November 2, 2021
Paving the Payments Future
Consumer Financial Protection Bureau (CFPB) Names Key Senior Positions

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today announced leadership changes within the Bureau. The positions being announced today are: Deputy Director; Associate Director for Consumer Education & External Affairs; Chief of Staff; and Chief Technologist.

Zixta Q. Martinez will serve as Deputy Director, and in that role will oversee the Bureau’s Operations Division. Ms. Martinez joined the Bureau in 2010 to help lead the implementation team and has since served as Senior Advisor for Supervision, Enforcement and Fair Lending, Associate Director for External Affairs, and Assistant Director for the Office of Community Affairs. Previously, she was Senior Director of Industry and State Relations at Freddie Mac, Director at the National Fair Housing Alliance, Legislative Staff Attorney at the Mexican American Legal Defense and Education Fund, Inc., Housing Policy Analyst for the National Council of La Raza, and Associate Staffer at the Housing and Community Development Subcommittee of the Banking Finance and Urban Affairs Committee in the U.S. House of Representatives. She is a graduate of Yale College, the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin, and the University of Miami School of Law.

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Opening Statement of Director Rohit Chopra before the House Committee on Financial Services

Chairwoman Waters, Ranking Member McHenry, and Members of the Committee, thank you for holding this hearing today.

2021 is far different than 2020. The economy is reopening and growing. Labor demand is strong, and employers have added millions of new jobs. Household spending has rapidly increased, and demand for housing is robust. While these macro indicators are promising, the recovery has been uneven.

In many individual neighborhoods, conditions remain fragile. Many families continue to struggle to afford their mortgage and rent payments. Many small businesses are facing severe challenges to make ends meet. And, many communities, especially those that have been historically disadvantaged, have not felt much of a recovery.

American families owed $15 trillion as of the end of the second quarter of this year, roughly $800 billion more than at the end of 2019. Over the course of a year, mortgage origination hit historic highs at $4.6 trillion.

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Billions borrowed through paycheck advance apps

RALEIGH, N.C. — When money is tight, a paycheck advance app can help – for a cost.

Terry Patterson downloaded MoneyLion last summer when he needed to make a last-minute trip to see his dad.

He got a $50 advance on his next paycheck.

“When I was able to get that done, I had enough money to at least cover one of the, you know, some gas along the way [and] a couple snacks," said Patterson.

The apps let users request a portion of their next paycheck. There’s usually a fee or subscription cost, which can run between $1 and $10.

1 in 5 Americans has medical debt in collections, study finds. It's worse in the South

Americans spend twice as much on health care as people in other wealthy countries, according to the Organization for Economic Cooperation and Development. For the past two weeks on our series The Price We Pay, we’ve explored what the U.S. government and many businesses have been doing to try to contain those costs.

Today we look at the impact of medical debt. According to a study published in the Journal of the American Medical Association, overall, the amount of medical debt in collections in the U.S. went down between 2009 and 2020. But in the South, it actually increased. Harvard Business School professor Raymond Kluender is one of the authors of the study and he joins us to explain the findings.

Marshall Terry: First, just how common is medical debt in collections in the U.S.?

Raymond Kluender: So, we look at data from credit reports, which means we're only going to see medical debt that's been sent to a third-party debt collector and is reported on credit reports. But we find that 17.8% of individuals in the United States had medical debt in collections as of June 2020, which means that basically 1 in 5 Americans has a medical debt in collections at any given point.

If bosses want workers, they have to actually try

A class of Americans has become lazy and entitled. Too used to a government that caters to their every whim, they're facing a difficult situation not with grit and determination, but by throwing tantrums and demanding special treatment.

That's right, I'm talking about business owners. Complaints about a labor shortage abound, but it's time these coddled snowflakes learned some discipline. Employers need to put in the work to staff their own businesses instead of relying on the government do it for them.

