At a glanceFriday, September 30, 2022

Collection Industry News At A Glance - September 30, 2022
Friday September 30, 2022
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Suit Over CFPB Anti-Discrimination Stand Is ‘Tip of the Iceberg’

A banking industry lawsuit against the Consumer Financial Protection Bureau over new anti-discrimination guidelines will likely spur more challenges to the agency’s fast-paced actions to rewrite rules.

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U.S. Department of Education Estimate: Biden-Harris Student Debt Relief to Cost an Average of $30 Billion Annually Over Next Decade

In August, the Biden-Harris Administration announced its plan to cancel up to $20,000 in student debt for eligible borrowers to give working and middle-class families more breathing room as they recover from the pandemic. Today, the U.S. Department of Education (Department) released its estimate of the costs of the Biden-Harris Administration's Student Debt Relief. The Department estimates that one-time student debt relief will cost an average of $30 billion a year over the next decade.

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CoreLogic: Estimated Losses from Hurricane Ian Wind, Storm Surge are Between $28 Billion and $47 Billion in Costliest Florida Storm Since Hurricane Andrew

IRVINE, Calif.--(BUSINESS WIRE)--CoreLogic®, a leading global property information, analytics and data-enabled solutions provider, today announced residential and commercial wind and storm surge loss estimates for Hurricane Ian. According to this new data analysis, wind losses for residential and commercial properties in Florida are expected to be between $22 billion and $32 billion. Insured storm surge losses in Florida are expected to be an additional $6 billion to $15 billion.

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CFPB Sues MoneyLion for Overcharging Servicemembers and Trapping Consumers in Costly Memberships

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) sued MoneyLion Technologies, an online lender, and 38 of its subsidiaries, for imposing illegal and excessive charges on servicemembers and their dependents. The CFPB alleges that MoneyLion violated the Military Lending Act by charging more than the legally allowable 36% rate cap on loans to servicemembers and their dependents, through a combination of stated interest rates and monthly membership fees.

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Populus Financial Group moves for dismissal of CFPB lawsuit and stay pending Fifth Circuit decision

Populus Financial Group, Inc., which does business as ACE Cash Express, has filed a motion to dismiss the lawsuit filed by the CFPB in July 2022 against Populus in a Texas federal district court in which the CFPB alleges that Populus engaged in unfair, deceptive, and abusive acts or practices by concealing the option of a free repayment plan to consumers and making unauthorized debit-card withdrawals.

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2022 Plain Writing Act Compliance Report

The Consumer Financial Protection Bureau’s ninth annual Plain Writing Act Compliance Report is presented to fulfill the Bureau’s statutory responsibilities pursuant to the Plain Writing Act of 2010. Our commitment to the goals of the Plain Writing Act is central to the Bureau’s mission to make consumer financial markets work for consumers. Fundamental to our mission is supporting and empowering consumers with the information, tools, and skills they need to make financial decisions to meet their own life goals.

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Feds slam N.J. bank for discriminatory lending, reach $13M settlement

A New Jersey bank has been ordered to pay $13 million to settle allegations that it avoided opening branches in Black and Hispanic communities in the Newark area and giving mortgages to people of color, federal authorities announced Wednesday.

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3rd Cir. Holds Pennsylvania Consumer Discount Company Act Does Not Apply to Mere Debt Buyers

The U.S. Court of Appeals for the Third Circuit recently affirmed a trial court’s dismissal of a putative class action complaint alleging that the defendant debt buyer violated the federal Fair Debt Collection Practices Act (FDCPA) by trying to collect interest supposedly in excess of limits imposed under Pennsylvania law.

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CFPB Supervisory Examinations Find Violations of Federal Law by Student Loan Servicers and University-Owned Lenders

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released a special edition of Supervisory Highlights on recent examination findings covering the practices of student loan servicers, and schools that lend to students directly. The exams found that these schools had improper blanket policies of withholding transcripts to force students to make payments. 

