Law and regulation

The final vote on the massive bank reform bill is expected as early as this week, and despite the fact it is almost guaranteed to contain the Durbin interchange amendment bitterly opposed by credit unions, the battle is not over.

An Illinois regulatory agency revoked the license of Creditors Service Bureau of Springfield Inc., a collection agency based in Springfield, Ill., and fined the company $55,000.

Lawsuits filed in the U.S. against units of HSBC Holdings PLC charge that the lender's credit card payment-protection service defrauds disabled, retired and unemployed consumers, according to Bloomberg News.

Filene Research Institute has launched a study to determine the effects the impending interchange amendment in the bank reform bill on credit unions, who are lobbying Congress against the amendment.

Editor's Note: Collections & Credit Risk first published this story on Saturday, July 3. Please check our home page often for breaking news, which can appear on the site long before our pre-scheduled CCR Newsline delivery dates.

Illinois Attorney General Lisa Madigan's office sued former mortgage giant Countrywide Financial Corp. this week for allegedly using discriminatory lending practices for minority borrowers - violations of the Illinois Human Rights Act and the Illinois Fairness in Lending Act.

New obstacles to speedy passage of the financial-reform bill emerged June 29 that likely will postpone a Senate vote on legislation that would reshape the debit card interchange landscape.

Suppose Congress approves the Dodd-Frank Act, and small issuers with less than $10 billion in assets are exempt from debit card-interchange rates the Federal Reserve Board eventually deems “reasonable and proportional.” How will merchants know whose debit cards are exempt?

New York Attorney General Andrew M. Cuomo's office is sending more than 30 new cease-and-desist letters to mortgage rescue companies, warning them to immediately end all misleading and illegal conduct.

A year or so from now, merchants likely will be paying less to accept debit cards, and financial institutions will be earning less revenue issuing them. And some issuers may have to reacquaint themselves PIN-debit brands not associated with Visa Inc. or MasterCard Worldwide.

When final debate on the financial reform bill ended in the early hours of June 25, the new rules surrounding debit card interchange stood unchanged, beyond a few key carve outs announced June 21.

The Arizona Financial Fraud Enforcement Task Force announced multiple indictments charging 38 individuals in various mortgage fraud schemes across the state this month.

House conferees reached an accord Monday with Sen. Richard Durbin, D-Ill., on a provision of the regulatory reform bill that would allow the Federal Reserve Board to regulate interchange fees on debit cards.

An ad running in the Capitol Hill newspaper Roll Call is attacking credit unions in a manner reminiscent of an ad run years ago by credit unions’ main nemesis – the bankers – except this time bankers are on the same side, and in fact are partners with credit unions in the fight to block the interchange amendment to the bank bill.

The chief sponsor of the Senate’s interchange amendment creating price controls agreed yesterday to exempt all government programs from his provision, eliminating an argument being used by credit unions and banks lobbying against the measure.

Green Dot Corp., which plans to go public, disclosed in a filing with the Securities and Exchange Commission earlier this month that it issued 2,208,552 shares of Class A common stock to Wal-Mart Stores Inc., sparking speculation the retailer is indirectly trying to gain a toehold in banking following failed attempts to do so three years ago.

Rhode Island Attorney General Patrick C. Lynch today warned consumers about a collection scam involving individuals impersonating law enforcement officials, including claiming an affiliation with the Bureau of Criminal Identification (BCI) Unit.

In the biggest independent lobby against the interchange amendment Navy FCU, one of three credit unions on the wrong side of the exemption from the amendment price-control provision, is calling on its 3.5 million members to urge Congress for defeat of the measure.

A Virginia couple accused of forging the wife’s grandfather’s signature on more than a dozen bogus student loan applications worth nearly a quarter million dollars were sentenced in federal court for their crime.

Credit card issuers were somewhat spared in the Federal Reserve Board’s final rules issued June 15 regarding card penalty fees, which analysts say were not as severe as some had feared.