The Consumer Financial Protection Bureau (CFPB) today announced that it is ordering GE Capital Retail Bank, now known as Synchrony Bank, to provide an estimated $225 million in relief to consumers harmed by illegal and discriminatory credit card practices. The CFPB said it is the federal government’s largest credit card discrimination settlement in history.
The CFPB and attorneys general in 49 states and the District of Columbia filed a proposed federal court order requiring SunTrust Mortgage, Inc. to provide $500 million in loss-mitigation relief to underwater borrowers. The order also requires SunTrust to pay $40 million to approximately 48,000 consumers who lost their homes to foreclosure and $10 million to the federal government.
The bank official at the center of yesterday’s bribery charges against a debt buyer just happens to be the same executive who late last year pled guilty to accepting bribes from another ARM company. So what’s going on here? Is bribery an unspoken part of the debt collection industry, or did a single corrupt bank officer lure a couple of bad actors into his web?
The owner of a debt buying operation in Florida was arrested by federal officials and charged for his role in a fraudulent scheme that netted his company some $76 million over five years. Wire fraud, bribing a bank official, money laundering; you name it, it’s in the complaint.
The Federal Reserve said late Friday that U.S. consumers expanded their use of credit cards at the fastest rate in six-and-a-half years.
The Federal Trade Commission has scored another legal victory in its crackdown against deceptive payday lenders with the latest finding from U.S. District Judge Gloria M. Navarro in the case against AMG Services. Last year, the FTC won a victory against the lender in a case involving debt collection practices.
Buried in the FTC’s announced settlement with an auto lender last week over debt collection practices was a seemingly new set of standards for debt collectors. The directives addressing FCRA and debt collection compliance suggest regulators are toughening certain standards and, in some cases, creating entirely new standards for certain debt collection activities.
The FTC announced a settlement with a national subprime auto lender and debt buyer/collector that will see the company pay $5.5 million in penalties, refunds, and account adjustments. The charges relate to the firm’s collection practices on its own accounts and loans it was servicing as a third party. Combined with a recent announcement from the CFPB, it could signal increased scrutiny on the auto lending and collection market.
For at least the past two years, we’ve been hearing about the rapid rise in student loan debt in the U.S. By most measures, outstanding student loan balances are surpassed by just one other debt type: mortgages. Americans owe more for attending college than for anything else, except buying a home.
The percentage of Americans with at least one account in the third party debt collection system jumped to 14.3 percent in the first quarter of 2014, according to a report released Tuesday by the Federal Reserve Bank of New York.