Last Week... Today! Credit Score Changes in July, Bitcoin Bank Fraud, Senator Warren Backs Reg Relief for Small Banks
Why Your Credit Score May Go Up This July, NBC News
As the calendar flips to July, you may have more to look forward to than fireworks and Independence Day celebrations. Millions of Americans are poised to see a pop in their credit scores of anywhere from about 10 to over 40 points.
This is all thanks to a little-known policy change having to do with tax liens and civil judgments. A tax lien is a legal claim the government has over your assets if you fail to pay your taxes. Civil judgments are similar, but they’re payments ordered by the courts in settlements. As things stand now, both negatively affect people’s credit scores. However, beginning July 1 the nation’s three major credit bureaus—Equifax, Experian and Transunion—will wipe about half of tax liens and most civil judgments data from consumers’ files.
WHY IS THIS HAPPENING?
Essentially because a lot of this lien and judgment data is wrong. The change, part of the Consumer Financial Protection Bureau’s “National Consumer Assistance Plan,” stems from a class-action lawsuit brought against attorneys general in 31 states.
The plaintiffs alleged something called “mislinking” of data—essentially when someone else’s info ends up on your report—leads to unfair credit score deductions. So for example, if someone who happens to have the same name as you has a terrible credit history, that could end up damaging your credit score, too. The suit also addressed the alleged difficulty of getting these types of errors fixed.
As of July, tax liens and civil debts will be excluded if they do not include sufficient personal identifying information: name, address, and either social security number or date of birth. The bureaus also have to be willing to re-verify the data every six months under the new agreement. Read More.
- Don't Miss July's Credit Scores Webinar!
Credit Scores Demystified: Unraveling FICO & Understanding Credit Risk Factors
Thursday, July 6, 2017 - 2:00 PM - 3:30 PM ET
Let’s face it, for many people credit scores are a mystery. Why does one consumer have a 700+ FICO with late payments and past collections when another consumer’s score, with clean payment history is 50 points lower? And why is the credit score we just pulled for a consumer so much different than the one they received this month from their credit card company? If you have these questions too you are not alone.
In this course we are going to dive as deep as we can in an hour and one half, to unravel the mystery behind the FICO credit score. The information provided is invaluable which every employee who works with credit reports and consumers should have.
Bitcoin Case Defendant Says No Actual Loss To Victim Banks, Law360
A tech expert who was convicted in a scheme to co-opt a credit union to process illegal bitcoin dollar exchanges told a New York federal judge on Friday that the government’s loss calculation for sentencing is “outrageously overblown” because none of the victim banks lost money or even risked losing money.
Yuri Lebedev, who in March was also convicted of wire fraud, bank fraud and fraud conspiracy for working with Coin.mx operator Anthony Murgio to fool banks into thinking the operation wasn't dealing in bitcoin...Read More.
- Don't miss August's Bitcoin webinar:
Tuesday, August 1, 2017 - 11:00 AM - 12:30 PM ET
Due to the growth in the popularity of virtual currencies and the accompanying potential for money laundering, FinCEN issued guidance to "clarify the applicability of the regulations implementing the Bank Secrecy Act (“BSA”) to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies." The key to managing your BSA risk is to fully understand what virtual currencies are and what threat they pose to your institution.
Elizabeth Warren Backs Regulatory Relief For Small Banks, Pymnts.com
Senate Democrats would be willing to see some changes made to Dodd-Frank in order to give small banks and credit unions some relief from the banking regulation’s tougher rules.
Senator Elizabeth Warren — a strong backer of D0dd-Frank and the architect of the CFPB that came from it — told reporters that Democrats would be willing to pursue targeted changes to the law for small financial services institutions, but that she and her colleagues would fight long and hard against changing laws to roll back consumer protections or to help big banks.
Ms. Warren’s remarks came a day after the Trump administration unveiled a road map for easing regulatory requirements for all types of financial institutions.
“There are places where we should do targeted changes in laws and regulations to make sure community banks don’t have to endure regulations…for problems like disrupting the entire U.S. economy when they really don’t pose that kind of threat,” Ms. Warren said.
Warren further noted that many of the “too big to fail” banks have actually gotten bigger, and that means regulatory editing is needed.
House Republicans would like to see that editing done liberally and have rolled out various plans to roll back the financial regulations that followed the Great Recession. But many of those regulations require legislative action in the Senate — which means Democrat involvement, since Republicans do not have a 60 vote super-majority.
“We can work together when you are not changing the law,” she said. Read More.
