Minnesota Gov. Tim Walz recently signed into law HF 4757, the Minnesota Consumer Data Privacy Act, making Minnesota the 18th state to enact a comprehensive consumer data privacy law. The Act will go into effect July 31, 2025.

There were a number of consumer data privacy bills in play during the state’s legislative session that never made it to the finish line. Ultimately, the Act hitched a ride in a bill related to appropriations, cannabis policy, and commerce policy.

Minnesota joins the following states to have enacted privacy laws: California, Virginia, Colorado, Utah, Connecticut, Iowa, Indiana, Tennessee, Montana, Texas, Oregon, Delaware, New Jersey, New Hampshire, Kentucky, Nebraska, and Maryland.

Applicability

The Minnesota Consumer Data Privacy Act applies to legal entities that conduct business in Minnesota or produce products or services that are targeted to residents of Minnesota, and that satisfy one or more of the following thresholds:

1. During a calendar year, controls or processes personal data of 100,000 consumers or more, excluding personal data controlled or processed solely for the purpose of completing a payment transaction; or
2. Derives over 25 percent of gross revenue from the sale of personal data and processes or controls personal data of 25,000 consumers or more.

Exemptions

Exemptions include, but are not limited to:

1. Personal data collected, processed, sold, or disclosed pursuant to the Gramm-Leach-Bliley Act and implementing regulations if the collection, processing, sale, or disclosure is in compliance with that law;
2. Protected health information under the Health Insurance Portability and Accountability Act of 1996;
3. The collection, maintenance, disclosure, sale, communication, or use of any personal information to the extent that such activity is regulated by and authorized under the Fair Credit Reporting Act;
4. Data collected or maintained in the course of an individual acting as a job applicant to or an employee, owner, director, officer, medical staff member, or contractor of a business if the data is collected and used solely within the context of the role.

Consumer Rights

Consumers have the right to:

1. Confirm whether a controller is processing their personal data;
2. Correct inaccurate personal data concerning the consumer, taking into account the nature of the personal data and the purposes of the processing of the personal data;
3. Delete personal data concerning the consumer;
4. Obtain a portable copy of their personal data to the extent technically feasible, in a readily usable format that allows the consumer to transmit the data to another controller without hindrance, where the processing is carried out by automated means;
5. Opt-out of the processing of the personal data for purposes of targeted advertising, the sale of personal data, or profiling in furtherance of decisions that produce legal effects or similarly significant effects concerning the consumer;
6. Question the results of profiling if the personal data is profiled in furtherance of decisions that produce legal effects concerning a consumer or similarly significant effects;
7. Obtain a list of the specific third parties to which the controller has disclosed the consumer’s personal data or, if the controller does not maintain the information in a format specific to the consumer, a list of specific third parties to whom the controller has disclosed any consumers’ personal data.

Sensitive Data

A controller may not process sensitive data concerning a consumer without obtaining the consumer’s consent.

“Sensitive data” is:

1. Personal data revealing racial or ethnic origin, religious beliefs, mental or physical health condition or diagnosis, sexual orientation, or citizenship or immigration status;
2. The processing of biometric data or genetic information for the purpose of uniquely identifying an individual;
3. The personal data of a known child; or
4. Specific geolocation data.

Contract Requirements

A contract between a controller and a processor must clearly set forth instructions for processing data, the nature and purpose of processing, the type of data subject to processing, the duration of processing, and the rights and obligations of both parties. It must also require that the processor:

1. Ensure that each person processing personal data is subject to a duty of confidentiality;
2. Engage a subcontractor only (a) after providing the controller with an opportunity to object, and (b) pursuant to a written contract that requires the subcontractor to meet the obligations of the processor with respect to the personal data;
3. Establish, implement, and maintain reasonable data security practices;
4. Upon request, delete or return all personal data to the controller as requested at the end of the provision of services;
5. Upon request, make available to the controller all information necessary to demonstrate compliance with the Act;
6. Allow for, and contribute to, reasonable assessments and inspections by the controller or the controller’s designated assessor.

Data Protection Assessments

A controller must conduct and document a data privacy and protection assessment for each of the following processing activities involving personal data:

1. The processing of personal data for purposes of targeted advertising;
2. The sale of personal data;
3. The processing of sensitive data;
4. Any processing activities involving personal data that present a heightened risk of harm to consumers; and
5. The processing of personal data for purposes of certain profiling.

Enforcement

The Attorney General has exclusive authority to enforce the Act and may seek a civil penalty of not more than $7,500 per violation. The Act provides a 30-day cure provision that expires Jan. 31, 2026.

MauriceWutscher’s Impression

While similar in many respects to some of the post-California comprehensive data privacy laws, the Act ventures farther in some respects, including providing consumers the right to question the results of profiling and to obtain a list of the specific third parties with whom the controller disclosed their personal data. For those aligning compliance with this act with other state laws, careful attention is warranted given the originality of some of the provisions. For a chart comparing the state comprehensive data privacy acts, and more information and insight from Maurice Wutscher on data privacy and security laws and legislation, click here.

