Debt Collection

Operation Collection Protection Targets Abusive and Deceptive Debt Collectors

Late last year, the Federal Trade Commission (FTC) revealed an ongoing nationwide enforcement initiative targeting debt collectors, called Operation Protection Collection.  The initiative is the first of its kind coordinated crackdown by state and federal enforcers targeting abusive and deceptive debt collection practices.  According to statements by the FTC, the…

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Tenth Circuit Bankruptcy Appellate Panel Approves Settlement Agreement with Foreclosing Lender Over Objections of the Debtor

Often overlooked by lenders and servicers, sometimes striking a deal with the Chapter 7 Trustee in bankruptcy court, is the more prudent and cost effective approach to resolving frivolous lawsuits filed by defaulting borrowers in state court.  In Brumfiel v. Lewis, Chapter 7 Trustee, et al. (In re Lisa Kay…

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No Summer Vacation for Student Lending Companies as Enforcement Activity Continues

Student lending continues to remain in the crosshairs of federal and state consumer finance regulators during the summer months, with over five enforcement actions and investigations in recent weeks.  As covered in both LenderLaw Watch (LLW) and Consumer Finance Enforcement Watch (CFEW), this is a small part of a larger…

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Servicers Beware: RESPA Transfer of Servicing Letter May Trigger FDCPA Initial Debtor Communication Disclosure Requirement

In Hart v. FCI Lender Services, Inc., the Second Circuit made it clear that servicers should pay close attention to initial communications with borrowers upon commencing loan servicing when it determined in an August 12, 2015 ruling that FCI Lender Services, Inc.’s (FCI) initial communication with a borrower was not merely…

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The CFPB Targets Lender's Credit Card Division With More Than $200MM In Penalties

The Consumer Financial Protection Bureau (CFPB) has set its sights on debt collection practices again.  In April, we wrote about the CFPB’s $63 million settlement with a mortgage servicer, Green Tree Mortgage, in part for Green Tree’s alleged treatment of mortgage debt.  On July 8, 2015, the CFPB once again demonstrated it was…

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Mortgage Servicer Agrees to Pay More Than $60 million for Alleged “Abusive” Collection Practices

The mortgage servicing industry remains under scrutiny, as evidenced by the recent joint enforcement action against Green Tree Servicing, LLC by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC).   In a joint complaint filed in Minnesota, the regulators allege that Green Tree, through its collection activities…

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CFPB Director Faces Tough Questions Before House Committee on Financial Services

On March 3, 2015 CFPB Director Richard Cordray appeared before the House Committee on Financial Services to deliver testimony regarding the Bureau’s work.  Director Cordray spent much of his semiannual address touting the Bureau’s efforts in the mortgage space.  In his written statement, Director Cordray commented on the Bureau’s Qualified…

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CFPB Orders Lender To Reduce Student Loan Principal Balances By $480 Million

The Consumer Financial Protection Bureau (CFPB) recently announced that it had reached an agreement to give students of Corinthian College, Inc. at least $480 million in principal reductions on existing student debt. Former and current students will receive an immediate 40% reduction on existing principal balances of their loans with…

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What You Need To Know About The CFPB’s Proposal to Use the Dodd-Frank Act to Expand the FDCPA to First-Party Debt Collectors

Speculation abounds regarding what the CFPB’s expected 2015 rules regarding first party debt collectors will be.  Here’s the background you need to know. On November 12, 2013, the CFPB issued an Advance Notice of Proposed Rulemaking, seeking comments to its proposal to update the Fair Debt Collection Practices Act (“FDCPA”).  As…

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CFPB Spotlight Still On Student Loans

The latest CFPB Supervisory Highlights report details the Bureau’s concerns regarding student loan lenders.  The report, which is the fifth edition of Supervisory Highlights, generally covers supervisory activities between March and June 2014.  In it, the CFPB notes that its examiners found the following concerns when reviewing practices of student…

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Recent DOJ & CFPB Consent Orders Highlight ECOA Risks For Servicers

Synchrony Bank (formerly known as GE Capital Retail Bank) made two direct mail offers to its credit card holders, but it did not send the offers to Spanish-speaking customers.  The Bank self-reported its actions, resulting in consent orders with the Consumer Financial Protection Bureau and the Department of Justice, which…

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FTC Settles with Auto Lender over Improper Servicing, Collection, and Quality Control Practices

The Federal Trade Commission (FTC) recently announced a $5.5 million monetary and injunctive settlement with auto lender Consumer Portfolio Services, Inc. (CPS) concerning allegations that the company used illegal tactics in servicing and collecting consumers’ auto loans, and failed to adopt proper quality controls, in violation of Section 5 of…

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