Tampa Bay area woman finds thief wiped out bank account while she slept

TAMPA, Fla. — Online banking has attracted millions of customers since the pandemic started. Consumers love the perks of being able to do everything online along with free accounts.
For some customers, online banks allow them to access their paychecks a day or two in advance making online services even more appealing. Single working mom Shayla King chose Chime for convenience. King said she uses her Chime account to pay bills and save money.
She’s never run into a problem — until now.
On July 16th, King discovered someone wiped out her account overnight. King logged into her account and the balance was $2.64. A company in India had made over 60 withdrawals totaling $747 while she slept.
King said Chime texted her repeatedly during the night asking if she authorized the transactions. But when she didn’t answer, the transactions were allowed to go through. She filed a fraud report and a dispute, but days later Chime notified her that they found no error on their part.
Bankrate.com’s Greg McBride said complaints like Shayla’s are common with online-only accounts and pay apps. He advises consumers to try direct messaging their bank on Twitter or Facebook if they can’t get through to customer service.
King said in her case, reaching someone by phone didn’t resolve her issue. She told ABC Action News her mother is the one who suggested she make a call for action to Taking Action Reporter Jackie Callaway. Jackie looked at all of the documentation including those 60 transactions then messaged the company and asked why they allowed the withdrawals?
The next day, King said, Chime refunded the entire amount. The bank would not comment on why it allowed the transactions to go through in this case but did issue this statement: “Please be assured Chime takes matters like this very seriously and our member services team has worked quickly to investigate and fully resolve this member’s issue. A debit has been issued by Chime and the member has full access to their funds.”
Anyone dealing with a similar issue with their bank or credit card can file a complaint with the Consumer Financial Protection Bureau: https://www.consumerfinance.

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Biden administration revokes Trump-era rule on student loan oversight, paves way for probes

The Biden administration has revoked a Trump-era rule that consumer advocates argued allowed the Education Department to subvert state law enforcement probes of student loan servicers — one of a series of recent overhauls that could pave the way for more robust investigations.
In a new letter obtained by NBC News, a group of Democratic senators are expressing support for Education Secretary Miguel Cardona for the latest reversal that tightens oversight of the student loan servicing industry, but they also believe the department must go further to ensure states have the full backing of the federal government to hold loan companies accountable.

The Trump administration’s policy, posted in the Federal Register in March 2018, “interfered with state regulators exercising their authority to protect consumers in their states,” the eight lawmakers, led by Sen. Elizabeth Warren, D-Mass., and Sen. Sherrod Brown, D-Ohio, wrote to Cardona.
The revised interpretation, which went into effect last month, “is not only legally sound, but will also have substantial benefits for borrowers,” the senators added. “State attorneys general have been at the forefront of oversight of student loan servicers in recent years, uncovering widespread patterns of misleading and abusive conduct and winning significant settlements for borrowers in their states.”

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A Consumer Financial Protection Bureau report in June reaffirmed that servicers have “engaged in unfair acts or practices related to providing inaccurate monthly payment amounts to consumers after a loan transfer” and “regularly provided inaccurate information about eligibility for [Public Service Loan Forgiveness] or Direct Consolidation Loans, resulting in deceptive acts or practices.”
Roughly 43 million borrowers hold a ballooning $1.5 trillion in student loan debt, federal statistics show, with students of color more likely to take on such debt and disproportionately struggling to pay it back. Since President Joe Biden took office this year, he has wiped out nearly $10 billion worth of student loan debt, most recently for students enrolled in a for-profit college that was accused of malfeasance and closed.

However, advocates for student debt cancellation, including many Democratic senators, have called on Biden to use his federal authority to do more.

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The recent policy change spearheaded by Cardona is a sharp reversal of the agenda undertaken by former Education Secretary Betsy DeVos, who was accused of putting the for-profit college industry and student loan servicers ahead of helping student borrowers.
Under DeVos, the Education Department had argued that the federal government’s oversight pre-empted state regulations when it came to policing the student loan industry, which Democratic lawmakers had said allowed the administration to essentially shield student loan servicing companies.

