News
U.S. Supreme Court Overturns $1.3 Billion Award Against Kansas Payday Loan Operator
A unanimous Supreme Court on Thursday cut back the Federal Trade Commission’s authority to recover ill-gotten gains, overturning a nearly $1.3 billion award against a professional race car driver who was convicted of cheating consumers through his payday loan businesses. The high court’s ruling takes away what the FTC has called “one of its most important and effective enforcement tools,” used in recouping billions of dollars over the past decade. Justice Stephen Breyer wrote in his opinion for the court that the provision of federal law that the FTC has relied on does not authorize the commission to seek or…
Older Americans Dealing with Rising Debt, Falling Income Amid Pandemic
According to the Employee Benefit Research Institute, the share of households headed by someone 55 or older with debt — from credit cards, mortgages, medical bills and student loans — increased to 68.4 percent in 2019, from 53.8 percent in 1992. Bankruptcy rates among older adults are also rising. The COVID-19 pandemic may be adding to their woes, the New York Times reported. A survey at the end of 2020 by Clever, an online service that connects home buyers and sellers with real estate agents, found that on average, retirees had doubled their non-mortgage debt in 2020 — to $19,200.…
The $50 Billion Race to Save America’s Renters from Eviction (While Violating Rights of America’s Landlords)
The Biden administration again extended a federal moratorium on evictions last week, but conflicting court rulings on whether the ban is legal, plus the difficulty of rolling out nearly $50 billion in federal aid, mean the country’s reckoning with its eviction crisis may come sooner than expected, the Washington Post reported. The year-old federal moratorium — which has now been extended through June 30 — has probably kept hundreds of thousands or millions of people from being evicted from their apartments and homes. More than 10 million Americans are behind on rent, according to Moody’s, easily topping the 7 million…
CFPB Proposes Delaying Implementation of Debt-Collection Rules
The Consumer Financial Protection Bureau yesterday proposed postponing the implementation of two new Fair Debt Collection Practices Act rules governing borrower communication, which currently have a Nov. 30 start date, the American Banker reported. One rule delineates what constitutes harassment, false representation and unfair practices by debt collectors. The other clarifies the disclosures collectors must provide to consumers regarding communication with credit-reporting agencies and prohibits collectors from threatening to sue borrowers with time-barred debt. The delay would mean that third-party mortgage-servicing entities and others governed by the FDCPA will not be able to use the new safe harbors for compliance…
Consumer Protection Financial Bureau (“CFPB”) Proposes To Stop Foreclosures Through The End Of 2021
Saying that the pandemic has caused a “shocking increase in housing uncertainty,” the CFPB proposed Monday, 4/6/21, to stop mortgage servicers from foreclosing on most home loans until after the end of 2021. The plan outlined by the agency is an attempt to give borrowers time to find ways to make payments once pandemic relief ends. “We are going to use everything in our toolbox to prevent avoidable foreclosures,” Acting CFPB Director Dave Uejio told reporters in a telephone conference call. “This rule is one of the sharpest tools in our toolbox.” He said the agency wants “to ensure that…
A US District Court Rules that the Consumer Financial Protection Bureau (“CFPB”) Lacked Authority To Bring Suit While Its Structure Was Unconstitutional
On March 26, the U.S. District Court for the District of Delaware dismissed a 2017 lawsuit filed by the CFPB against a collection of Delaware statutory trusts and their debt collector, ruling that the Bureau lacked enforcement authority to bring the action when its structure was unconstitutional. As previously covered by InfoBytes, the Bureau alleged the defendants filed lawsuits against consumers for private student loan debt that they could not prove was owed or that was outside the applicable statute of limitations, which allowed them to obtain over $21.7 million in judgments against consumers and collect an estimated $3.5 million…
On 3/29/21, President Biden extended the National Eviction Moratorium through June 2021
On 3/29/21, President Biden extended the National Eviction Moratorium through June 2021. However, United States Courts are split on whether it is legal for the government to prohibit landlords from evicting tenants who fail to pay the landlords rent that the tenants owe the landlords, without the government paying that rent to the landlords. The legal argument is that the right of landlords to collect rent, per leases, is a property right, which cannot be taken away from landlords by the government, without the government paying the landlords for taking away the landlords’ right to evict nonpaying tenants, as allowed…
The Us Consumer Financial Protection Bureau (“CFPB”) Is “Encouraging” Banks and Debt Collectors Not To Take, From Consumers, Toward Paying Debts That Consumers Owe
The US Consumer Financial Protection Bureau (“CFPB”) is “encouraging” banks and debt collectors NOT to take, from consumers, toward paying debts that consumers owe, the $1,400 stimulus payments that the federal government is sending out to consumers, under the newest covid relief law. See below article. However, there is nothing in that newest covid relief law that prevents/prohibits banks and debt collectors from taking those $1,400 payments from consumers. Therefore, the CFBP “encouragement” is unlikely to be effective in keeping banks and debt collectors from taking those $1,400 payments from consumers. March 17, 2021WASHINGTON, D.C. – Consumer Financial Protection Bureau…
Consumer Financial Protection Bureau (“CFPB”) Report: Housing insecurity and the COVID-19 pandemic (3/6/21)
In 2020, those who have fallen behind at least three months on their mortgage increased 250 percent to over 2 million households, and is now at a level not seen since the height of the Great Recession in 2010. Collectively, these households are estimated to owe almost $90 billion in deferred principal, interest, taxes and insurance payments.1 At the same time, we are facing a rental crisis, with over 8 million rental households behind in their rent. While there are significant differences from the last crisis, particularly a more stable mortgage market and substantial homeowner equity, there are a significant…
Unemployment Benefits During the Pandemic
American Bankruptcy Institute on 1/28/21 reports that: Almost 70 million Americans, or about 40% of the labor force, have filed for unemployment benefits during the pandemic. The number of Americans filing for state unemployment benefits edged lower but remained elevated last week, as the labor market struggles to recover from a surge in COVID-19 infections nationwide amid new restrictions to help curb the spread of the virus, FoxBusiness.com reported. Figures released today by the Labor Department showed that 847,000 Americans filed first-time jobless claims in the week ended Jan. 23, slightly lower than the 875,000 forecast by Refinitiv economists. The…