At a glanceWednesday, September 21, 2022

Collection Industry News At A Glance - September 21, 2022
Wednesday September 21, 2022
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Utah federal court rejects constitutional challenge to CFPB’s funding mechanism

A Utah federal district court has rejected the attempt of The Center for Excellence in Higher Education (CEHE) to invalidate a civil investigative demand (CID) issued by the CFPB based on a challenge to the constitutionality of the CFPB’s funding mechanism.

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Reps. Welch and Gooden Introduce Bipartisan Credit Card Competition Act

Today, Representatives Peter Welch (D-VT) and Lance Gooden (R-TX) introduced the House companion to the bipartisan Credit Card Competition Act of 2022, introduced in July by Senators Dick Durbin (D-IL) and Roger Marshall, M.D. (R-KS). The legislation would finally bring needed competition and choice to the Visa-Mastercard dominated credit card network market.

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How companies manipulate you online – and what the FTC is doing to protect you

When you’re online, some companies try to trick you into buying things you don’t want. Or into giving them permission to use your personal information. The use of these deceptive designs, known as dark patterns, is on the rise, according to a new report from the FTC. So, what do these dark patterns look like — and how do they take your money and your data?

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Banking groups call on CFPB to subject fintechs to same level of lending oversight as banks

The Consumer Bankers Association (CBA) and the Center for Responsible Lending (CRL) are urging the Consumer Financial Protection Bureau (CFPB) to develop a rule that makes non-depository, non-bank lenders subject to the same level of CFPB supervision that large banks and credit unions are.

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NCUA Charters People Trust Community Federal Credit Union

ALEXANDRIA, Va. (Sept. 20, 2022) – The National Credit Union Administration has granted a federal charter and Share Insurance Fund coverage to People Trust Community Federal Credit Union in North Little Rock, Arkansas. “People Trust is aptly named. After all, it is by shared trust, commitment, and investment that credit unions pool resources to create stronger communities,” NCUA Chairman Todd M. Harper said. “This new credit union will open doors in central Arkansas to basic financial services like checking accounts for low- and moderate-income households.

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AG Healey Secures $12 Million in Relief From Debt Collection Company and Subsidiaries Over Unlawful Practices

BOSTON — Attorney General Maura Healey announced a $12 million settlement, including restitution and debt relief for Massachusetts consumers, with a national debt collection company and its subsidiaries for allegedly engaging in unfair and deceptive debt buying and collection in violation of state laws and the AG’s Debt Collection Regulations

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Market monitoring insights: Examining the potential credit impact of high vehicle costs for consumers

In our continued monitoring of the auto lending market, we examined available data to explore the potential relationship between rising car prices and changes in auto loan characteristics and performance. This post explores how rising car prices may be leading to larger loan amounts and monthly payments, and how this may be impacting consumers. We are particularly concerned about the impact of these changes on consumers’ financial health, especially for consumers with near-prime or subprime credit scores.

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California Regulator Proposes Changes to Student Loan Servicing Laws

On August 30, the Commissioner of the California DFPI issued a notice of rulemaking proposing new regulations and amendments to current regulations implementing the state’s student loan servicing laws. The proposed regulations aim to implement the provisions of the Student Loan Servicing Act and the Student Loans: Borrower Rights law by:

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AGs Weigh In on FTC Proposed Rule to Protect Consumers in Motor Vehicle Transactions

AGs from 16 states, the District of Columbia, and the Hawaii Office of Consumer Protection submitted comments in response to the FTC’s Notice of Proposed Rulemaking concerning its proposed Motor Vehicle Dealers Trade Regulation Rule (Proposed Rule).

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The 10 states with the highest average credit card debt—and they aren’t New York or California

Americans with credit card debt face a double whammy. First, there’s inflation. Prices on a broad basket of consumer goods are up 8.3% from this time last year, a figure that includes even larger hikes in the cost of food, shelter, gasoline and medical care. At the same time, credit card rates are on the rise. In an effort to tame inflation, the Federal Reserve has embarked on a series of hikes to short-term interest rates, which has in turn pushed up the rates on credit cards. Run a balance on your card and you’ll have to pay it back at a rate of 18.1%, on average, according to Bankrate — the highest rate since 1996.

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Data Point: 2021 Mortgage Market Activity and Trends

This Data Point article provides an overview of residential mortgage lending in 2021 based on the data collected under the Home Mortgage Disclosure Act (HMDA). HMDA is a data collection, reporting, and disclosure statute enacted in 1975. HMDA data are used to assist in determining whether financial institutions are serving the housing credit needs of their local communities; facilitate public entities’ distribution of funds to local communities to attract private investment; and help identify possible discriminatory lending patterns and enforce antidiscrimination statutes.

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CFPB Annual Report of 2021 Mortgage Market Activity Reveals an End to the Refinancing Boom and an Increase in Home Purchase Loans

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) released its annual report on residential mortgage lending activity and trends for 2021. The report’s data are submitted by thousands of the nation’s lending institutions under the Home Mortgage Disclosure Act (HMDA). The report shows a shift from refinance loans in 2020 to home purchase loans in 2021, with a greater share of home purchase loans going to Asian, Black, and Hispanic white borrowers relative to the share of home purchase loans for non-Hispanic white borrowers. 

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Federal Trade Commission, California Take Action To Shut Down Mortgage Relief Operation that Preyed on Struggling Homeowners

The Federal Trade Commission and the California Department of Financial Protection and Innovation (DFPI) are taking action against various companies doing business as Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America, and the owners of the companies, Dominic Ahiga and Roger Scott Dyer, for operating a sham mortgage relief operation that misled consumers and cost them millions.

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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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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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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