The Student Loan Servicing Alliance, a trade group, which had defended the Trump administration’s interpretation — saying it was “not just good law, it is good policy” — did not immediately respond to a request for comment Tuesday.

A group of Democratic attorneys general — representing California, Colorado, Connecticut, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Virginia, and Washington, D.C. — sent a joint letter to Cardona this week in support of the latest policy change, but asked for clarification that “state laws regulating servicers are not preempted” except in certain narrow circumstances.

Cardona said last month that “effective collaboration among the states and federal government is the best way to ensure that student loan borrowers get the best possible service.”
In their letter, the Democratic senators have asked him to ensure that the messaging is clear that student borrowers will be protected.
“When servicers or other contractors take positions that obstruct Federal or state oversight, they should face consequences under their current contracts and in future allocations and renewals,” they wrote. “We strongly urge you to incorporate accountability for abusive and illegal consumer practices and for failure to cooperate with Federal and state regulators into the ongoing management of the student loan program.”

Erik Ortiz is a staff writer for NBC News focusing on racial injustice and social inequality.

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Troutman Pepper Weekly Consumer Financial Services COVID-19 Newsletter – September 2021 #2 | JD Supra

Like most industries today, Consumer Finance Services businesses are being significantly impacted by the novel coronavirus (COVID-19). Troutman Pepper has developed a dedicated COVID-19 Resource Center to guide clients through this unprecedented global health challenge. We regularly update this site with COVID-19 news and developments, recommendations from leading health organizations, and tools that businesses can use free of charge.
Our bank and loan servicing clients also face novel challenges affecting their industry due to COVID-19, particularly the ever-changing rules and regulations concerning evictions and foreclosures. We closely track these updates and have assembled an interactive tracker containing state orders and guidance documents regarding residential foreclosure and eviction moratoriums. You may access this interactive tool at https://covid19.troutman.com/.
To help you keep abreast of relevant activities, below find a breakdown of some of the biggest COVID-19 driven events at the federal and state levels to impact the Consumer Finance Services industry this past week:
Federal Activities
State Activities
Privacy and Cybersecurity Activities
Federal Activities:

On September 9, the Federal Reserve Board published a paper, describing the landscape of partnerships between community banks and fintech companies. The paper captures insights gathered from extensive outreach with community banks, fintechs, and other stakeholders. The outreach involved discussions focused on the strategic and tactical decisions that support effective partnerships. For more information, click here.

On September 9, the Consumer Financial Protection Bureau (CFPB) released a report on the agreements signed between credit card issuers and colleges, or organizations affiliated with colleges, finding that the market for college credit cards continued its general trend of decline in 2020. The report also finds that agreements with alumni associations continued to make up the largest part of this market, as defined by the number of agreements, the number of accounts, and the amounts of payments made by issuers to their counterparties. For more information, click here.

On September 8, the Office of the Comptroller of the Currency (OCC) proposed rescinding certain updated fair lending rules as the agency begins work on drafting a new regulation. Under the proposal, the OCC would go back to the previous 1995 regulations for the Community Reinvestment Act (CRA), a 1977 fair lending law. For more information, click here.

On September 8, the Federal Trade Commission (FTC) approved final revisions that would bring several rules that implement parts of the Fair Credit Reporting Act in line with the Dodd-Frank Wall Street Reform and Consumer Protection Act. For more information, click here.

On September 8, the CFPB released new model validation notice (MVN) formats required under Regulation F online. The newly available alternate MVN formats should make it easier to incorporate the MVN into existing systems and to make formatting and other permissible changes by the November 30 effective date for Reg. F. For more information, click here.

