At a glanceFriday, August 19, 2022

Collection Industry News At A Glance - August 19, 2022
Friday August 19, 2022
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CFPB Circular: Safeguard Consumer Data or Face Liability

On August 11, the CFPB published a circular clarifying liability under consumer financial protection law for bank and nonbank financial companies that fail to safeguard consumer data. The circular describes how firms may be violating the CFPA’s prohibition on unfair acts or practices with respect to the handling of consumer data by not implementing adequate measures to protect against data security incidents.

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National Mortgage Servicer To Provide $3.2 Million in Relief to Massachusetts Homeowners in Settlement With AG’s Office

BOSTON — A national mortgage servicer will provide $3.2 million in relief for Massachusetts consumers to settle allegations that it engaged in unfair and deceptive conduct through its mortgage servicing, debt collection, and foreclosure practices, Attorney General Maura Healey announced.

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HARRISBURG, PA – Attorney General Shapiro announced today that he’s leading a multistate lawsuit against Mariner Finance for widespread violations of multiple consumer protection laws. The suit alleges that Mariner Finance charged consumers for hidden add-on products that consumers either didn’t know about or didn’t agree to buy.

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California Privacy Protection Agency Opposes Federal Data Privacy Law

The California Privacy Protection Agency (CCPA) is opposing federal data privacy legislation that would preempt California’s data privacy act and other state privacy laws, it announced this week.

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Why we’re modernizing how we collect credit card data

When shopping online or in store, people like to weigh the costs and benefits of different products before they make a purchase, but it can be a challenge for consumers to compare interest rates across credit cards. Often, this price is hidden behind other promotional terms such as introductory rates, cash back rewards, or sign-up bonuses.

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Judges Reject Challenges to 2 Arizona Ballot Initiatives

PHOENIX (AP) — Judges rejected challenges to two Arizona voter initiative on Wednesday, siding with proponents of a measure limiting so-called predatory debt collection and for one that would require people who fund political campaigns through nonprofit groups to be identified.

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Federal Trade Commission Sends More than $822,000 to Students Deceived by Student Advocates’ Debt Relief Scam

The Federal Trade Commission is sending 14,521 checks totaling more than $822,000 to borrowers who lost money to a student loan debt-relief scheme that operated under the name Student Advocates.

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Virginia group leads $1 billion of settlements with online lenders

A handful of Virginians, stung by triple-digit interest rates, have led a series of class action lawsuits that will bring nearly a billion dollars to more than one million borrowers across the nation.

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CFPB Warns Insufficient Data Security Measures May Violate Consumer Financial Protection Act

On Aug. 11, 2022, the U.S. Consumer Financial Protection Bureau (CFPB) issued Circular 2022-04, (Circular) indicating that financial institutions and service providers that fail to adopt sufficient data security measures to protect consumer financial data may violate the Consumer Financial Protection Act (CFPA) provision prohibiting unfair acts and practices.

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Illinois Amends Financial Institutions Code and Collection Agency Act

Illinois recently amended its Financial Institutions Code and Collection Agency Act. The amendments expand the definition of “financial institutions” to include consumer installment lenders, payday lenders, sales finance agencies, and other industries or businesses that offer services that are regulated by the Director of the Division of Financial Institutions.

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CFPB Addresses Data Security Expectations for Financial Institutions

On August 11, 2022, the Consumer Financial Protection Bureau (CFPB) published a Circular stating that the failure of financial institutions, including nonbank financial firms such as fintech companies and credit reporting agencies, to adequately safeguard their customers’ personal data, may violate the Consumer Financial Protection Act (CFPA). The CFPA prohibits unfair, deceptive, and abusive acts or practices. Consistent with Director Chopra’s past statements, this Circular sends a clear signal that regulating nonbank financial firms’ data security practices remain a high priority for the agency. 

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The CFPB Expands Its UDAAP Authority Further Into Data Security Issues

Continuing a trend it has been pursuing, the CFPB on Thursday used a non-rulemaking circular (Consumer Financial Protection Circular 2022-04) to state that its UDAAP authority extends its enforcement authority to situations where financial institutions have insufficient data protection or information security.

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NEW YORK, Aug. 16, 2022 /PRNewswire/ -- S&P Dow Jones Indices and Experian released today data through July 2022 for the S&P/Experian Consumer Credit Default Indices. The indices represent a comprehensive measure of changes in consumer credit defaults and show that the composite rate rose four basis points to 0.57%. The bank card default rate fell 11 basis points to 2.44%. The auto loan default rate was four basis points higher at 0.66% while the first mortgage default rate was up four basis points to 0.42%.

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Capital One Data Breach Settlement: Who Is Eligible for a Payment and How Much Could They Get?

If you're a Capital One customer, you may be eligible for a payout stemming from the company's infamous 2019 data breach, which exposed the personal information of more than 100 million people.

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U.S. Fed Opens The Door For Crypto Banks To Enter Traditional Banking System

The U.S. Federal Reserve has announced its final guideline that might allow crypto banks to enter the banking system. The central bank will set up a three-tiered system for determining whether financial institutions have access.