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Eight states file enforcement actions against crypto-lending platform Nexo

Eight states announced on Monday they’re bringing actions against the crypto-lending platform Nexo Group in connection with its unregistered, interest-bearing cryptocurrency product.

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CFPB sued over unlawful mortgage transparency rule

US trade groups have taken the Consumer Financial Protection Bureau (CFPB) to court for acting unlawfully in issuing an anti-transparency rule for mortgage lenders. Chief district judge Beryl Howell ruled that the CFPB overstepped its authority when it issued the Home Mortgage Disclosure Act (HMDA) in 2020, exempting 5% of all mortgage lenders from reporting critical data under the designed to prevent potential discrimination and redlining in banking services.

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Examining the potential impact of high vehicle costs on Americans with deep subprime credit scores

Vehicle prices have increased dramatically since 2019. In a recent blog post, other experts at the CFPB examined the potential impacts of these cost increases on consumers using information in consumer credit reports. This information is available through our Consumer Credit Panel (CCP), a deidentified sample of records from one of the three nationwide consumer reporting agencies.

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Regions Bank Comments on Settlement with the Consumer Financial Protection Bureau

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Regions Bank today commented on a settlement announced by the Consumer Financial Protection Bureau (CFPB) on Sept. 28 regarding one type of overdraft fee the bank stopped charging over a year ago. As part of the settlement, Regions will pay a $50 million civil monetary penalty and provide customer redress of approximately $141 million; the financial impact of the settlement will be reflected in the company’s results for the third quarter of 2022.

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Westlake Financial to Pay Over $225,000 to Resolve Servicemembers Civil Relief Act Claims

The Justice Department today announced that Westlake Financial has agreed to pay over $225,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by failing to provide qualified servicemembers with interest rate benefits for the entire period required under the SCRA and by improperly delaying approval of interest rate benefit requests.

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FTC Receives Flurry Of Comments As Dealers And Others Oppose New Car Dealer Rule

The Federal Trade Commission (FTC) received dozens of submissions from dealer trade associations, other industry participants, and members of Congress opposing the FTC’s proposed rules for dealers in connection with the advertising and sale of new cars in the run-up to the September 12, 2022 close of the public comment period for those rules, while consumer rights groups and a group of 17 state Attorneys General offered their support for the rule. 

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CFPB Orders Regions Bank to Pay $191 Million for Illegal Surprise Overdraft Fees

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) is ordering Regions Bank to pay $50 million into the CFPB’s victims relief fund and to refund at least $141 million to customers harmed by its illegal surprise overdraft fees. From August 2018 through July 2021, Regions charged customers surprise overdraft fees on certain ATM withdrawals and debit card purchases.

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Strange bedfellows petition CFPB to adopt larger participant rule for personal loans

The Center for Responsible Lending (CRL) and the Consumer Bankers Association (CBA) have filed a joint petition with the CFPB that urges the Bureau to engage in rulemaking to define larger participants in the market for personal loans.  In February 2022, the CFPB established a new procedure for members of the public to submit petitions for rulemaking (including amendments to or repeals of existing rules).

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Help us spur new opportunities for homeowners in the mortgage market

Mortgage payments are often a household’s single largest expense, so the terms of a mortgage greatly impact a household’s financial stability. When interest rates decline, many borrowers benefit from the lower rates by refinancing their loans. However, mortgage refinancing can be harder to access for borrowers with smaller loan balances. Black and Hispanic borrowers, who on average have smaller loans, have not participated in recent refinance booms at the same rate as white borrowers.

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Attorney General Bonta, Senator Eggman, and Pro Tem Atkins Celebrate Signing of Legislation to Strengthen Consumer Protections for Military Service Members

SACRAMENTO – California Attorney General Rob Bonta, Senator Susan Talamantes Eggman (D-Stockton), and Senate President pro Tempore Toni G. Atkins (D-San Diego) today applauded Governor Gavin Newsom for signing Senate Bill 1311 (SB 1311). SB 1311 strengthens financial and legal protections for active duty service members, veterans, and their families.