On June 4, 2024, the Consumer Financial Protection Bureau (“CFPB”) issued a Consumer Financial Protection Circular 2024-03 (“Circular”) warning that the use of unlawful or unenforceable terms and conditions in contracts for consumer financial products or services may violate the prohibition on deceptive acts or practices in the Consumer Financial Protection Act (“CFPA”). In a related press release, CFPB Director Rohit Chopra said, “Federal and state laws ban a host of coercive contract clauses that censor and restrict individual freedoms and rights. The CFPB will take action against companies and individuals that deceptively slip these terms into their fine print.”

Under the CFPA, a representation, omission, act or practice is deceptive when:

1. The representation, omission, act, or practice misleads or is likely to mislead the consumer;
2. The consumer’s interpretation of the representation, omission, act, or practice is reasonable under the circumstances; and
3. The misleading representation, omission, act, or practice is material.

In referencing their Bulletin 2022-05 on consumer reviews, the CFPB highlights that many federal laws invalidate contract terms and conditions that require consumers to waive consumer protections provided under federal law, such as TILA, EFTA, MLA, SCRA. The Circular states that covered persons may violate CFPA by including “unenforceable material terms” and such misleading practice cannot be cured by including a provision like “except where unenforceable” because consumer are misled into believing that a material contract provision is lawful and enforceable when they are not. The CFPB concluded that:

“[C]onsumers are unlikely to be aware of the existence of laws that render the terms or conditions at issue unlawful or unenforceable, so in the event of a dispute, they are likely to conclude they lawfully agreed to waive their legal rights or protections after reviewing the contract on their own or when covered persons point out the existence of these contractual terms and conditions. Deceptive acts and practices such as these pose risk to consumers, whose rights are undermined as a result, and distort markets to the disadvantage of covered persons who abide by the law by including only lawful terms and conditions in their consumer contracts.”

The Circular states that CFPB supervisory examiners have identified violations of the CFPA’s prohibition on deception stemming from covered persons’ use of unlawful or unenforceable contract terms and conditions that claim to limit consumer rights and protections afforded by federal or state law. The CFPB provided examples related to limiting the right to contest garnishments, creating the misimpression that consumers could not exercise bankruptcy protection rights, waivers of the right to retain counsel, and misrepresenting consumer protections available under laws.

In March 2024, the CFPB issued a circular addressing deceptive marketing practices for remittance transfers. In the prior circular, the CFPB addressed concerns with the use of fine print to hide promotional conditions and marketing “free” services. While the CFPB uses “fine print” in its headline, fine print is generally used to describe an agreement where some text is printed in a much smaller font size to obscure important terms or where, similar to the March circular, the prominent marketing text does not include the material conditions and limitations of the product or service, which are instead disclosed in much smaller text in a footnote or below the scroll on the webpage. Despite this misnomer, we suspect the CFPB is addressing consumer protections, liabilities, and waivers that are included in account and loan agreements. These agreements are commonly several pages in length but generally use one font size throughout (usually 9 point or greater) and use bold or ALL CAPS fonts for provisions that may be of special importance to consumers (such as liability, waiver of jury trial, or arbitration provisions).

We recommend that companies review their consumer financial products and services contracts to identify and modify any contract terms that may violate the CFPA’s prohibition on deceptive acts and practices. Note that the CFPB will hold a company liable for misleading and unenforceable contract terms even if the terms are provided by one of the industry’s contract form providers or commonly found in industry contracts. Our attorneys are experienced in reviewing consumer contracts and can help companies mitigate any potential UDAAP concerns.

It is often not an easy task to identify contract terms that violate federal or state laws. Many companies have sought to protect themselves by using prefatory language such as “except where prohibited by law” in situations where the law is unclear as to whether a contract provision is lawful or where the company is using a contract in several states and the contract provision is unlawful in one or more states but not in all states in which the company does business. As stated above, the CFPB will consider such prefatory language to be deceptive. Companies must carefully scrutinize all consumer contracts to identify contract provisions that expressly or implicitly waive consumer rights or increase consumer obligations above what the law may allow, research the legality of such contract provisions, and excise provisions that violate and even arguably violate federal or state law. This is by no means a simple project. Companies will need to engage counsel experienced in consumer financial services law to do that work.

Although some have questioned whether the issuance of this Circular one day after the release of the final rule for the Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders may mean that the CFPB has decided to abandon finalizing the proposed registry of form contracts used by certain non-banks, we believe that the CFPB has not abandoned the registry. In the proposal for the registry, the CFPB included the following contract terms, some of which may not be covered by the Circular because they are lawful:

• Precluding the consumer from bringing a legal action after a certain period of time;
• Specifying a forum or venue where a consumer must bring a legal action in court;
• Limiting the ability of the consumer to file a legal action seeking relief for other consumers or to seek to participate in a legal action filed by others;
• Limiting liability to the consumer in a legal action including by capping the amount of recovery or type of remedy;
• Waiving a cause of legal action by the consumer, including by stating a person is not responsible to the consumer for a harm or violation of law;
• Limiting the ability of the consumer to make any written, oral, or pictorial review, assessment, complaint, or other similar analysis or statement concerning the offering provision of consumer financial products or services by the supervised registrant;
• Waiving, whether by extinguishing or causing the consumer to relinquish or agree not to assert, any other identified consumer legal protection, including any specified right, defense, or protection afforded to the consumer under Constitutional law, a statute or regulation, or common law; and
• Requiring that a consumer bring any type of legal action in arbitration.

