insideARM Weekly Recap – Week of October 21st, 2024

We know that ARM industry professionals are pressed for time. This is why the editorial team at insideARM sifts through all the news and highlights only the most important stories each week. Read on for a breakdown of these stories and why we think you need to know about them.

To start off the week, we highlighted a joint DOJ and CFPB complaint against a mortgage company, alleging redlining in majority-Black neighborhoods in Birmingham, Alabama. The complaint asserts that from 2018 to 2020, the company concentrated its offices in predominantly white areas and directed less than 3% of its direct mail marketing to Black neighborhoods. Loan applications from Black and Hispanic neighborhoods were significantly lower than peer institutions. The company denies the allegations. If the proposed consent order is approved, the company will pay a $1.9 million penalty and commit $7 million to a loan subsidy program for affected communities. Additional investments include $1 million for a new office in a majority-Black neighborhood, $500,000 for advertising and outreach, and $500,000 for financial education and community partnerships. Lenders are reminded that their activities should not be biased or discriminatory, have procedures in writing, review regularly and follow.  

On Wednesday, we shared an update from the Eighth Circuit. It vacated a summary judgment ruling for the defense in Hekel v. Hunter Warfield, Inc., an FDCPA case. The plaintiff alleged improper utility fees, lack of verification in a collection letter, and incorrect interest rates. Despite both parties arguing on the merits, the court found the plaintiff lacked standing, dismissing claims of statutory injury, emotional distress, and monetary loss as unsubstantiated. The case was remanded with instructions to dismiss due to the district court’s lack of subject matter jurisdiction. 

Finally, we published an analysis of the CFPB’s Advisory Opinion under Regulation F regarding medical debt collection, effective December 3, 2024. The opinion outlines unlawful practices, such as collecting debts already paid, collecting amounts not owed due to legal restrictions, and misrepresenting legal obligations. Although debt collectors may think they already comply, the opinion’s complexity requires them to reassess their procedures and client relationships. Debt collectors must now verify that debts are accurate, even when consumers make payments directly to providers or when insurance is involved. The rule stresses the need to follow federal laws like the No Surprises Act, which limits charges in certain scenarios. Collectors will also need to work closely with healthcare providers to ensure compliance with state and federal laws, requiring new policies and audits to navigate these complexities. 

As always, we thank you for reading the weekly recap to stay on top of this ever-changing industry! For a breakdown of the week of October 14th, click here.   

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