Today's Headlines

    Top Ten Debt Collection Lessons of 2017

    2017 has been a busy year for debt collection, including two debt collection cases before the US Supreme Court, several federal court opinions impacting the TCPA and FCRA, debt collection law changes in several states, a new state opinion in Maryland on vehicle title loans, creative new tactics from the consumer plaintiff’s bar, and, of course, the CFPB debt collection rulemaking. This webinar will highlight the top ten debt collection issues and offer best practice suggestions.

    The presentation will be held on Wednesday, November 9, 2017 at 2:00 p.m. ET and registration is now open.

    This webinar is part of the AFSA Business Partner Webinar series. The webinars are designed to provide information that will allow AFSA members to more effectively design, develop and implement strategies for their companies success. Past recordings and a list of other upcoming webinars can be found in the AFSA Webinar Resource Center. For more information, contact Dan Bucherer, Communications Manager, at dbucherer@afsamail.org.

    President Trump signs legislation overturning CFPB arbitration; AFSA, co-plaintiffs withdraw lawsuit

    President Donald Trump yesterday signed legislation overturning the Consumer Financial Protection Bureau’s mandatory anti-arbitration rule.

    The president’s decision comes just one week after the Senate voted 51-50 to overturn the controversial anti-consumer rule.

    The rule would have banned arbitration clauses in contracts, making it easier for customers of companies in the financial services industry to sue those companies to settle disputes. But the CFPB’s own research showed that consumers resolved disputes faster and on average received larger settlement amounts versus class action lawsuits.

    The American Financial Services Association (AFSA), along with 17 other trade associations representing financial and non-financial businesses, filed suit in Federal District Court in Dallas on September 29 seeking a judgment invalidating the rule on constitutional and statutory grounds.

    As a result of the Senate vote on legislation to repeal the rule and the president signing the legislation, the lawsuit was withdrawn today by AFSA and the other co-plaintiffs.

    AFSA examines state-level consumer complaint databases

    AFSA’s State Government Affairs (SGA) November white paper focuses on consumer complaints. The paper examines state-level reporting of consumer complaints by attorneys general and state regulators and looks at trends in the financial services-related complaints. The paper also looks at complaint reporting from the FTC and CFPB. 

    Consumer complaints are considered an important tool for improving business practices and raising regulatory red flags. There is, however, no national standard for collecting or reporting consumer complaints, so identifying trends is difficult. The lack of uniformity in the private sector, and widely differing practices in the public sector, make it nearly impossible to make “apples-to-apples” comparisons regarding consumer complaints, even for neighboring states.

    Compounding the problem is the plethora of entities collecting and publishing consumer complaint data, each of which has a different focus and rationale for doing so. Examples on the federal level include the Federal Trade Commission (FTC), which publishes the Consumer Sentinel Network (CSN) Data Book each year, and the Consumer Financial Protection Bureau (CFPB), which has a database dedicated to collecting and publishing consumer complaints specifically on financial services. The primary focus of the FTC’s collection was originally identity theft, but it has since expanded to a broader array of consumer complaints. The CFPB’s database is also discussed in this report.

    On the state level, attorney general offices are typically the primary collectors of consumer complaints, though some states have separate consumer affairs agencies for this purpose. Each state has its own method of collecting and reporting consumer complaints, with less than half of the states consistently making such information readily available for public consumption on an annual basis. Of those states reporting consumer complaints, there remains differences in the form these reports take; some states publish annual lists of top complaints as well as searchable databases, some do neither, while the rest fall somewhere in between.

    Multiple private sector entities collect or publish consumer complaint information. One of the most well-known is the Better Business Bureau (BBB), which runs a database for any type of business, brand or charity that chooses to register.

    All of AFSA's white papers can also be found on the AFSA website under State Resources.

    POTUS announces new Fed chair

    President Trump has announced Jerome H. Powell as the next Chairman of the Federal Reserve Bank.

    According to the Fed’s website, Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. He was reappointed and sworn in on June 16, 2014, for a term ending January 31, 2028.

    Prior to his appointment to the Board, Mr. Powell was a visiting scholar at the Bipartisan Policy Center in Washington, D.C., where he focused on federal and state fiscal issues. From 1997 through 2005, Mr. Powell was a partner at The Carlyle Group.

    Mr. Powell served as an Assistant Secretary and as Undersecretary of the Treasury under President George H.W. Bush, with responsibility for policy on financial institutions, the Treasury debt market, and related areas. Prior to joining the Administration, he worked as a lawyer and investment banker in New York City.

    New budget plan unveiled today

    The long-awaited tax plan was introduced today on Capitol Hill. The plan would impact every American business and household.

    Under the plan, the corporate tax rate would be reduced from 35 percent to 20 percent, plus the seven tax brackets for families would be reduced to four brackets.

    The proposed legislation would reduce by half the mortgage interest deduction used by homeowners. The bill is creating a “Family Credit” which would increase the child tax credit from the present $1,000 per child to $1,600.

    Cox Economist: U.S. consumer confidence remains high

    United States’ consumer confidence remains high, despite the property and vehicle damage caused by the hurricane season.

    Jonathan Smoke, Chief Economist for Cox Automotive, addressed the AFSA Vehicle Finance Board last week and reported general stability in the economy despite some headwinds.

    He said economic expansion continued in the second quarter with gross domestic product (GDP) at 3.1 percent, the best quarter in two years. But the economy was slowed by the hurricane season resulting in a third quarter forecast of 2.7 percent GDP. Despite the hurricanes, he said consumer confidence is at a 16-year high, and since his address, the actual GDP supported that sentiment by coming in at 3 percent.

    A former real estate economist, Smoke said sales in the automotive industry are dependent upon credit availability and that roughly 91 percent of drivers in the U.S. own their vehicles compared to 64 percent of US residents who own their homes.