Here at insideARM we aim to do the hard work for you! Scouring the internet for ARM Industry news and narrowing it down to the 3 biggest stories. The first week of June brought us a breakdown of the CFPB’s activity in May, the most recent CFPB action, and some credit card data from the Federal Reserve. So, sit back, relax, and read on for our recap of last week’s news and why you need to know about it!

On Tuesday, we highlighted an analysis of Q1 data from the Federal Reserve on credit card charge-offs and delinquencies. The 2024 numbers from the first quarter still indicate an increase in charge-offs but the curve is flattening out. The delinquency rate data tells a similar story of an increase but one that might indicate a peak in the near future. This is the kind of information that can allow you and your business to plan for what is coming. With an estimated 9-12 months between charge-off and litigation, this data can help collectors know when to expect an increase in volume.

Wednesday, we brought you the CFPB Bites for the month of May. Last month was a busy one for the CFPB. This included a collaboration with the Federal Reserve Board regarding inflation-adjusted dollars, data and reports on everything from overdraft revenue to credit reporting medical debt, a renewed attack on “junk fees” in mortgage servicing, and a number of actions against student loan servicers, a for-profit school, and a fintech company. It is easier to keep up with the big stories but, tracking the smaller actions of the CFPB is essential to working within the ARM industry. This is where you find the clues to where they are focusing enforcement and what issues they may take aim at next. And they are not subtle. If the CFPB says they are taking a look at something, they already have and likely drafted a rule.

We finished the week on Thursday with another CFPB bombshell. In a near 500-page document, the CFPB issued a final rule on the registration of enforcement orders. The rule requires most “covered persons” under the Dodd-Frank act to register with the CFPB any public orders that stem from an action brought by a federal agency. This will include any relevant orders as far back as January 1, 2017. Bottomline: This is a big deal. It creates a new hurdle for compliance, threatens to shame those who have faced government enforcement actions, and could be an indication that aggressive CFPB enforcement is on the horizon.

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 May 27th, click here.

Have a question about how your company should react to the news above? We have a group for that! The weekly peer call hosted by insideARM’s Research Assistant is the perfect place to ask a question and get advice from industry colleagues who are facing the same challenges you are. Not sure if it is for you? Try it on for size with our 1-month free trial. Click here to learn more!

On June 3, the Consumer Financial Protection Bureau (CFPB or Bureau) issued its final rule requiring covered nonbanks to register enforcement orders, and it is a doozy. Not only will covered nonbanks be required to register public orders issued by agencies and courts with the CFPB, but they will have to go back to 2017. And not only will the CFPB publish the orders, but a large subgroup will have to certify on a yearly basis their full compliance with the orders or make a self-disclosure to the CFPB of any compliance failures. This rule has obvious major consequences for any covered person caught in its web, making the exact ambit of the rule crucial. Given the final rule clocks in at a whopping 486 pages, this post will attempt to provide a roadmap through the rule, focusing on what is required and who is covered.

Who is Covered

The final rule applies to certain nonbanks that are “covered persons” under the Dodd-Frank Act. Covered persons generally participate in offering or providing consumer financial products or services. However, the rule does not apply to insured depository institutions or insured credit unions, persons who are covered solely due to being a “related person” under the Dodd-Frank Act, states including federally recognized Indian tribes, natural persons, certain motor vehicle dealers, and persons that qualify as a covered person under the Dodd-Frank Act only because of conduct excluded from the CFPB’s rulemaking authority.

What Orders are Covered

An order is covered by the final rule if it is a final, public order issued by an agency or court, identifies a covered nonbank by name as a party subject to the order, was issued at least in part in any action or proceeding brought by any federal agency, state agency, or local agency, contains public provisions that impose obligations on the covered nonbank to take certain actions or to refrain from taking certain actions, imposes obligations on the covered nonbank based on an alleged violation of a covered law, and has an effective date on or after January 1, 2017.

Registration Requirements

The registration requirements apply to covered orders that remain in effect on September 16, 2024, or have an effective date on or after that date. The final rule requires covered nonbanks with covered orders to register and submit information to the CFPB’s Nonbank Registry regarding themselves and the covered order. The CFPB will publish filing instructions detailing the information that must be submitted, including the formats required. Generally, along with providing identifying information about the entity itself, including legal name and place of business, the covered entity will be required to submit a fully executed and complete copy of the covered order.

