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09/10/2020

Bureau podcast series on paying for higher education

The CFPB yesterday released the first episodes of a two-part podcast series for students, parents, and practitioners on managing finances before, during, and after college. The podcast series, Financial inTuition, will include interviews with experts in financial aid, student loans, financial coaching, and planning. The podcasts also will highlight the Bureau’s bevy of resources and tools to help young adult consumers make sound financial decisions. The first part of the series, "Managing Your Money," consists of three episodes:

  1. "Financing Your Future: How to Pay for Higher Education" – This segment will offer tips on preparing for life after high school, and focus on key financial questions one should explore before making a college/higher education decision.
  2. "Managing Money as a Young Adult" ­– This episode will discuss budget and money management tips, including resources offered by the CFPB, and other advice on how to manage finances as a young adult.·
  3. "Understanding and Protecting Your Credit" – This episode will provide insight about understanding the importance of your credit and how to protect it. This episode will cover the function of nationwide credit bureaus and credit reports, how credit scores are calculated, how to build credit and more.

09/10/2020

FTC settles with student loan debt scheme operators

The Federal Trade Commission has announced that the operators of a student loan debt relief scheme will pay at least $835,000 to settle Commission allegations that they charged illegal upfront fees and made false promises to consumers struggling with student loan debt. The settlement resolves FTC litigation against Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi, five individuals who were named as defendants in the agency’s complaint against Arete Financial Group and several related companies. In the complaint filed in 2019, the FTC alleged that Arete and the other defendants pretended to be affiliated with the Department of Education and deceptively promised loan forgiveness, consolidation, and repayment programs to reduce or eliminate monthly payments and principal balances.

The proposed stipulated order bans the settling defendants from providing student loan debt relief services, prohibits them from violating the Telemarketing Sales Rule, and includes a monetary judgment of $43.3 million, which is partially suspended due to an inability to pay. The defendants will be required to surrender at least $835,000 and additional assets, which will be used for consumer redress. The order also requires the defendants’ full cooperation in the ongoing case and any related investigation.

09/10/2020

CFPB Summer 2020 Supervisory Highlights

The Consumer Financial Protection Bureau has published [85 FR 55828] in the Federal Register Issue 22 (Summer 2020) of its Supervisory Highlights report. This edition of the report discusses exam findings in the areas of consumer reporting, debt collection, deposits, fair lending, mortgage servicing and payday lending.

09/09/2020

NY AG and CFPB file suit against debt collection network

The New York Attorney General and the CFPB have filed suit against a network of five different companies based outside of Buffalo, New York, two of their owners, and two of their managers, for their participation in a debt-collection operation using illegal methods to collect debts.

The company defendants are: JPL Recovery Solutions, LLC; Regency One Capital LLC; ROC Asset Solutions LLC, which does business as API Recovery Solutions; Check Security Associates LLC, which does business as Warner Location Services and Orchard Payment Processing Systems; and Keystone Recovery Group. The individual defendants are Christopher Di Re and Scott Croce, who have held ownership interests in some or all of the defendant companies; and Brian Koziel and Marc Gracie, who are members of Keystone Recovery Group, and have acted as managers of some or all of the defendant companies.

The complaint alleges that from at least 2015 through the present, the defendants have participated in a debt-collection operation that has used deceptive, harassing, and improper methods to induce consumers to make payments to them in violation of the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act (CFPA). The New York Attorney General alleges violations of New York law based on the same conduct.

The complaint seeks consumer redress, disgorgement of ill-gotten gains, civil money penalties, and injunctive relief against the defendants.

09/09/2020

CFPB sues debt collectors and buyers

The Consumer Financial Protection Bureau has announced the filing of a lawsuit against Encore Capital Group, Inc. and its subsidiaries, Midland Funding, LLC; Midland Credit Management, Inc.; and Asset Acceptance Capital Corp. The companies, which are headquartered in San Diego, California, together comprise the largest debt collector and debt buyer in the United States, with annual revenue exceeding $1 billion and annual net income exceeding $75 million. Encore and its subsidiaries are currently subject to a 2015 consent order with the Bureau based on the Bureau’s previous findings that they violated the Consumer Financial Protection Act (CFPA), Fair Debt Collection Practices Act (FDCPA), and Fair Credit Reporting Act.

The Bureau's complaint alleges that since September 2015, Encore and its subsidiaries violated the consent order by suing consumers without possessing required documentation, using law firms and an internal legal department to engage in collection efforts without providing required disclosures, and failing to provide consumers with required loan documentation after consumers requested it. The complaint also alleges that the companies violated the consent order, the CFPA, and the FDCPA by suing consumers to collect debts even though the statutes of limitations had run on those debts and violated the consent order by attempting to collect on debts for which the statutes of limitations had run without providing required disclosures. The CFPB further alleges that the companies violated the CFPA by failing to disclose possible international-transaction fees to consumers, thereby effectively denying consumers an opportunity to make informed choices of their preferred payment methods. The Bureau also alleges that each violation of the consent order constitutes a violation of the CFPA.

09/09/2020

Consumer credit increased in July

The Federal Reserve System has posted its July 2020 G.19 Consumer Credit data. Consumer credit increased at a seasonally adjusted annual rate of 3-1/2 percent. Revolving credit decreased at an annual rate of 1/2 percent, while nonrevolving credit increased at an annual rate of 4-3/4 percent.

09/09/2020

Fed CRA evaluation ratings

The Federal Reserve Board made five CRA evaluation ratings public during August. Four of the evaluations were rated "satisfactory." One evaluation received an "outstanding" rating, earned by VCC Bank, Richmond, Virginia.

09/09/2020

FDIC releases CRA evaluation ratings

The FDIC has issued a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act. The list covers evaluation ratings that the FDIC assigned to institutions in June 2020. Of the 76 banks listed, 70 receive a "satisfactory" rating, and three were rated "needs to improve." Our congratulations to three banks who received "outstanding" ratings:

09/08/2020

FTC settlement shutters auto dealer group

The Federal Trade Commission has announced a group of auto dealerships in Arizona and New Mexico must cease business operations as part of a court -approved settlement resolving FTC charges that the dealerships deceived consumers and falsified information on vehicle financing applications. In a case filed in 2018, the FTC alleged that Tate’s Auto Center of Winslow, Inc.; Tate’s Automotive, Inc.; Tate Ford-Lincoln-Mercury, Inc. (doing business as Tate’s Auto Center); Tate’s Auto Center of Gallup, Inc.; and Richard Berry, an officer of the dealerships, falsified consumers’ income and down payment information on vehicle financing applications and misrepresented important financial terms in vehicle advertisements. The case continues against Berry and relief defendant Linda Tate.

09/08/2020

NMLS updates Policy Guidebook

The NMLS Policy Guidebook has been updated and posted to the NMLS Resource Center and the Regulator Resource Center.

The changes were made to the Criminal Background Checks Section on pages 61-62 and 96 to:

  • explain that fingerprints in NMLS must be no older than three years, otherwise an individual will need to be reprinted.
  • explain that new fingerprints must be submitted within the 180-day background check window.
  • add an explanation that international applicants will receive fingerprint packages in a traceable manner to their current physical or mailing international address or their employer’s address and that the applicant is responsible for providing a mailing label to facilitate the transmission of the packet.

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