At a glanceFriday, September 16, 2022

Collection Industry News At A Glance - September 16, 2022
Friday September 16, 2022
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Senate Banking GOP: ‘The CFPB Must Stay Within the Boundaries of the Law’

Members of Congress on the Senate Committee on Banking, Housing and Urban Affairs are urging Consumer Financial Protection Bureau Director Rohit Chopra to rein in the bureau’s regulatory overreach. The topic, also prevalent in bipartisan Senate and House committee hearings on Chopra’s semiannual report to Congress this spring, resurfaced Sept. 12 in a letter to Chopra from U.S. Sens. Pat Toomey, R-Pa., and Richard Shelby, R-Ala., and the remaining GOP members of the committee.

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Farewell, Hunstein—Eleventh Circuit Holds Disclosing Debtor’s Information to Mail Vendor Does Not Establish Concrete Harm

In Hunstein v. Preferred Collection and Management Services, Inc., 2022 WL 4102824 (11th Cir. Sept. 8, 2022), the Eleventh Circuit’s En Banc Panel reversed the prior panel’s decision and held “no concrete harm, no standing,” citing the United States Supreme Court’s decision in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). As such, the Eleventh Circuit held that the United States District Court for the Middle District of Florida (“District Court”) lacked jurisdiction to adjudicate plaintiff’s claim, vacated the District Court’s Order, and remanded with instructions to dismiss the case without prejudice.

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CFPB Says Consumers at Risk From BNPL Over-Extension

For buy now, pay later (BNPL), heady growth demands some new guardrails. The Consumer Financial Protection Bureau report, “Buy Now, Pay Later: Market trends and Consumer Impacts” has been long awaited and debuted Thursday (Sept. 15) with the recommendation that there be new measures put in place to safeguard consumers as they continue to embrace the nascent payment method.

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Generational Divide Evident in Latest TransUnion Consumer Pulse with Younger Americans More Positive About their Financial Future

The youngest generations continue to be more optimistic about their financial future in the next 12 months than their older counterparts. The latest TransUnion (NYSE: TRU) Consumer Pulse study found that two in three Gen Z and Millennials remain optimistic compared to approximately half of Gen X and Baby Boomers. Overall, 53% of Americans remain optimistic about their financial future despite high inflation and recession worries.

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As ‘buy now, pay later’ plans grow, so do delinquencies

NEW YORK -- Americans have grown fond of “buy now, pay later” services, but the “pay later” part is becoming increasingly difficult for some borrowers.

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First-ever False Claims Act settlement received from Paycheck Protection Program lender

HOUSTON – Prosperity Bank has agreed to pay $18,673.50 to resolve allegations it improperly processed a Paycheck Protection Program (PPP) loan on behalf of an ineligible customer, announced U.S. Attorney Jennifer B. Lowery. 

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U.S. BNPL consumer debt set to hit $15 billion by 2025 – study

(Reuters) - U.S. buy-now-pay-later (BNPL) customers' outstanding debt is estimated to hit $15 billion by 2025, a report by management consultancy firm cg42 said on Thursday.

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The University of Michigan Credit Union receives 7 Awards

ANN ARBOR, Mich., Sept. 15, 2022 /PRNewswire/ -- The University of Michigan Credit Union, UMCU, has been recognized as a top workplace with seven awards for organizational development, marketing, business development, and employee engagement.

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Justice Department Announces Report on Digital Assets and Launches Nationwide Network

The Department of Justice today announced significant actions regarding digital assets, including the public release of its report, pursuant to the President’s March 9 Executive Order on Ensuring Responsible Development of Digital Assets,  on The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets;[1] and the establishment of the nationwide Digital Asset Coordinator (DAC) Network, in furtherance of the department’s efforts to combat the growing threat posed by the illicit use of digital assets to the American public.

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Justice Department Announces Enforcement Action Involving Over $100 Million in Losses to Department of Veterans Affairs

The Department of Justice announced guilty pleas by seven defendants in three separate cases in schemes to defraud the Department of Veterans Affairs (VA) Post-9/11 GI Bill education benefits program, including the largest known Post-9/11 GI Bill fraud case ever brought by the department.

