Policy Council, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, National Bankers Association, and The Clearing House Association. 

U.S. Senate bill seeks to protect credit union members from cyber threats

U.S. Sens. Jon Ossoff (D-GA), Mark Warner (D-VA), and Cynthia Lummis (R-WY) introduced legislation in the U.S. Senate this week that seeks to protect credit union members from cybersecurity threats.

CFPB Probes Goldman’s GM, Apple Credit Card Business Practices

Goldman Sachs said Thursday (Aug. 4) it is cooperating with an investigation by the Consumer Financial Protection Bureau (CFPB) into its credit card business. In a regulatory filing Thursday, the investment banker said the CFPB probe was looking at Goldman’s “credit card account management practices, including with respect to the application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus.”

CFPB, State Regulators, and Courts Take Aim at Convenience Fees

The first half of 2022 has seen a flurry of activity at the state and federal level attempting to reign in "convenience fees" - fees charged by a creditor, debt collector, or third party to a consumer for making a payment via some means other than a check or cash, such as over the phone, online, or in some other expedited manner. Although state and federal regulators have scrutinized convenience fees in the past, the recent overt hostility at the state and federal level creates risk for creditors, servicers, and debt collectors who might ask a customer to pay those fees.

Lawmakers Seek Clarity on CFPB’s Rule to Expand States’ Enforcement Authority

In a letter to CFPB Director Rohit Chopra, GOP lawmakers on the House Financial Services Committee question the reach of the bureau’s interpretive rule on states’ enforcement authority—adding to concerns on the bureau’s recent approach from both sides of the aisle.

Attorney General James Stops New York City Landlords That Harassed Rent-Stabilized Tenants and Lied to Banks

NEW YORK – New York Attorney General Letitia James today announced a settlement with Ink Property Group LLC (Ink) for violating rent stabilization laws and illegally harassing tenants. Ink — managed by Eden Ashourzadeh, Alex Kahen, and then-Public Advocate James’ 2016 Worst Landlords List offender Robert Kaydanian — bought dozens of rent-stabilized buildings in low-income communities of color with the intention of illegally deregulating affordable housing for profit.

Kinecta Recognized as the #1 Credit Union Provider in the South Bay

MANHATTAN BEACH, Calif., Aug. 5, 2022 /PRNewswire/ -- The LA Times hosted the second annual reader's choice poll and Kinecta Federal Credit Union, a leading financial services provider based in the South Bay area of Los Angeles, was voted the number one credit union provider in the South Bay. This means Kinecta's members in the South Bay, Long Beach, South Los Angeles and the Southeast Los Angeles region made Kinecta their first choice for their banking needs. 

Federal Trade Commission Returns More Than $1 Million To Consumers Harmed by Global Asset Financial Services’ Phantom Debt Collection Scheme

The Federal Trade Commission is sending payments totaling more than $1 million to 1,966 consumers who were harmed by a debt collection scheme that conned consumers into paying debts they did not owe. The defendants used several names including GAFS Group, Global Mediation Group, and Mediation Services.

Buy Now, Pay Later Company Agrees to Cease Illegal Loans, Pay Refunds in Settlement

The DFPI has entered a settlement with Florida-based point-of-sale lender Four Technologies, Inc., in which the company has agreed to stop making loans, pay $2,500 in penalties, get a license, and refund $13,065 in illegal fees. 

AG Ferguson announces latest action in statewide initiative to reform towing industry and protect active duty service members’ rights

VANCOUVER — Attorney General Bob Ferguson announced today a court order will require Chuck’s Towing, a Clark County towing company, to pay three service members for illegally selling their cars at auction. The order also requires it to implement specific policies so it will not harm service members in the future.

DOJ and CFPB send notification letter to auto finance companies regarding SCRA protections

On July 29, 2022, the Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) issued a notification letter (the “joint letter”) to “remind” auto lenders and leasing companies of the protections provided to servicemembers and their dependents under the Servicemembers Civil Relief Act (SCRA).  The joint letter provides a very basic overview and reminder of the vehicle repossession protections, early vehicle lease termination rights, and interest rate cap available to eligible servicemembers under the SCRA.

The Convergence of Payments and Commerce: Implications for Consumers

In recent years, the payment space has moved from an ecosystem with clear constraints and established players to a rapidly evolving environment. While there has been significant attention paid to specific technologies and solutions (e.g., blockchain), there has been less attention paid to the broader changes occurring across the ecosystem. Retail banks, established payment networks, and online and physical world commerce organizations are creating new consumer experiences.

New risks emerge as line between payments and commerce blurs

Recent innovations across the payments ecosystem include the growing presence of Buy Now, Pay Later (BNPL) offerings, embedded commerce, and integrated “super apps.” Families, businesses, and the economy benefit when payments are fast and frictionless, and these emerging payment systems do make the user experience more “seamless” by integrating commerce and financial services. However, they also have the capacity to harvest user behavioral data to enhance their value propositions.

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