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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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CFPB’s Latest Circular on Nursing Home Bills Hits Federal Register

Of note, according to the news release from the CFPB, “while the CFPB does not enforce the Nursing Home Reform Act, contract terms that violate the [a]ct’s ban on requesting or requiring a third-party guarantee of payment are unenforceable. This means that subsequent collection of debts from those contracts may violate the consumer financial protection laws the CFPB does enforce, including the Fair Debt Collection Practices Act and its prohibition of ‘any false, deceptive, or misleading representation or means in connection with the collection of any debt.’”

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OCC Assesses $6 Million Civil Money Penalty Against Sterling Bank and Trust, FSB

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today assessed a $6 million civil money penalty against Sterling Bank and Trust, FSB, Southfield, Mich. The OCC also terminated the June 18, 2019, Formal Agreement between the bank and the OCC.

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Banc of California Enters Payment Processing Business with Acquisition of Deepstack Technologies

SANTA ANA, Calif.--(BUSINESS WIRE)--Banc of California, Inc. (NYSE: BANC) (the “Company”), the parent holding company of Banc of California, N.A. (the “Bank”), today announced that the Bank has acquired the payments platform and technology of Global Payroll Gateway, Inc. and its wholly-owned subsidiary, Deepstack Technologies, LLC (collectively, “Deepstack”) for $24 million in cash and stock. Headquartered in Jupiter, Florida with a team located in Southern California, Deepstack is a differentiated software-led and e-commerce payments platform that provides clients with payment solutions, including merchant processing, payments acceptance and disbursements, tokenization, virtual accounts, fraud protection tools, chargeback management, and reconciliation and reporting services.

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Consumer Debt Hits Record for Most Americans, Except the Wealthy

Consumer debt, including credit cards, rose to an all-time high for the 118 million US households among the bottom 90%, according to the Federal Reserve’s latest data on the distribution of household wealth.

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Arkansas Federal Credit Union improper repossessions $2.35M class action settlement

Arkansas Federal Credit Union agreed to forgive $2.35 million in outstanding balances as part of a settlement resolving claims it violated repossession laws.

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Buy now, pay later – and comply with the FTC Act immediately

Companies are increasingly marketing payment plans known as Buy Now, Pay Later (BNPL). Although BNPL plans vary in their exact terms, people typically pay for purchases over a period of several weeks, generally in equal installments. To transform consumers into customers, companies often make a variety of claims about the costs and conditions of BNPL plans. If your business offers BNPL payment options as a retailer or BNPL company – or if you play a role in the BNPL ecosystem as a marketer, collector, etc. – remember that basic consumer protection ground rules of the FTC Act apply.

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Enhanced Credit Union Diversity Self-Assessment Improves Use Experience

ALEXANDRIA, Va. (Sept. 26, 2022) – To increase the accessibility and functionality of the Credit Union Diversity Self-Assessment, the NCUA has introduced several process improvements. These enhancements include additional details for submitting surveys, improved navigation, prepopulation of certain fields, and compliance with the 21st Century Integrated Digital Experience Act. The modernization also upgrades security and ensures data integrity and confidentiality.

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Details Released on State-by-State Student Debt Relief

The Biden administration and U.S. Department of Education (DOE) have released new details on the targeted student debt relief plan and student loan payments set to resume in January 2023, including state-by-state data on the impact for borrowers.

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CFPB Examines Potential Impact of Rising Car Prices on Consumer Credit

On September 19, the Consumer Financial Protection Bureau (CFPB) released a blog post, exploring the potential relationship between rising car prices and changes in auto loan performance. The CFPB found that the rate of delinquency, especially for low-income borrowers, has risen over the past year. For example, auto loans for consumers with deep subprime credit scores were 2.4% delinquent two quarters after origination, which is a 33% increase from the previous five-year high set in 2020.

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Industry Events

ACA 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