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OCC Reports Improvement in Overall Mortgage Performance

WASHINGTON—The Office of the Comptroller of the Currency (OCC) reported that the performance of first-lien mortgages in the federal banking system improved during the second quarter of 2022. The OCC Mortgage Metrics Report, Second Quarter 2022 showed that 97 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 95 percent a year earlier.

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Director Chopra’s Prepared Remarks on the Release of the CFPB’s Buy Now, Pay Later Report

Thank you for joining us to discuss the CFPB’s report of findings related to the “Buy Now, Pay Later” product. Last year, the CFPB ordered a number of market players to turn over a range of data and business information. To prepare this report, we conducted a detailed analysis of this confidential information, as well as public submissions and other filings. We also engaged many of our international counterparts to understand their own market reviews.

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CFPB Study Details the Rapid Growth of “Buy Now, Pay Later” Lending

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) published a report offering key insights on the Buy Now, Pay Later industry. The report, Buy Now, Pay Later: Market trends and consumer impacts , finds that industry grew rapidly during the pandemic, but borrowers may receive uneven disclosures and protections. The five firms surveyed in the report originated 180 million loans totaling over $24 billion in 2021, a near tenfold increase from 2019.

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Federal Trade Commission Returns More Than $415,000 To Consumers Harmed by Deceptive Car Dealer Tate’s Auto

The Federal Trade Commission is sending payments totaling more than $415,000 to 3,508 consumers who financed a car or truck at a Tate’s Auto dealership after January 1, 2013, and later had the vehicle repossessed. Tate’s Auto, which operated dealerships in Arizona and New Mexico, allegedly deceived consumers about payment information and falsified information on consumers’ financing applications.

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Checks sent to consumers harassed by Yorba Capital Management

Obtaining consumer redress is a top priority in any enforcement action, and when the CFPB enforces the law, we or a court may require the person or company to compensate its victims for this harm by providing consumer redress out of its own funds. In certain circumstances, when the person or company doesn’t have sufficient funds, however, the CFPB uses a victims relief fund (also known as the Civil Penalty Fund) to compensate victims who haven’t received full compensation for their harm through redress paid by the defendant in their case. Learn more about the victims relief fund and other distributions.

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Wells Fargo in $94 million settlement over mortgage forbearance during pandemic

(Reuters) - Wells Fargo & Co has reached a $94 million settlement to resolve class-action claims it sent more than 200,000 struggling mortgage borrowers into forbearance during the COVID-19 pandemic without their consent.

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FTC, CFPB Submit Amicus Brief Defending Consumers’ Ability to Dispute Inaccurate Items on Credit Reports

The Federal Trade Commission joined the Consumer Financial Protection Bureau (CFPB) in filing an amicus brief with the U.S. Court of Appeals for the Third District in the case of Ingram v. Experian. The brief asks the appeals court to overturn a lower court’s decision that could create an exception to the Fair Credit Reporting Act (FCRA) allowing furnishers of credit information to decline to investigate when consumers dispute inaccurate information in certain circumstances. The brief argues that the holding could undercut a key protection provided by the FCRA that allows consumers to dispute and correct inaccurate information in their credit reports.

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U.S. Chamber Opposes FTC Rulemaking on Data Privacy

In public comments during the Federal Trade Commission’s (FTC) data privacy rulemaking open forum, a senior U.S. Chamber of Commerce came out against the agency making broad rules on data privacy.

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Hunstein Decision Informs Financial Services Industry Use of Third Party Vendors

More than a year ago on April 21, 2021, the 11th Circuit Court of Appeals issued an opinion in Hunstein v. Preferred Collection and Management Services Inc. that rocked the world of the debt collection industry, and the larger financial services industry in general. That decision put into question the legality of the common collection practice of using a third-party vendor to send collection letters to consumers. The practice was so common and universally accepted that even the Consumer Financial Protection Bureau acknowledged it as permissible in the debt collection rule it finalized in 2021.

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Furnishers have an obligation to investigate consumer disputes

Even minor inaccuracies on a credit report can lead to a consumer being denied a loan, housing, or a job. As a result, it is critical that consumers have a meaningful opportunity to correct errors or inaccuracies when they are identified. Over the years, however, companies have relied on a series of legally dubious arguments to try to prevent consumers from being able to resolve problems on their credit reports — and protect themselves from being held accountable — when mistakes are made.

