With the end of financial relief measures from COVID-19, the restart of student loan collections is poised to notably impact consumer spending and debt strategies. Borrowers who defaulted on their student loans will face renewed collections efforts, including wage garnishments and withholding of tax return payments, influencing various aspects of debt management. This financial responsibility will likely tighten budgets, reduce discretionary spending, and challenge borrowers' capacity to manage unsecured debts. With these financial strains, there might be a shift towards increased enrollment in debt settlement programs as consumers explore options to manage their financial obligations.
The Federal Trade Commission alleged that Global Circulation, Inc. (GCI) and its owner, Kenneth Redon III, threatened consumers with jail time, lawsuits, and wage garnishments to pressure them into paying debt they didn’t actually owe. In an amended complaint, the FTC further alleged that GCI and Redon falsely claimed affiliation with specific lenders to trick consumers into paying, a violation of the FTC’s Impersonation Rule. The FTC’s proposed order would permanently ban GCI and Redon from the debt collection business.
The two Democratic NCUA board members ousted by President Trump have filed suit, arguing that their firings violated federal law.
Todd Harper and Tanya Otsuka filed suit in the U.S. District Court for the District of Columbia, naming President Donald Trump, Treasury Secretary Scott Bessent, NCUA Chairman Kyle Hauptman and others as defendants. They contend that they only could be fired for cause. “The identical, one-sentence emails sent to both Mr. Harper and Ms. Otsuka at the same time on the same day say nothing about the reasons for the termination, and do not attempt to assert a basis for cause,” the two state.
The California Privacy Protection Agency announced this month that it, along with six other states, will be forming a new group called the “Consortium of Privacy Regulators.” (The other states are Colorado, Connecticut, Delaware, Indiana, New Jersey, and Oregon.) Members include the Attorneys General from these states, as well as California’s privacy regulator (the CPPA).
The pay later revolution has reshaped consumer credit by offering shoppers the allure of instant gratification with the added value of deferred payments. But its business model is quietly shifting, with shoppers footing part of the bill.
When the industry first emerged more than two decades ago, it relied largely on fees that banks and FinTech firms charged to merchants that accepted the payment method. Retailers were willing to suck up those costs because they saw buy now, pay later (BNPL) as a powerful tool to attract new customers and grow sales.
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