On September 7, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency announced that they will extend the comment period to October 18 on proposed guidance designed to help banking organizations manage risks associated with third-party relationships, including relationships with financial technology-focused entities. The proposed guidance seeks to assist banking organizations in identifying and addressing the risks associated with third-party relationships and responds to industry feedback requesting alignment among the agencies with respect to third-party risk management guidance. For more information, click here.

On September 7, the CFPB took action against an income share agreement (ISA) provider for mispresenting its product and failing to comply with federal consumer financial law that governs private student loans. The ISA provider provides students with money to finance their higher education, in the form of ISAs, under which students agree to pay a percentage of their income for a set period of time or until they reach a payment cap. Allegedly, the ISA provider falsely represented that the ISAs are not loans, failed to provide disclosures required by federal law, and violated a prepayment penalty prohibition for private education loans. Under the CFPB’s order, the ISA provider must provide disclosures that comply with federal consumer financial law, eliminate the prepayment penalties, and stop misleading borrowers. For more information, click here.

On September 7, CFPB Acting Director Dave Uejio issued a statement after the U.S. District Court for the Western District of Texas upheld the Payment Provisions in the CFPB’s 2017 rule on payday, vehicle title, and certain high-cost installment loans. For more information, click here.

On September 3, the CFPB issued guidance on student loan servicing contracts to borrowers responsible for federal student loan payments in forbearance for more than a year and when some servicers’ contracts end. For more information, click here.

State Activities:

On September 9, the Virginia State Corporation Commission adopted regulations, implementing laws that protect borrowers by regulating student loan servicers in Virginia. According to a Virginia attorney general press release, the legislature passed “Chapter 26 in Title 6.2 of the Virginia Code and that tasked the SCC with issuing regulations implementing Chapter 26. Chapter 26 protects student borrowers from servicers who would, among other things, engage in unfair or deceptive conduct, misapply loan payments, or misreport information to credit bureaus.” The act also authorizes the Virginia attorney general to bring enforcement actions. For more information, click here.

On September 10, Texas Attorney General Ken Paxton announced the filing of six lawsuits against school districts alleged as “defying Governor Abbott’s Executive Order GA-38 regarding mask mandates.” According to the AG, Order GA-38 places the governor in charge of the statewide response to the COVID-19 pandemic. For more information, click here.

On September 10, Washington, D.C. Attorney General Karl Racine announced his office “is partnering with local nonprofit organizations to sponsor three additional in-person STAY DC clinics to help residents navigate the application process so they can get support to pay their rent and utility bills, as many have struggled financially during the COVID-19 pandemic.” Per the press release, “STAY DC is a financial assistance program for District renters and housing providers who are looking for support to cover housing and utility expenses and offset the loss of income. The program is meant to help families settle debts, pay landlords what they are owed and, ultimately, avoid a crisis when the District’s moratorium on eviction proceedings expires later this year.” For more information, click here.

Privacy and Cybersecurity Activities:

On September 10, the FTC released an advisory reminding individuals that there is still COVID-19 aid available through the federal government and likely through state and local government. While some individuals may receive benefits automatically, others may need to apply. For those applying for COVID-19 benefits, the FTC reminds individuals that the government will not “ask you to pay anything to get COVID-related financial help[;]” anyone who asks for payment and financial or personal information is likely running a scam. For those interested in reading the full alert, click here.

Earlier in September, a court-appointed special master, handling discovery disputes related to a suit where grocery shoppers claim they can’t wear face coverings due to a medical condition, recommended that the defendants, if they wish, should “conduct a more thorough search of any or all Plaintiffs’ text messages, Facebook accounts and private emails” to a acquire a more in-depth digital record. Access to the plaintiffs’ Facebook accounts includes access to their personal messages — implicating the plaintiffs’ privacy. Grocery store customers argued that the grocery stores’ policy prohibiting shoppers to enter the store without a mask violated their rights under the American’s with Disabilities Act. To read the full opinion, click here.