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Brace Mortgage Servicing Pulse: Servicer and Consumer Data Suggest the Ongoing Downturn Will Not Yield the Fallout of the 2008 Market Crash

LOS ANGELES--(BUSINESS WIRE)--Brace, the mortgage servicing infrastructure fintech, observes in its latest Mortgage Servicing Pulse that changes in Servicing regulations following the Great Recession, coupled with accelerated digital adoption during the Covid pandemic, have engendered a fairer, more transparent and stable mortgage ecosystem. However, the end of foreclosure moratoriums, forbearances and the dual threat of rising inflation and recession risk has many Servicers thinking about how to best assure a healthy portfolio.

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CUNA research: Inflation posts slight increase

“The headline inflation increased slightly by one-tenth of a percentage point in August after staying flat in July. Prices declined for gas, used cars, and air travel. However, these declines are offset by increases in housing, food, and health care. Prices are 8.3% higher than a year ago, down from 8.5% in July.  

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NCUA Board Member Hood, NAFCU’s Berger discuss CU Industry growth, financial inclusion, more

NCUA Board Member Rodney Hood addressed credit unions during the first day of NAFCU’s 2022 Congressional Caucus sharing insights on the NCUA’s efforts to bolster financial inclusion and innovation. Hood also touched on supply chain constraints and inflation concerns but stated that he is “positive for the future of credit unions.”

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Attorney General Frosh Urges FTC to Strengthen Car Rules to
Prevent Consumer Harm, Misrepresentations

BALTIMORE, MD (September 13, 2022) – Maryland Attorney General Brian E. Frosh joined
a coalition of 18 attorneys general calling on the Federal Trade Commission to adopt and
strengthen guidance on automobile sales.

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‘Consumer spending has been remarkably stable,’ Visa CFO says

Visa Inc. continues to see signals that consumer spending is holding up well despite economic pressures, its chief financial officer said at a conference Monday.

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Bill to extend the California Debt Collection Licensing Act’s grace period provisions sent to Governor

On August 31, 2022, the California Senate voted to approve House Assembly Bill 156, and sent the bill to Governor Newsom for consideration and potential signature.  If it becomes law, the bill would amend the existing California Debt Collection Act (the “DCLA”) in three ways.

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Eleventh Circuit Clarifies Tests for Article III Standing, Changes Course on FDCPA and Mailing Vendors

On September 8, 2022, in Hunstein v. Preferred Collection and Management Services, Inc. , No. 19-14434, the Eleventh Circuit Court of Appeals issued an en banc decision which departs significantly from the panel decision on Article III standing issues and statutory causes of action. The case has broad implications for how the Eleventh Circuit applies Article III standing analysis, particularly in consumer finance cases, but also in other cases where a statutory violation has a dubious relationship to any real harm to the plaintiff.

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Bank Profits Rise Despite Headwinds

U.S. bank profits climbed 7.8% in the second quarter of 2022 from the previous quarter, according to the Federal Deposit Insurance Corporation (FDIC). The agency said banks reported $64.4 billion in profits as higher net interest income offset growing reserves to guard against loan losses. Profits were down $6.0 billion or 8.5% from a year ago. 

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Eleventh Circuit Clarifies Tests for Article III Standing, Changes Course on FDCPA and Mailing Vendors

On September 8, 2022, in Hunstein v. Preferred Collection and Management Services, Inc. , No. 19-14434, the Eleventh Circuit Court of Appeals issued an en banc decision which departs significantly from the panel decision on Article III standing issues and statutory causes of action. The case has broad implications for how the Eleventh Circuit applies Article III standing analysis, particularly in consumer finance cases, but also in other cases where a statutory violation has a dubious relationship to any real harm to the plaintiff.

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Industry Events

2022 Washington DC Regional Event

RMAI once again combines advocacy, education, and baseball to hit a networking home run – this time in Washington, D.C. RMAI regional events have changed from year to year, but they always sell out, so reserve your sponsorship and register early.

Washington DC ,
September 26 - 27 , 2022

916 482 2462

Fall Forum 2022

ACA International

Radisson Blu Aqua
Chicago , IL
November 02 - 04 , 2022

800 269 1607

RMAi 2023 Annual Conference

Join us in Las Vegas, February 6-9, for the 2023 RMAI Annual Conference. Registration opens October 3, 2022.

Las Vegas , Nevada
February 06 - 09 , 2023

916 462 2462