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CUs’ Sitting on Valuable Crypto Asset — the Ability to Educate

Cryptocurrencies’ popularity has soared since their introduction in 2008, achieving record growth last year. PYMNTS’ research shows that the share of consumers who held crypto rose from 16% in 2020 to 23% in 2021, and this percentage is even higher among credit union members. A recent report from the Credit Union National Association (CUNA) found that 39% of CU members owned cryptocurrencies, compared with just 17% of nonmembers. CU members are also seeking more innovation from their financial institutions (FIs), with nearly one-quarter of CU members saying they would take their business to another FI to obtain the innovative products and services they demand.

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Director Chopra’s Remarks on the Announcement Regarding the Cancellation of Loans for ITT Tech Students

Thank you all for being here today. Two decades ago, there was a surge in subprime mortgage lending in our country. Mortgage lenders dangled the American dream in front of people’s eyes, but many of those lenders knew that those borrowers would probably crash and burn.

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FTC undertakes inquiry into commercial surveillance practices and wants your insights

Commercial surveillance refers to the pervasive collection, tracking, and monetization of personal data. It’s an enterprise that has proven astonishingly lucrative for platforms and other businesses, but often thrives in the shadows without the knowledge of the consumers whose personal information is their stock-in-trade. The FTC has announced an Advance Notice of Proposed Rulemaking – and a September 8, 2022, virtual public forum – to take a closer look into harmful commercial surveillance practices and lax data security. We want your input into the prevalence of those practices and ways to address potential harms to consumers.

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Harris & Harris Firm Responds to Letter Claims Case from Washington Attorney General

Washington Attorney General Bob Ferguson has amended a state court lawsuit alleging violations of the Washington State Collection Agency Act and Consumer Protection Act by 14 Providence Health & Services Hospitals to include two collection agencies working with patients on behalf of the hospitals.

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Education Department approves $3.9 billion group discharge for 208,000 borrowers who attended ITT Technical Institute

Today, the U.S. Department of Education (Department) announced that it will discharge all remaining federal student loans that borrowers received to attend ITT Technical Institute (ITT) from January 1, 2005, through its closure in September 2016. The decision, which follows Departmental findings based on extensive internal records, testimony from ITT managers and recruiters, and first-hand accounts from borrowers, will result in 208,000 borrowers receiving $3.9 billion in full loan discharges. This includes borrowers who have not yet applied for a borrower defense to repayment discharge. These borrowers will have the federal student loans they received to attend ITT discharged without any additional action on their part.

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Attorney General Bonta Co-Leads Coalition in Support of Department of Education Efforts to Expand Access to Student Loan Forgiveness

OAKLAND – California Attorney General Rob Bonta, co-leading a multistate coalition with Illinois Attorney General Kwame Raoul and Massachusetts Attorney General Maura Healey, filed a comment letter in support of the U.S. Department of Education’s (ED) continued efforts to improve access to several critical student loan discharge programs, including the Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs. The letter builds on the Attorney General’s ongoing efforts to improve access to student loan forgiveness. Last week, Attorney General Bonta announced that the California Department of Justice will take part in the California Student Loan Debt Challenge to encourage Californians to take advantage of the PSLF Limited Waiver before the October 31 deadline.

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Businesses That Use Consumer Data or Data Products (Everyone?) Take Heed: FTC Moves Ahead with Rulemaking Process on “Commercial Surveillance” Practices

On August 11, 2022, the Federal Trade Commission (FTC) issued an Advance Notice of Proposed Rulemaking (ANPR) and announced it was exploring a rulemaking process to “crack down on harmful commercial surveillance” and lax data security.  The agency defines commercial surveillance as “the collection, aggregation, analysis, retention, transfer, or monetization of consumer data and the direct derivatives of that information.”

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Florida credit union buys bank for 10th such combo this year

Cantonment, Florida-based Harvesters Credit Union will acquire Panama City-based First National Bank Northwest Florida, according to a press release seen Monday by CUToday and American Banker.

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ACTS Retirement Services Faces Class Action over Data Breach

ACTS Retirement Services, Inc. (ACTS), a non-profit corporation that manages retirement communities, suffered a data breach in April 2022, which led to unauthorized access to thousands of current and former employees’ personal information. Specifically, names, Social Security numbers, and financial information were effected. As a result of this incident, ACTS now faces a data breach class action suit in which the plaintiffs allege that ACTS failed to implement adequate security systems to protect employee information, which led to the access of their information by cyber criminals.

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STCU hits $5 billion, eyes more branches in the Tri-Cities

Five years after it expanded into the Tri-Cities, STCU reports it has hit important milestones on its way to becoming a $5 billion institution, making it Washington’s third largest credit union after Boeing Employees and Gesa.

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New York Proposes Bigger Cyber Role for Bank, Insurer Boards

Boards of directors at financial institutions would have to step up their oversight of cybersecurity risks under proposed updates to regulations from New York state’s Department of Financial Services.

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Portfolios For Sale

$11,610,700 Payday Loans
BAL Financial LLC

(617) 595-5794

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$4,575,424 Other
Capital Asset Management, Inc.

(317) 633-6633

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$500,000,000 Credit Cards
Capital Debt Solutions, LLC

(866) 305-5102

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Industry Events

DCS2022 – Debt Connection Symposium and Expo 2022

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

Mark Naiman at 619-363-2993