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How 3 developers aim to automate fairness, data security in lending

As the Biden Administration ramps up its efforts to regulate data collection and surveillance practices, fintechs are racing to develop software products that anticipate ethical considerations in mortgage underwriting and servicing processes.
The government has long signaled its interest in acting as a watchdog over consumer information and automated decisioning. In both 2018 and 2020, the Consumer Financial Protection Bureau put out requests for input around data gathering and ownership. Furthermore, as part of his July executive order on competitive practices, President Biden asked regulators to look at data collection and surveillance practices.
MeasureOneConsumer-permissioned data aggregator MeasureOne recently expanded its offerings into the mortgage business. As a technology provider, “we obviously don’t play any role in the ownership of the data, and we certainly will always fall on the side of the consumer because we believe not only is that the right thing but ultimately that’s where it’s going to end up,” said CEO Elan Amir

In its setup, MeasureOne is the “trusted party.” The consumer gives their consent and provides the credentials so it can access the information, serving as a barrier between the data and the outside world. The business that will ultimately use the information does not get those credentials.

“We enable the consumer to share that data and to not have the institution be able to restrict that data, by not providing an electronic interface publicly,” said Amir. “We allow the consumer to essentially say ‘look this is my data, I’ll just share it with the requesting business,’ and in that way everybody wins.”
MeasureOne has access to more income and employment data than is used by sources the mortgage business has worked with for years to verify the information, Amir said. “We can share a much more accurate picture and much more up-to-date picture than you would have from a database that is reliant on being updated from payroll processors or other types of data sources.”
In the current system, the institution will provide access to the data and can then sell it off, Amir said.
“And so what we’ve done and what motivates us, is to use the consumer’s access to the data that they already have to [their own] benefit,” he said. “Ultimately, moving away from the aggregator monetization resale model that has dominated frankly the last 30-40 years.”
Touchless Lending by TavantSoftware developer Tavant also recently launched a product aimed at reducing the number of hands in the pot during the origination process. Touchless Lending is designed to provide an end-to-end loan manufacturing experience.
“It would be nirvana if we can take a loan from application submission all the way to clear to close without any human intervention,” said Mohammad Rashid, the head of Tavant’s fintech practice. “I doubt that can be done today.”
Touchless Lending’s first iteration is mortgage specific. “It will take an application that is submitted to a loan origination system and basically take it forward in an automated manner through the hoops, right through the workflow that allows it to be a decision,” said Rashid.
Tavant broke the underwriter’s workflow down into five steps. The software checks for consistency, assessing whether the borrower’s assets match up with the income or the property being bought, the loan program involved and so forth, he said.
“Do all these component areas fit as a jigsaw puzzle? When it doesn’t fit, that’s where you want to highlight the fissures, the fault lines,” Rashid said. The underwriter is then informed of what things specifically they would need to further examine.
The underwriter’s experience and expertise “is something that we need to be able to convert into a software process, an algorithmic processing capability,” Rashid said. “And what best to do that then is machine learning techniques that we bring in so our injection of AI is very, very judicious.”
Tavant is capturing information so there’s a “data lake behind the scenes,” he said. The software records what users did with files, records of human-to-human contact regarding the loan, and what kinds of determinations were made.
“And as we get more and more loans through, we basically can generate insights through deep learning capabilities, and then inject those insights back into our operational pipeline,” Rashid said. “These loans with these characteristics and these borrowers fall into this bucket and usually what happens with this bucket is that they go through this set of processes or a set of reviews, and maybe that insight gives [an originator] a better way of judging the pipeline.”
InRule integrates simMachinesIn June, InRule, an automated decisioning platform, acquired simMachines, which offers technology that explains decisions made by AI and machine language systems.
Even before a transaction, the software informs users about the system rules that came into play when a decision was made, said Chris Berg, InRule’s director of corporate development.
By contrast, with machine learning models, “that decision could never say what factors were affecting the outcome, which were the critical criteria present that made that decision,” he said.
“With simMachines we can explain, not just in aggregate the impact on a population, but we can say, ‘here’s the specific weights on data that affected that outcome, and not even the data that was present, but also the data that was missing.’”
That allows users to test for fairness and ensure that for a protected class there is little or no difference between the outcomes of these decisions. If a lender’s going to use AI safely, it needs to be able to do that, Berg said.
To control against unintended consequences, the lenders who use the software need to continually monitor its results.
“You could have drift in your models too, so it’s a changing landscape, lending is always changing,” Berg said. “So, you need practice there as well to pick up on the drift and changes that are occurring in the population.”
The aim is to lend to more consumers. Even with the changes to the qualified mortgage rule, the debt-to-income ratio ceilings are “a blunt instrument” when trying to expand the market, he said.
Someone who doesn’t make much money but is careful with how they spend might actually be a better risk than that person who fits in the traditional ratios but spends their money freely. simMachines can assist in making those distinctions, Berg said.
“I think we need a more refined set of tools to find the folks that lift up our points of view about what risk really is, and [thus] how we can help more people,” Berg said.