    He said the expansion of the auto market in recent years has been supported by increased lending. Subprime lending in auto sales post-recession peaked at 25 percent in 2015 and has now cooled to just under 22 percent of the market.

    He said the Federal Reserve Bank has reported that banks started tightening standards for auto credit in 2016 which has softened the demand.

    “In the auto industry, we are nowhere near a housing bubble,” he said. “Originations are normal and healthy, and subprime lending is normal.”

    He showed that automotive loan default rates do not reflect a crisis increasing to 1.05 percent in September from an all-time low of under 1 percent in June. He said today’s default rate is just a fraction of the peak of 2.7 percent in 2009.

    Smoke said the auto industry is now in the post peak of the automotive cycle, but says indicators show that 2017 could be one of the best years for auto dealers.

    He is predicting a Seasonally Adjusted Annual Rate (SAAR) of 17.1 million new car and light truck sales this year, but with a decline next year to about 16.6 million vehicles. The result next year would be an uptick in used vehicle sales.

    On the damage by hurricanes that hit Texas and Florida, he said about 600,000 vehicles were severely damaged or scrapped, but that 400,000 should be replaced in the next three months.

    He said 30-40 percent of the replacements will be new vehicles, with the rest being used vehicles. This will cause a tighter wholesale supply of vehicles which is expected to last the next two to three months. Wholesale used vehicle values are expected to increase for the next 2-3 months.

    New leadership installed in AFSA boards, committees at AFSA Annual Meeting

    AFSA Board of Directors: Ginger Herring, President & CEO, 1st Franklin Financial Corporation as Chair, David Paul, Senior Vice President, Financial Services, American Honda Finance Corp. as Chair-Elect, Josh Johnson, President & CEO, Mariner Finance, LLC as Vice Chair & Treasurer

    AFSA Education Foundation Board: Tim Stanley, Chairman of the Board, Heights Finance Corporation as Chair, Jonathon Levin, President & CEO, Turner Acceptance Corporation as Vice Chair, Bill Dunkelberg, Professor of Economics Emeritus, Temple University as Secretary/Treasurer.

    Business Partner Board: Greg Hamby, Senior Director of Business Development, SourceLink as Chair.

    Operations & Regulatory Compliance Committee (ORCC): Jim Sheeran, General Counsel, Tidewater Finance Company as Chair, Stephanie Erdodi, Consumer Compliance Specialist, VW Credit, Inc. as Vice Chair.

    State Government Affairs Committee (SGA): Nathan Glazier, Government and External Affairs Manager, Toyota Financial Services as Chair, Kent Younce, EVP, Government Relations & Public Relations, Security Finance Corp. as Vice Chair.

    SGA Mortgage Lending/Servicing Subcommittee: Pat Green, Regional Director, State Government Affairs, Wells Fargo as Chair.

    SGA Payment Cards Subcommittee: Kevin Finnerty, Director, State Government Relations, Ally Financial as Chair.

    SGA Traditional Installment Lending Subcommittee: Chris McKinley, Vice President, Government Affairs, Lendmark Financial Services as Chair.

    SGA Vehicle Finance Subcommittee: Erin Kerber, Vice President, Regulatory Compliance, Credit Acceptance Corporation as Chair.

    Vehicle Commercial Credit Committee: Ernest Evans, Managing Director, Dealer Commercial Service Executive, Chase Auto Finance as Co-Chair.

    Women’s Leadership Council: Kristin Karwat, CEO, Gateway Financial Solutions as Chair, Rochelle McClanahan, CFO/Compliance Officer, Brundage Management/Sun Loan Company as Vice Chair.

    Several members of the AFSA Board of Directors were elected to a new three-year term:
    Stan Butler, President & CEO, Heights Finance Corporation;
    Jeff Chepkevich, President, Regency Finance Company;
    Kevin Cullum, President & CEO, Nissan Motor Acceptance Corp.;
    R.E. Everette, President, Time Investment Corporation;
    Matt Haney, Senior Vice President & Chief Counsel, John Deere Financial;
    Lee Holzman, President & CEO, Reliable Credit Association, Inc.;
    Tom Hudgins, President & COO, Western Shamrock Corporation;
    Bruce Jackson, Managing Director, Retail Lending Executive, Chase Auto Finance;
    Chuck Jones, Senior Vice President, SunTrust Banks, Inc.;
    Franc Lee, President & CEO, First Tower, LLC ;
    Andrew Morrison, Executive Vice President, Brundage Management/Sun Loan Company;
    April Park, EVP & General Counsel, OneMain Holdings, Inc.;
    Ravi Raghu, SVP, Head of Capital One Auto Finance Business, Capital One Auto Finance;
    Pat St. Charles, III, President & CEO, Citizens Savings & Loan Corporation;
    Nick Stanutz, Senior EVP, Managing Director, Auto Finance & CRE, Huntington National Bank;
    Andrew Stuart, President & CEO, TD Auto Finance US;
    Dan Walters, CEO, Credit Central, LLC.

    The following members were elected to the AFSA Executive Committee:
    Bob Bloom, Senior Advisor, Southern Management Corporation
    Kevin Cullum, President & CEO, Nissan Motor Acceptance Corporation
    Ravi Raghu, SVP, Head of Capital One Auto Finance, Capital One Auto Finance
    Pat St. Charles, President & CEO, Citizens Savings & Loan Corporation

    Kent Younce, Executive Vice President of Government Relations & Public Relations, Security Finance Corporation of Spartanburg was extended a new 3-year term and April Park of OneMain Holding, Executive Vice President & General Counsel, replaced Brad Borchers on the Executive Committee.

    Learn more about AFSA's boards and committees of professional interest and Get Involved today!