Sanders's wife hires lawyer amid bank fraud investigation, The Hill
Jane Sanders, the wife of former Democratic presidential candidate Sen. Bernie Sanders (I-Vt.), has hired two high-powered lawyers with Washington, D.C., connections to defend them as the FBI investigates whether Jane Sanders falsified loan documents while she served as the president of Burlington College.
Sanders has hired Rich Cassidy, a well-connected attorney from Burlington, Vt., as well as Larry Robbins, the Washington-based attorney who defended I. Lewis “Scooter” Libby, to defend herself and her husband in the matter, former campaign manager Jeff Weaver told Politico.
“It would be negligent for anyone involved in the matter to not retain counsel,” Weaver told Politico.
In May, it was reported that Sanders claimed Burlington College could count on $2.6 million in donations to pay for purchased land, according to a 2010 loan application. But she ultimately raised only a fourth of that, making $676,000 in donations over the next four years, forcing the college into bankruptcy in May 2016.
Sanders was accused of falsifying the information on the loan documents in order to expand the college grounds by Brady Toensing, President Trump's campaign manager in the state of Vermont, according to Politico's report. Toensing sent multiple letters to the FBI and federal officials in 2016 urging an investigation into Sanders's management of the college's finances.
“As a result of my [initial] complaint,” Toensing wrote to federal officials, “I was recently approached and informed that Senator Bernard Sanders’s office improperly pressured People’s United Bank to approve the loan application submitted by the Senator’s wife, Ms. Sanders.” Read More.
Doctor indicted on bank fraud charges, The Washington Post
A federal grand jury in Delaware has indicted a Maryland doctor on charges of conspiring to commit bank fraud and making false statements on loan applications.
The indictment unsealed this week alleges that 44-year-old Zahid Aslam of Elkton, Maryland, an OB-GYN who also has medical practices in Delaware, New Jersey, and Pennsylvania, entered into an illegal scheme with Tae Kim, who worked as a loan officer at Citibank and WSFS.
Prosecutors allege that Aslam recruited two associates to apply for loans because Aslam knew he would not qualify for financing. Read More.
Customers Sue Darden Restaurants Over Information on Receipts, JDSupra
A class action lawsuit was recently filed against Darden Restaurants, Inc. (“Darden”), alleging that Darden violated the Fair and Accurate Credit Transactions Act (“FACTA”).
Specifically, the plaintiffs alleged that Darden, which includes Olive Garden among its restaurant chains, violated FACTA by printing the full expiration date on credit card receipts, allowing potential identity thieves to readily discern whether the card is still active and narrow their focus to more viable targets. Plaintiffs alleged they suffered actual harm by asserting that they are now “burdened with elevated risks of identity theft” and because a “portion of the sale from the credit or debit transaction is intended to protect consumer data.” The plaintiffs are seeking statutory damages and injunctive relief.
Among other requirements, FACTA prohibits businesses from printing more than five digits of a customer’s card number or the card expiration date on any receipt provided to the cardholder at the point of sale or transaction. Read More.
Customer Outreach: The Federal Trade Commission (FTC) Does Not Need Bank Account Information!
Your Financial Institution can reach out to your accountholders or members by offering them advice to avoid fraudulent practices. One scam, which takes advantage of the Federal Trade Commission's (FTC) mission to protect consumers, is on the rise.
The scam operates via e-mail message. The e-mail claims to be from FTC Acting Chairperson Maureen Ohlhausen, and requests the recipient's bank account information in order to transfer money from the government's $586 million settlement with Western Union.*
The real purpose of the email is to steal your accountholders' or members' financial information. Your institution can help protect your customers by passing along the following tips:
- Don't Reply to Unsolicited Emails & Don't Click on Links. Opening a link can result in malware being downloaded onto one's computer, which can lead to identity theft and fraud. Remind customers that even if emails look familiar to FTC messages, they may still be fraudulent. Encourage customers to foward any suspicious messages to the FTC and report the email to BBB's Spamtracker.
- The FTC Doesn't Ask for Personal Information - They Will Mail Checks! While the FTC does return lost funds to consumers, the Commission will never ask for identifying information like a Social Security number or banking details. The FTC refunds money in the form of a check via the postal service.
- Pressure Tactics are a Red Flag! Alert customers to the fact that anytime s/he is pressured to immediately act - whether to give personal information or in order to receive payment- this should trigger a big red flag.
*The U.S. Department of Justice will actually process and distribute refunds from this settlement; however, this process hasn't yet begun.