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Hawley endorses Vance in Ohio Senate race

Sen. Josh HawleyJoshua (Josh) David HawleyBiden steps into legal fight with vaccine mandates Chris Wallace on lawmakers who contested Biden’s election: I don’t want to hear ‘their crap’ Trump schedules rallies in Iowa, Georgia MORE (R-Mo.) endorsed Ohio Republican JD Vance in the Buckeye State’s GOP Senate primary Tuesday, lending his conservative bona fides to the venture capitalist and bestselling author’s bid to replace outgoing Sen. Rob PortmanRobert (Rob) Jones PortmanTrump administration trade rep endorses JD Vance in Ohio Senate race Crypto debate set to return in force GOP hopefuls fight for Trump’s favor in Ohio Senate race MORE (R-Ohio).
Hawley, a firebrand who entered the Senate in 2019 and was a vocal supporter of objections to the 2020 election results, touted Vance as an advocate of several red meat issues to conservatives, including tightening immigration restrictions and clamping down on tech companies.
“I’m proud to endorse JD Vance for U.S. Senate from Ohio. JD knows well the devastating realities that our country faces. Especially in Ohio, families gripped by addiction have the cards stacked against them and entire towns continue to plummet,” he said in a statement of the “Hillbilly Elegy” author. 
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“JD will fight for tighter restrictions at the southern border, bring back a robust manufacturing industry and put the needs of our own American citizens first. JD is the only candidate out in front of the corruption in our technology industry. He will crack down on Big Tech bowing down to China, stand up for the American worker, and put our country back on the track of prosperity and opportunity.”
The endorsement is the first by Hawley in an open Senate race in the 2022 cycle.
The Missouri Republican is considered by many to be a potential 2024 presidential contender if former President TrumpDonald TrumpBiden stumps for Newsom on eve of recall: ‘The eyes of the nation are on California’ On The Money: House Democrats cut back Biden tax hikes Abortion providers warn of ‘chaos’ if Supreme Court overrules Roe v Wade MORE doesn’t run, and getting involved in key midterm races could be a way to bolster his own standing with the GOP grassroots during a cycle in which he’s not up for reelection. 
Vance, who burst onto the scene when his 2016 memoir became a bestseller, has recently garnered a slate of endorsements from prominent conservatives, including former Trump administration cabinet officials and Indiana Congressman Jim Banks, the chair of the Republican Study Committee.
“I’m honored to receive Josh’s endorsement. No one else in the U.S. Senate has fought as tirelessly against the Big Tech monopolists who censor conservatives and control the flow of information in our country. Josh points the way toward a conservatism that stands for the interests and values of American workers and families. I’m honored to have his support and thrilled to work with him in the Senate,” said Vance.
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Vance is among several candidates vying for the GOP nomination in the Senate race, including former Ohio treasurer and two-time Senate candidate Josh Mandel, former Ohio GOP Chair Jane Timken and Cleveland businessman Bernie Moreno. 
Recent polls have shown Mandel with a lead but Vance closing the gap.
Rep. Tim RyanTimothy (Tim) RyanTrump administration trade rep endorses JD Vance in Ohio Senate race GOP hopefuls fight for Trump’s favor in Ohio Senate race Trump’s last national security adviser endorses JD Vance in Ohio Senate race MORE and former Consumer Financial Protection Bureau senior adviser Morgan Harper are running in the Democratic primary.