Written Statements

The final rule imposes additional requirements on covered nonbanks that are subject to CFPB supervision and have at least $5 million in qualifying annual receipts. On an annual basis, CFPB-supervised covered nonbanks must review and submit, as applicable, certain additional information regarding covered orders with an effective date on or after the beginning of their applicable implementation submission period. Specifically, the CFPB-supervised covered nonbank is required to designate an executive to: 1) describe the steps taken to review and oversee the covered nonbank’s activities subject to the order during the preceding calendar year, and 2) attest whether during the preceding calendar year the covered nonbank identified any violations or noncompliance with any applicable obligations imposed in the order’s public provisions.

Optional Alternative Registration Requirements for NMLS-Published Covered Orders

The final rule provides a one-time, alternative registration option for covered orders that are published on the Nationwide Multistate Licensing System (NMLS) Consumer Access website.

Submission Periods

The final rule requires CFPB-supervised covered nonbanks to submit the required information annually on or before March 31 of each year. For larger participant CFPB-supervised covered nonbanks that register by December 31, 2024, the first written statement submission is required by March 31, 2025, and will cover all applicable covered orders registered with an effective date from October 16, 2024 to December 31, 2024. For other CFPB-supervised covered nonbanks, the first written statement submission is required on March 31, 2026, and will cover all applicable covered orders registered with an effective date on or after the beginning of their implementation submission period, January 14, 2025 to December 31, 2025.

Registration Requirements Termination

Ongoing registration requirements apply until the covered order is deemed to expire or all relevant provisions are fully terminated. A covered order may be terminated by an agency or court or may terminate under its own terms. A covered order that does not expressly provide for a termination date and is not terminated earlier is deemed to expire 10 years after its effective date. The final rule requires the covered nonbank to file a notice with the CFPB within 90 days of any modification, termination, or abrogation of the order.

Troutman’s Take

The CFPB’s final rule represents a significant regulatory development for nonbank entities. It is crucial for these entities to understand the requirements of the rule and ensure compliance. The CFPB may publish certain information about registered covered nonbanks and covered orders on its website, and noncompliance could lead to significant reputational and regulatory risks. Significantly, according to the press release announcing the issuance of the final rule, the CFPB has established a Repeat Offender Unit responsible for oversight of supervised entities subject to CFPB law enforcement orders. According to the Bureau, the “Repeat Offenders Unit is actively ensuring that a company, its senior management, and its board of directors are not treating any orders as suggestions.”

LOCKPORT, N.Y. — Spire Recovery Solutions, founded by U.S. Military Veterans Jacob Torriere and Joseph Torriere, is proud to serve both its local and national communities. Over the first half of 2024, Spire has donated to four unique organizations dedicated to improving the lives of children, service members, veterans, and more. 

In January, Spire donated to Semper K9 Assistance Dogs, an organization that shelters and trains service dogs at no cost for disabled service members. In February, Spire donated to the United Service Organization (USO), a dedicated support system for the men and women in the U.S. military, and their families, throughout their time in uniform. In April, Spire reached out to its local community by supporting and sponsoring a local youth soccer team, the Niagara Pal Soccer Club. And finally, in May, Spire donated to the Fisher House Foundation, an organization where military and veteran families can stay free of charge while a loved one is in the hospital. 

Semper K9 Assistance Dogs

Semper K9 Assistance Dogs rescues dogs and trains them to become service animals for wounded veterans, providing essential support and companionship. Semper K9 currently has over 125 volunteers that work tirelessly to ensure disabled veterans have access to well-trained and supportive service animals. In a recent move to expand their assistance to veterans, Semper K9 has also purchased 33 acres of land adjacent to Marine Corps Base where they plan to build a retreat-style facility for out-of-area veterans and their families to come and train with their service dogs.

By contributing to Semper K9, Spire Recovery Solutions helps ensure that veterans receive the specialized assistance they need to navigate daily challenges, enhancing their quality of life and fostering greater independence.

The USO

The USO provides a wide range of programs and services to active-duty military personnel and their families, from entertainment tours to transition programs. Since 1941, the USO has been the nation’s leading organization to serve the men and women in the U.S. military, and their families, throughout their time in uniform. From the moment they join, through their assignments and deployments, and as they transition back to their communities, the USO is always by their side.

USO operates at or near military installations across the United States and throughout the world, including in combat zones, and even un-staffed USO service sites in places too dangerous for anyone but combat troops to occupy. With 250 locations across the globe and over 20,000 annual volunteers, the USO is one of the largest community-led organizations in the world. 

Niagara Pal Soccer Club

Locally, Spire Recovery Solutions is making a direct impact by sponsoring the Niagara Pal Soccer Club. This youth soccer organization offers children and teenagers the opportunity to engage in sports, develop their skills, and learn valuable life lessons through teamwork and discipline. 

This donation reflects the Spire leadership team’s desire to not only support the local community but its members. The Niagara Pal Soccer Club is home to several of the Spire team’s children and plays an important role in the community for those looking to stay active, involved, and supportive. 

