At a glanceWednesday, August 24, 2022

Collection Industry News At A Glance - August 24, 2022
Wednesday August 24, 2022
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Biden-Harris Administration Announces Final Student Loan Pause Extension Through December 31 and Targeted Debt Cancellation to Smooth Transition to Repayment

Today, the U.S. Department of Education (Department) announced a final extension of the pause on student loan repayment, interest, and collections through December 31, 2022. Borrowers should plan to resume payments in January 2023.

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Exploring the connection between financial assistance for medical care and medical collections

In 2020, Americans spent $4.1 trillion on health care. Despite private insurance coverage and government programs like Medicare and Medicaid that cover all or part of the cost of medical treatments, consumers continue to incur significant medical expenses. By 2028, healthcare-related expenses are projected to reach $6.2 trillion.

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Attorney General Bonta Announces Settlement with Sephora as Part of Ongoing Enforcement of California Consumer Privacy Act

OAKLAND – California Attorney General Rob Bonta today announced a settlement with Sephora, Inc. (Sephora), resolving allegations that the company violated the California Consumer Privacy Act (CCPA), California’s first-in-the-nation landmark privacy law.

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CFPB: Safeguard Consumer Data or Face Liability

The CFPB recently published a circular clarifying liability under consumer financial protection law for 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. According to the CFPB. in the event of large scale, customer-base-wide breaches, consumers may become victims of targeted identify theft.

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CFPB considering changes to semi-annual credit card survey

The CFPB is seeking comments on changes to its semi-annual Terms of Credit Card Plans (TCCP) Survey.  Comments must be submitted by October 17, 2022.

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Federal Trade Commission Considers Rulemaking Pertaining to Consumer Privacy & Data

On August 11, 2022, the Federal Trade Commission (FTC) announced proposed rulemaking pertaining to “commercial surveillance and lax data security.”

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Thanks to Temporary Changes, U.S. Department of Education Announces Public Service Loan Forgiveness Surpasses $10 Billion in Debt Relief

Today, the U.S. Department of Education (Department) announced that it has approved more than $10 billion in debt relief for over 175,000 borrowers in 10 months through the Public Service Loan Forgiveness (PSLF) program. This follows changes the Department announced in October 2021 that transformed the program by changing certain rules to make it easier for public servants with federal student loans to have their debts cancelled.

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CFPB spotlights payments risks

The rapidly evolving payments ecosystem that aims to streamline commerce and payments for consumers also poses risks to them, the Consumer Financial Protection Bureau warned in a report published this month.

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CFPB Publishes Circular Confirming Failure to Safeguard Consumer Data Could Be Unfair in Violation of CFPA

On August 11, the CFPB published a Circularannouncing the CFPB’s increased focus on potential misuse and abuse of personal financial data. The Circular details circumstances under which financial companies could violate the CFPA by unfairly putting consumer data at risk through inadequate data security safeguards

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Industry Trade Groups and Small Business Administration Request Extension of FTC Safeguards Rule Deadline

Advocacy efforts are increasing for the Federal Trade Commission to extend its effective date for the Standards for Safeguarding Customer Information rule from Dec. 9 this year to Dec. 9, 2023. The rule requires financial institutions to develop, implement, and maintain a comprehensive information security program.

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Technology, Innovation, and Financial Services

Technology and innovation are a priority interest for my work at the Board of Governors. Technology can offer increased speed, lower costs, and greater efficiency in providing services and products in the financial industry. This week's conference agenda includes many of the topics I follow closely through our work on innovation.

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FTC Declines to Extend Comment Period on Proposed Auto Rule, Deadline For Comments Sept. 12

The Federal Trade Commission has declined to extend the public comment period for its proposed rule that would ban junk fees and bait-and-switch advertising tactics that can plague consumers throughout the car-buying experience. The deadline for members of the public to comment remains September 12, 2022.

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Alliant Credit Union Selects Upstart for a Personal Lending Fintech Partnership

CHICAGO & SAN MATEO, Calif.--(BUSINESS WIRE)--Alliant Credit Union, a fully digital, top 10 credit union in the U.S. with more than 650,000 members and over $15 billion in assets, today announced it has partnered with Upstart (NASDAQ: UPST), a leading artificial intelligence (AI) lending marketplace, to offer AI-powered personal loans nationwide.

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CFPB Signals Increased Scrutiny of Credit Card Industry Interest Rates

In a blog post that appeared last week, the CFPB reported on research into various factors considered significant in explaining current credit card interest rates.  The CFPB reported that over 175 million Americans have at least one credit card, half of which carry a balance that continues to accrue increasingly high interest rates. 

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Education Department’s Fresh Start Program Restores Borrowers’ Default Protections When Entering Student Loan Repayment

A one-year program from the U.S. Department of Education will help eligible borrowers in default as soon as the student loan repayment and interest deferral period ends, currently Aug. 31, 2022.

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Debt Consolidation Services Providers Ordered to Pay More Than $2 Million in Penalties and Restitution

BALTIMORE, MD (August 22, 2022) – Maryland Attorney General Brian E. Frosh announced today that his Consumer Protection Division has issued a Final Order against Marcia L. Bailey and Arthur Wittenberg along with their entities, Marcia Bailey Inc. trading as Signature Accounting and the Wittenberg Family Trust, for violating the Consumer Protection Act when they collected hundreds of thousands of dollars from consumers to help them consolidate and pay off outstanding consumer debt, but did not provide the promised services.

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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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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