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The curious case of a chameleon zombie coding school

Make School, a San Francisco-based coding school, promised a crash course that would eventually land students jobs in Silicon Valley.“It’s not just about coding here — it’s a well-rounded degree,” Make School Co-Founder Jeremy Rossmann said in a June 2019 promotional video. “Our alums now work at a range of awesome startups and top tech companies including Facebook, Google, Apple, and Tesla.”That promise fell apart over several weeks in July when the entire school seemingly unraveled: Make School was sued for allegedly selling predatory educational financing products to its early students, the school’s accreditation application was denied, financial backers apparently backed out, and students were absorbed by a separate school.“We applied to something that is no longer in this room,” one Make School student said on a July 16 Zoom briefing call titled “Make School – Town Hall (End Game)” that was published on YouTube. “We applied to something that no longer exists.”Documentation from the saga and interviews with current and former students, university officials, and higher education experts reveal that Make School depended on a high-risk business model and questionable tactics to become a sort of for-profit-nonprofit chameleon before turning into a zombie-like entity that technically exists but doesn’t currently operate.(https://makeschool.org/)“It always felt like a scam, in that when the house of cards falls, it shouldn’t be surprising,” Mike Pierce, managing counsel at the Student Borrower Protection Center, a consumer advocacy group that supported the lawsuit, told Yahoo Finance.Pierce, a former Consumer Financial Protection Bureau (CFPB) regulator, added that Make School “had all of the hallmarks of a slick sales pitch more than an actual school, including commitments about job placement, commitments about future earnings, things that you see at the larger for-profit colleges. It appears that they just took a page out of the predatory school playbook and slapped a shiny Silicon Valley wrapper on it. And here we are.”Story continues‘A magical way for someone with absolutely no money to attend school’Founded in 2012 as an iOS gaming company, the company behind Make School pivoted to become a coding bootcamp called Make School PBC in 2014. (PBC refers to a Public Benefit Corporation.)Make School PBC began operating without state approval, which is necessary for postsecondary schools to operate in California, and was also unaccredited.The for-profit school’s early model depended on income-share agreements (ISAs), a type of experimental financing that involves students receiving education-related loans in return for agreeing to repay 20% to 25% of their pre-tax income every month for three and a half years or more.“It’s like this magical way for someone with absolutely no money to attend school and not have to worry about paying a dime until they land a job,” a former student from the D.C. area, who withdrew from the program early and asked to remain anonymous for privacy reasons, told Yahoo Finance. “The opportunity was sold to [students].”A Make School YouTube promotional video. (screenshot/YouTube)In 2016, the California Bureau for Private Postsecondary Education (BPPE) informed Make School that it was violating state law by operating without the agency’s approval. The agency initially fined the school $100,000 and demanded that Make School PBC cease operations in California.In July 2018, the fine was reduced to $25,000 after the BPPE approved Make School’s proposal to operate as a non-accredited institution.The coding bootcamp was successful enough to morph into an accredited two-year bachelor’s degree-granting institution in December 2018 after an accreditor approved Make School to administer Dominican University’s Applied Science degree program. The two-year degree with on-campus instruction cost around $70,000 while students taking the courses online paid around $65,000.The accreditation-by-association came from the WASC Senior College and University Commission (WSCUC) as part of an incubation program. Under the rules, a new school like Make School could partner with an established college to test course offerings and, after a 3- to 5-year period, apply for its own accreditation.