Fisher House Foundation

Further extending its support to military families, Spire Recovery Solutions has donated to the Fisher House Foundation. Fisher House provides free, temporary lodging for families of patients receiving medical care at major military and VA medical centers. This service alleviates the financial burden and stress of finding accommodations during medical emergencies, allowing families to be close to their loved ones during critical times. 

Learn More Online

These initiatives in the first half of 2024 reflect Spire’s overall greater goal of providing a positive experience for consumers through honest and transparent communication. This philosophy drives the organization’s client and consumer efforts and helps support its goals in the community. To learn more about Spire’s community outreach, or to learn more about the organization as a whole, please visit its website at spirerecoverysolutions.com. 

About Spire Recovery Solutions

Spire Recovery Solutions, LLC was founded by U.S. Veterans Joseph Torriere and Jacob Torriere. Spire is a professional, nationally licensed full-service debt collection agency that assists creditors in the recovery of outstanding balances while providing consumers with exceptional customer service. Spire Recovery Solutions uses customized processes and state-of-the-art technology to provide transparency and compliance that clients and consumers trust and rely on while working together toward account resolution. As members of RMAI and ACA International, Spire’s team is actively involved in industry events, educational opportunities, and advocacy efforts. 

The CFPB continued with a high level of activity in May. In this month’s article, we share some of our top “bites” of the month to help you stay up to date.

Bite 11: CFPB and Fed. Announce Inflation-Adjusted Dollar Amounts

On May 13, 2024, the CFPB and Federal Reserve Board (“FRB”) jointly announced adjusted dollar amounts relating to the availability of customer funds. The inflation-adjusted changes in Regulation CC include for example the minimum amount of deposited funds that banks must make available for withdrawal for certain check deposits. In 2019, the CFPB and FRB finalized a rule that formally set a method for inflation adjustments which occur every five years. The agencies adjust the dollar thresholds based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The new thresholds are effective from July 1, 2025, for a five-year period.

Bite 10: CFPB Announces Decline in Overdraft Revenue

On April 24, 2024 the CFPB published a data spotlight on overdraft and non-sufficient funds (NSF) fee revenue and practices, analyzing the revenue these fees generated in 2023 and compared it to pre-pandemic levels and 2022. The CFPB reported that annual overdraft/NSF fee revenue has dropped by $6.1 billion since before the pandemic, a reduction of more than half, and claimed that the average household using overdrafts is paying $185 less in fees every year. The data spotlight also found that in 2023, overdraft/NSF fees were approximately $1.8 billion lower than in 2022, a decrease of 24%. Also, the CFPB claimed that financial institutions are generally not increasing other checking account fees to compensate for reduced overdraft/NSF revenue. The CFPB noted that banks appear to have stopped significantly reducing these fees, additional policy changes have slowed, and fee revenue remained flat across all four quarters of 2023 after five straight quarters of declining fees. The CFPB indicated that it will continue to focus on these fees.

Bite 9: CFPB Issues Data on Medical Bills on Credit Reports

On April 29, 2024, the CFPB announced that it issued an updated report on the state of medical collections on consumer credit records. Back in March 2022, the three nationwide credit reporting agencies voluntarily announced that they would no longer report certain medical collections on consumer reports. According to the CFPB’s updated report, as of June 2023, the share of consumers with medical collections on their credit records decreased by approximately 5% and that’s reportedly down from around 14% from March 2022. The collective amount in outstanding medical bills in collections fell from an estimated $88 billion in March 2022 to an estimated $49 billion in June 2023.

Bite 8: CFPB Issues Report on Price Complexity

On April 30, 2024, the CFPB released a report on price complexity.The report addressed the CFPB’s research into how complex pricing options can impact consumer decision making.Participants in the experiments acted as buyers and sellers. The first experiment controlled how complex the sellers were allowed to make their prices, using one single number, up to eight sub-prices, and up to 16 sub-prices. The first experiment found that allowing more complex pricing resulted in buyers choosing a higher-priced offering, leading to higher overall average transaction prices. The second experiment investigated the effects of increased competition on market outcomes and it found that increased competition generally improved pricing, but did not entirely eliminate negative effects of price complexity. Overall, the CFPB found that more complex pricing led to worse outcomes for consumers such as higher sale and transaction prices.

Bite 7: CFPB Publishes Analysis on Health Savings Accounts

On May 1, 2024, the CFPB issued a report addressing the costs associated with health savings accounts (“HSAs”). HSAs are typically deposit accounts used along with high-deductible health insurance plans that provide tax benefits to consumers. The CFPB claimed that many HSAs have low interest rate yields and charge so-called “junk fees” to switch. The report indicated that over the past 10 years, the number of health savings accounts has grown from 11.8 million to 35 million accounts. According to the report, the amount of money in the accounts has grown to more than $116 billion, which is a 500% increase over the past decade. The CFPB’s report noted that many accounts charge various fees, including monthly maintenance fees, paper statement fees, and exit fees like outbound transfer fees and account closure fees. The CFPB’s report claims that most providers offer interest rates that are less than 1%. The CFPB claimed that these high costs and fees can erode any tax savings or benefits of having an HSA. Director Chopra released a related statement warning that the CFPB is “closely policing the intersection of health care and financial products.”