The plain fact is we've had an employer's economy for a decade. After the Great Recession, unemployment was chronically high — only touching something like full employment in 2019, 11 years after the crash. Bosses got used to having the pick of the litter. With so many credentialed people thrown out of work, hiring managers were able to demand extravagant experience and over-qualification for low-level jobs. Many employers came to believe they were owed workers who would take any position and mutely absorb any abuse.

California Laws for Debt Collection, Money Transfer Services, and Consumer Subscription Services Signed by Governor Newsom. by Weiner Brodsky Kider PC

California enacted six new laws in October expanding rights for consumers, including new disclosure and consumer notification requirements for debt collection and subscription services. The new laws apply to subscription services, consumer warranties, money transfer services, and debt collection and settlement services, among others.

The laws expand consumer rights to receive information, including prior notice of renewed subscriptions, rights to verify debt collectors and delinquent debt information, prohibitions on the sale of consumer debt without notice to the debtor, and provide consumers a three-day period to review a debt settlement contract. The laws were signed on October 4, 2021. The summary below describes each law and the key provisions introduced:

Women's business ownership growing; still face different challenges

Oct. 30—Tracy Alaia of Trafford had always dreamed of owning a boutique, but she wanted it to be more than just a shop.

"I wanted it to be helpful to other artists," said Alaia, who initially was going to have a paint studio, but that grew into a gift shop in downtown Irwin.

After developing a business plan she described as "pretty conservative" in terms of taking on debt to operate, she opened Feathers Artist Market & Gifts in downtown Irwin in 2017.

The 49-year-old Alaia is one of more than 13 million women who own businesses in the United States. That's a huge leap from 50 years ago, when there were a little more than 400,000 women-owned businesses, according to the Small Business Administration.

With October recognized as National Women's Small Business Month, the SBA has pointed out that 45% of all businesses in the United States were owned by women in 2019. Those enterprises generated $1.9 trillion in revenue. There were about 1,820 net new female-owned business opening each day across the country.

To Congress
Report of the CFPB Education Loan Ombudsman

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”) this report analyzes complaint data from September 1, 2020, through August 31, 2021, including COVID-19 complaint data, and notes an overall decrease in complaints that is likely attributable the CARES Act relief measures and subsequent administrative extensions through January 31, 2022.

The report notes that the pandemic has exacerbated socio-economic and racial disparities through the student loan and education ecosystems, and that gaps within these systems present heightened risk of borrower harm, particularly to vulnerable populations, and adversely affects student success. The report also notes that heighted risk of borrower harm may occur when CARES Act relief and administrative extensions expire on January 31, 2022, at which time, the return to repayment starts for over 32 million borrowers, the vast majority of whom have not made a payment in over 22 months. Further, four of nine federal student loan servicers have either stopped, or announced that they are will stop, servicing federal loans, and the resulting transfers (over 16 million borrowers) will have heighted risk of borrower harm.

Finally, this report provides Policymakers with recommendations regarding student success, the return to repayment, and servicing transfers.

Post-Barr, Sixth Circuit Says Debt Collectors Can Be Liable. by Manatt, Phelps & Phillips, LLP

Continuing the fallout from the now over-one-year-old decision in Barr v. American Association of Political Consultants, Inc., the U.S. Court of Appeals, Sixth Circuit ruled that the U.S. Constitution displaced the government-backed debt exception from the start, overturning the lower court and leaving government debt collectors open to liability under the automated calling restrictions of the Telephone Consumer Protection Act (TCPA) for calls made between November 2015 and July 2020.

In late 2019 and early 2020, the plaintiff/appellant, Roberta Lindenbaum, allegedly received two autodialed phone calls from the defendant/appellee, Realgy, LLC, advertising its electricity services. She sued under the TCPA, alleging violations of the automated call provisions.

After the Supreme Court decided Barr v. AAPC—striking down a 2015 amendment to the TCPA that added an exemption for government debt collection automated calls—Realgy moved to dismiss the case for lack of subject matter jurisdiction, essentially arguing that the automated call restrictions as a whole were unconstitutional from when the exemption was enacted in November 2015 through July 2020, when Barr was decided.

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