“The idea of creating the incubation was to allow ideas that may have educational merit to find a footing, even before the entity had met all of the requirements for being accredited,” WSCUC President Jamienne S. Studley told Yahoo Finance. “It was a way for innovation to be pursued.”An aerial view of Dominican University. (Photo: Dominican University)For-profit side becomes ‘the financing arm of the school’ — and then foldsIn April 2019, Make School PBC raised $15 million to offer a “unique bachelor’s degree program.”The company then created a nonprofit and began the process to become an independently accredited educational institution.The Make School PBC co-founders identified a nonprofit entity, Oxford Teachers Academy, that they repurposed as MakeSchool.org, a “separate and independent” entity from the original for-profit Make School, according to emails obtained by the Century Foundation, a progressive think tank, and shared with Yahoo Finance. The goal behind moving to nonprofit status was so that they could “seek grants and donations to help low-income students cover living expenses,” Make School Co-Founder Ashu Desai wrote in a blog post announcing the application for independent accreditation in December 2020.Accreditation also brings extra revenue: Aside from ISAs, students can take out federal loans and Pell Grants to finance the two-year program.“We’re rethinking what it means to be an elite institution — rooted in the progressive value system that inspires the diverse community of learners and makers we serve,” Desai stated in a 2019 press release. “To realize that vision, we’ve designed an inclusive admissions process … and we’ve built an education that has enabled our students to outcompete their peers at schools like Stanford and Berkeley for careers at top tech companies.”The student from D.C. moved to San Francisco in August 2020 to attend the school and took out about $9,500 in federal loans and more than $19,800 for a housing ISA. (Yahoo Finance reviewed loan material to verify the figures.)Heavy smoke from nearby wildfires covers the Golden Gate Bridge and San Francisco on August 20, 2020, as seen from the Marin Headlands in Sausalito, California. (Photo by Ezra Shaw/Getty Images)According to a source familiar with the matter who asked to be anonymous out of fear of professional retaliation, the nonprofit was designed to take over instruction after accreditation so that Make School could operate an independent program without leaning on Dominican for support.And while MakeSchool.org — the nonprofit side — would provide instruction, the for-profit side of Make School PBC would provide “marketing, curriculum, and R&D” to Dominican, according to Desai.The lawsuit that Yahoo Finance reported on July 1, 2021 — which includes 55 former students who took out ISAs — appeared to be a crushing blow to Make School’s plan. In an email to Yahoo Finance on July 1, Rossmann stated that the for-profit Make School was “in the process of shutting down.”The Make School co-founder reiterated that the for-profit side was “basically the financing arm of the school” and noted that it had “started an insolvency proceeding” known as an Assignment for Benefit of Creditors (ABC), which has been defined as “a business-liquidation device that can provide a graceful exit strategy for an insolvent debtor as an alternative to formal bankruptcy.”Rossmann also noted that Make School PBC was “an empty shell” and that the nonprofit would assume “all operations” under new management.“Make School PBC has now handed over all operations of the bachelor’s program to a nonprofit, has cancelled its ISA program, and is winding down,” Rossmann stated to Yahoo Finance in a July 1 email. “The college will continue to exist, but under new management and without ISAs.”Make School Dean and Interim President Dr. Anne Spalding declined to speak on the record. Jeremy Rossmann appearing on a podcast posted on YouTube talking about Make School.’Make School’s financing was predatory,’ former student saysThe lawsuit involves students who had attended Make School from 2016 to 2018 and took out ISAs from Make School and ISA provider Vemo Education. Many students found the ISAs to be deceptive given that the amount of money borrowed ended up being exorbitant, and students were burdened with heavy levels of repayment when they found a job.“It is easy, with the benefit of hindsight, for me to say that Make School’s financing was predatory with the difference between the $30,000 per year sticker price for students with money versus the $100,000 cost that I was faced with coming from a working class background,” Faith Chikwekwe, who attended the school from August 2018 to June 2019, told Yahoo Finance.“Make School fraudulently induced hundreds of students and young people in their late teens and early 20s to sign these unconscionable income share agreements, and once students quite bravely stood up to Make School’s deceptive business practices, it came to light that Make School had grossly mismanaged the company and had no intention of making it right by students,” Melody Sequoia, an attorney at Sequoia Law Firm representing the students, told Yahoo Finance. “Instead, Make School bailed on its own students and left them in mountains of debt.”The CFPB has also started looking into ISAs with a recent enforcement action against one provider.