Bite 6: CFPB Issues Report on Credit Card Reward Programs

On May 9, 2024, the CFPB issued a report addressing credit card reward programs noting that that they were the subject of numerous consumer complaints.The CFPB noted that it received over 1,200 complaints involving credit card rewards in 2023, which was more than a 70% increase over pre-pandemic levels. The report identified four themes underlying complaints that consumers did not receive promised rewards. First, consumers complained that the reward programs term and conditions did not match the marketing materials. Second, consumers complained that they lost benefits that they previously earned when providers devalued rewards. Third, consumers complained that they faced obstacles in receiving their preferred redemptions when companies failed to quickly resolve rewards-related issues. Fourth, consumers complained that they suddenly lost rewards when issuers unilaterally revoked previously earned balances.

Bite 5: CFPB Issues New Spring 2024 Supervisory Highlights

On April 24, 2024, the CFPB released its newest issue of the Supervisory Highlights. This issue focused on mortgage servicing. The CFPB’s examiners indicated supervised mortgage servicers were charging illegal so-called “junk fees” among other violations, and that because homeowners cannot switch their mortgage service providers, the CFPB takes extra care to detect and deter violations of law. According to the CFPB, some servicers illegally charged or obscured prohibited fees, and charged homeowners fees during the pandemic that servicers should have waived. In addition, some servicers missed deadlines to pay property tax and home insurance, leading some borrowers to incur penalties. The CFPB also noted that some servicers deceived homeowners about their repayment options or the status of their accounts. In response to these findings, the CFPB indicated that mortgage servicers are taking corrective actions, including making changes to their practices and providing remediation for fee-related violations.

Bite 4: CFPB Loses Appeal to Move Credit Card Fee Case

On May 10, 2024 media outlets reported that Judge Pittman in the Northern District of Texas issued a preliminary injunction, ruling against the CFPB in the ongoing credit card fee litigation, staying the rulemaking indefinitely. Back in March of 2024, several organizations filed a lawsuit in the U.S. District Court for the Northern District of Texas challenging the CFPB’s credit card late fee rule. The plaintiffs claimed that the new rule capping credit card late fees punishes customers who pay on time. The plaintiffs also asked the court to enjoin the CFPB from implementing the Final Rule which was granted. The CFPB argued that the venue in the Northern District of Texas is improper and asserted that the case should be moved to the U.S. District Court for the District of Columbia. The district court granted the CFPB’s motion and ordered that the case be transferred to the U.S. District Court for the District of Columbia. On May 3, 2024, the Fifth Circuit denied the CFPB’s petition reasoning that transferring the case while an appealable order was pending altered the status of the case as it rests before the Court of Appeals and therefore, the district court lacked jurisdiction to transfer the case.

Bite 3: CFPB Takes Action Against Coding Boot Camp & CEO

On April 17, 2024, the CFPB announced an action against a coding boot camp and its CEO, claiming the for profit school made false claims about job placement rates and the cost of “loans.” The CFPB claims the school told students that the income share agreements they offered were not loans and that 86% of graduates received job offers. But, according to the CFPB, the income share agreements were loans and job placement rates ranged from 30-50%. The CFPB also alleges that the school failed to include a Holder Rule notice in its agreements that would’ve subjected the contract holder to claims the students had against the school. According to the CFPB, the school violated the federal ban on unfair, deceptive, or abusive acts or practices by using deceptive statements and taking unreasonable advantage of the students’ reasonable reliance on the school to act in their interests. The school will pay $64,000 and the CEO will pay $100,000 to the CFPB’s civil relief fund. In addition, the school must cease accepting certain payments and allow students to withdraw without penalty, and the order will amend the terms of the income share agreements.

Bite 2: CFPB Takes Action Against Student Loan Securitization Company and Servicer

On May 6, 2024, the CFPB announced that it issued an order against a student loan securitization company and servicer for allegedly failing to respond to borrowers seeking relief during the COVID-19 national emergency. The CFPB alleged that the companies violated the CFPA by failing to respond to borrowers’ requests for information, failing to provide accurate information to borrowers, and incorrectly denying forbearance requests. The CFPB previously filed an enforcement action against the securitization company for allegedly bringing improper debt collection lawsuits for private student loan debt. The U.S. Court of Appeals for the Third Circuit ruled in March 2024 that the company is a covered person under the CFPA, and the case remains pending in federal court. The securitization company agreed to pay a $400,000 penalty and the servicer will pay a $1.75 million penalty. These penalties include the distribution of payments to borrowers who allegedly did not receive timely receive timely responses from the companies totaling nearly $3 million in redress.

Bite 1: CFPB Takes Action Against Fintech Company

On May 7, 2024, the CFPB announced an action claiming a fintech company withheld account closure refunds from consumers. The fintech company offers checking and savings accounts to consumers that are held by FDIC-insured partner banks. The CFPB issued an order against the fintech company for allegedly withholding account-closure refunds to its consumers beyond the 14-day window established in the company’s agreements with account holders. The CFPB claimed that the alleged delays constituted an unfair act under the CFPA. Under the order, the fintech company will: pay $1.3 million in consumer redress to harmed consumers; pay a $3.25 million penalty into the civil relief fund; cease certain practices; and improve post-closure refund procedures.

