insideARM Weekly Recap - Week of September 16th, 2024

The world of debt collection is never at a loss for updates, but separating the important stuff from the background noise isn't always easy. At insideARM, our goal is to help you answer those questions. We wade through the constant onslaught of updates and bring you the need-to-know highlights. Every Monday, we bring you a recap to help you stay informed and let you know why that piece of news is important.

We provided several regulatory and legal updates last week, including federal court cases and CFPB opinions. 

To start off the week, we reported how the U.S. Court for the District of Nevada granted summary judgment in favor of the debt collector on both FDCPA and TCPA claims. The plaintiff alleged that the debt collector violated the FDCPA by contacting her despite knowing she was represented by counsel, and that they violated the TCPA by using an auto-dialer without her consent. The court found that the defendant did not have knowledge of legal representation for the third debt account and that the plaintiff had given express consent to receive calls by providing her phone number for medical care. As a result, the court dismissed all claims, siding with the debt collector. For cases like this, agencies need to have policies and procedures around flagging accounts where an attorney is acting on behalf of a client. It is also helpful to provide additional clarification that supplying a phone number to a creditor is giving consent to contact, even with an ATDS.  

Next, we featured updates on CFPB activity from August. It appealed a Texas District Court decision that invalidated changes to its examination manual regarding discriminatory conduct as an unfair practice, following the Supreme Court’s ruling that the CFPB’s funding structure is constitutional. Additionally, the CFPB joined other financial regulators to propose data standards for regulatory interoperability under the Financial Data Transparency Act of 2022, with comments due in 60 days. The agency also issued an advisory opinion clarifying that federal home lending rules apply to "contract for deed" transactions, which can negatively impact housing markets. Lastly, the CFPB announced it will not seek penalties for noncompliance with its new Buy-Now-Pay-Later (BNPL) rules during a transition period, with further guidance expected in September. 

Finally, on Thursday, we reported on a CFPB comment letter to the Treasury Department emphasizing that AI-driven products and services must comply with existing consumer financial laws, such as the Equal Credit Opportunity Act (ECOA) and UDAAP. The CFPB stressed that there is no regulatory exception for new technologies and urged companies to ensure that emerging technologies like machine learning and AI are used responsibly. It warned that firms unable to comply with consumer protection laws should not adopt such technologies. Agencies using AI should work to consider and meet the CFPB expectations. 

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 September 9th, 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!