Extra Bite: CFPB Employees Got the Largest Raises in CFPB History

On May 8, it was reported that the CFPB’s labor union voted to ratify a pay agreement with CFPB leadership that governs bargaining unit employee compensation for the next three years (90.41% voted yes; 9.59% voted no). According to the labor union, CFPB employees “are getting the largest raises in the Bureau’s history.” As soon as administratively feasible in 2024, employees will get an increase in base pay of 5% – an increase to be completed within 4 months; plus, a bonus of 3% of their salary, plus $4,500. For 2025, employees will get a 4.8% raise, plus a bonus of 2% of their salary, plus $3,500, plus a 2% pay band adjustment. For 2026, employees will get an estimated 3.6% raise, plus a bonus of 2% of their salary, plus $3,000, plus a 2% pay band adjustment. Eligible employees will also receive an annual $1,000 “health and wellness” cash payment, plus an increased health insurance subsidy of up to $85 per pay period.

Still hungry? Please join Hudson Cook for their next CFPB Bites of the Month. If you missed any of their prior Bites, request a replay here.

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This article is provided for informational purposes and is not intended nor should it be taken as legal advice. The views and opinions expressed in this article are those of the authors in their individual capacity and do not reflect the official policy or position of the partners of Hudson Cook, LLP or clients they represent.

WILMINGTON, Del. — The Estate Registry, an innovation created by Phillips & Cohen Associates, the global leader in deceased account care management and technology solutions, has acquired Settld, the Sunderland-based death notification business designed to create a more consumer focused solution for those tasked with estate administration.

The Estate Registry delivers a fully comprehensive suite of modern technology services, including NotifyNOW, LegacyNOW and InheritNOW to support consumers and organizations that are responsible for managing the process of maintaining and finalizing estate administration work, including lawyers, solicitors, trust and insurance companies, and creditors with both pre and post probate need.

The award-winning NotifyNOW is a pioneering digital platform that streamlines the process of notifying companies about the death of one of their customers. Already operating in the UK, US, Canada and Australia, NotifyNOW aims to become the centralized service for the bereaved and their representatives to efficiently inform all relevant organizations of an individual’s death.

The acquisition of Settld, one of the top 25 of Britain’s 100 best start-ups, will accelerate this ambition. Settld, founded in 2020, specializes in simplifying bereavement administration and mirrors The Estate Registry’s customer led focus. By coupling NotifyNOW and Settld together, The Estate Registry will create the preeminent private sector solution for death notifications in the UK.

Adam Cohen, Executive Chairman of The Estate Registry, says that The Estate Registry and Settld share the same compassionate focus: “We are both committed to making the bereavement process easier and more streamlined for the bereaved and the professionals who support them,” he explains. 

“Notification is critical, but it is the beginning and not the end of the process,” he continues. “By integrating our two platforms, we offer an even greater notification solution, while providing a suite of critical products and services to our customers and partners.”

Settld Co-Founder and CEO, Vicky Wilson, says Settld will be more effective as part of a much wider group: “My mission has always been to make the bereavement process easier and less stressful, during what can be an incredibly emotional and challenging time. With the force of The Estate Registry behind us, and working with a compassionate and like-minded team, we can continue to grow and reach more people, not only in the UK but also internationally in a way that would not have been possible on our own.”

Vicky will stay with the business and join the global executive leadership team of The Estate Registry. Settld’s team of full-time employees will also transfer to The Estate Registry.

Credit card charge-offs and credit card loan delinquencies continue to be at a 12-year high, according to the Federal Reserve’s first-quarter report. There are clues in the FED’s quarterly data indicating future account volume. 

First quarter 2024 data reveals that credit card charge-offs increased from 4.01% to 4.20%. The recent quarter’s curve may be flattening out, but it is still growing at a rate that does not appear to be topping out as of yet.

Credit card loan delinquencies, an early indicator of charge-offs, increased from 2.95% to 3.01%. For the second consecutive quarter, the curve is flattening, which suggests that we are approaching a period of more gradual increases or possibly peaking.

In ProVest’s experience, there is generally a 9-12-month lag from when the charge-offs occur before our litigation clients see the volume. Considering that both charge-offs and delinquencies have continued to increase, it suggests a surging volume well into 2025. It’s important to ensure you have the capacity to handle and process the ever-increasing volume. 

The Federal Reserve’s charts for the data referenced follow and are linked. 

 Charge-off Rate on Credit Card Loans

Delinquency Rate on Credit Card Loans

MENLO PARK, Calif — Latitude by Genesys announced a significant donation to Dogs Inc (formerly Southeastern Guide Dogs Inc), reinforcing their commitment to supporting organizations that provide essential services to those in need. The contribution comes at a crucial time when the demand for guide dogs and related services is on the rise, highlighting the importance of collective support from the community. 

This donation was inspired by one of Latitude’s long-standing industry friends, Jack Brown. Jack Brown, President of Gulf Coast Collection Bureau, Inc., is a recipient of one of the animals. Mr. Brown’s lab, Leo, was one of the few animals who had left the program for being too outgoing, leading to Leo’s adoption. 

“Latitude by Genesys is proud to support Dogs Inc and their invaluable mission,” said Cris Bjelajac, Senior Director of Business Operations at Latitude. “We recognize the tremendous impact these guide dogs and services have on the lives of visually impaired individuals, veterans, and children. Our commitment to supporting this organization is about giving back to the community and making a meaningful difference in the lives of those who rely on these incredible animals.”

Transforming Lives

Dogs Inc is a nonprofit organization dedicated to providing guide dogs and other life-changing services to individuals with vision loss, veterans with disabilities, and children with significant challenges. Through their specialized training programs, they empower visually impaired individuals to lead independent and fulfilling lives, enhancing their mobility and confidence.

“Dogs Inc transforms lives by creating and nurturing extraordinary partnerships between people and dogs, throughout the United States. A nonprofit with a national reach, we train dogs of the highest pedigree for people who are blind and for veterans, providing our premier dogs and lifetime services at no cost, without government funds. We’ve matched more than 3,100 guide and service dog teams since our 1982 inception, and currently have over 1,000 dogs under our auspices,” the organization says on their website. 

Supporting Communities

Latitude makes a concerted effort every quarter to underscore the importance of corporate social responsibility and the profound impact it can have on society. By supporting organizations like Dogs Inc, companies not only fulfill their duty to the community but also contribute to the greater good, enriching the lives of individuals and families in need.

As Latitude continues its journey of giving back to the community, its donation with Dogs Inc will most assuredly help those who rely on the guidance and companionship of these remarkable animals.

Learn More Online

To learn more about Dogs Inc and their impactful work in empowering individuals with vision loss, veterans with disabilities, and children facing significant challenges, visit their website at dogsinc.org.

For more information about Latitude by Genesys and their commitment to supporting nonprofits and making a positive impact in communities, visit their website at www.genesys.com/collateral/latitude-by-genesys.

About Latitude by Genesys

Latitude by Genesys® is a comprehensive debt collection and recovery solution for managing all receivables processes. It provides collectors with the tools to manage the collection and recovery process. Latitude deploys a true zero-footprint, browser-based environment for collectors and agents. Since 1996, Latitude’s focus has been to provide forward-thinking, attractive solutions to the business needs of different people and companies in the accounts receivable management (ARM) space. Acquired by Genesys in 2016, Latitude is continually growing, innovating, and reshaping ARM companies’ and their consumers’ technology expectations and customer experiences.

A short week was still not short on news affecting debt collection! In our efforts to bring you the information you need to see, we found the most important pieces of news from around the industry. Last week this came in the form of state law updates from Tennessee and Arizona, as well as a recent court case out of Texas. Keep on reading for highlights of what you need to know and why our editorial team thinks you need to know it!

On Wednesday, we focused on two state law updates: 

• First, we brought you Tennessee’s amendment to its Consumer Protection Act. The amendment added factors that a court may consider when determining the penalty for violating the statute, including the use of a complaint resolution process, prior restitution efforts, injury to the public, the public’s overall interest, and the state’s interest regarding the violation. The amendment extended the act’s protection for the elderly (over 60) to those under 18 and military service members. To avoid hefty fines, those working with consumers in Tennessee should review their policies and procedures to reconfirm they are complying with the Act.

• The Second state law update came out of the Arizona Court of Appeals. The case involved a challenge of Arizona’s Predatory Debt Collection Act, which changed both the interest rate cap on medical debt and garnishment exemptions. The suit argued that vague language rendered the act unconstitutional. The appeals court disagreed and upheld the act’s constitutionality. The Predatory Debt Collection Act will have a major effect on those collecting medical debt or post-judgment debt in Arizona and should be considered in any future placements or purchases of Arizona accounts.

Thursday, we brought you information about a Texas district court case. In Marks v. Javitch Block LLC, a consumer stated in a request for verification that it was only convenient for them to be contacted by email. When the collector’s response came through the USPS, the consumer filed an FDCPA suit. The Court found that, while a consumer can limit the time and place of a communication, the FDCPA does not permit them to opt out of conventional mail because that is a mode of communication. This decision is a win for collectors who can still feel confident sending physical mail despite a consumer’s preference but, it should also serve as a reminder of the potential traps in consumer communications as this type of preference language is becoming a common occurrence.

Thank you once again for coming to us to catch up on the latest in ARM industry news! Find a recap for the week of May 20th here.

You’ve got the news, so what do you do now? insideARM’s Research Assistant hosts a weekly peer call where members discuss recent news, submit questions, and offer advice about legal, operations, and everything in between! Click here to learn more and take advantage of our 1-month free trial.