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CFPB examines college credit card agreement decline – Financial Regulation News

A new report from the Consumer Financial Protection Bureau (CFPB) said the market for college credit cards continued its general declining trend in 2020.

The 12th annual college credit card report found that agreements with alumni associations made up the largest share of the market in terms of the number of agreements, accounts and amounts of payments made by issuers to their counterparties. The report revealed that the total volume of payments by issuers decreased to $20,882,930, from $24,980,457 in 2019 while 10 percent of active 2019 agreements were terminated during the year.
“The CFPB remains steadfast in its efforts to ensure our financial markets work for consumers, responsible providers, and the economy as a whole, especially for students,” CFPB Acting Director Uejio said. “Our duty to collect and publish data on these credit card agreements supports transparency and an informed public.”
The report was issued in accordance with Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) requirements. The CARD Act requires credit card issuers to annually submit to the CFPB the terms and conditions of any college credit card agreement in effect at any time during the preceding calendar year between an issuer and an institution of higher education.

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Analysis | Cyber insurance may not be making companies more secure

Cyber insurance companies are often more reactive than proactive

Insurers are sometimes doing more harm than good as U.S. companies are pummeled with ransomware and other cyberattacks.

Yes, these firms provide policies that pay out in the event of a cyber attack. But often, there’s insufficient focus on prevention.

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For example:

Some insurers don’t verify companies are doing what’s necessary to prevent such attacks in the first place. That’s similar to providing fire insurance without ensuring a company has functioning sprinklers and fire extinguishers.
In other cases, insurers agree to cover companies that represent good cyber risks, but they don’t check whether those companies are keeping their protections up to date as cyber threats grow and evolve.

Got insurance?

As of now, there’s no industry standard for how well a company must be protected to get cyber insurance. 

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“People view cyber risk as they would the risk from a hurricane or wind damage. But it’s not like that,” Vishaal Hariprasad, CEO of the cyber insurance firm Resilience, told me. “It’s driven by humans, so you have to always be updating. You have to have a mind-set of continuous controls and continuous maturation.”

The upshot: Insurers are paying out for more and more cyberattacks. The cost of those attacks is driving up cyber insurance premiums, making it harder for small- and medium-sized organizations to afford coverage. And there’s little incentive for companies that already have cyber insurance to do more than the bare minimum to protect themselves. 

Benchmarks

Hariprasad was one of four insurance executives who joined a White House cybersecurity summit with industry leaders last month. 

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During the summit, Hariprasad urged government officials to help the cyber insurance industry develop a common set of cybersecurity standards for their customers, he told me. 

Since the meeting, executives from the Commerce Department’s National Institute of Standards and Technology have kept in touch with the insurance firms about how government data and standards can contribute to those benchmarks, he said. 

“Any one company increasing their cyber hygiene is great, but if everyone in aggregate meets a standard baseline that makes attacks much harder,” he said. 

All cyber insurers impose some requirements on their customers, but they vary widely in how rigorous those requirements are and how extensively the insurer verifies companies are actually meeting them. 

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Until recently, insurers could impose less rigorous cyber standards and verification procedures and still not pay out too much in claims. That’s generally changed with a surge of ransomware attacks in recent years. Those attacks, in which hackers lock up a victim’s computers and demand a payment to unlock them, can be far more costly and damaging than standard data breaches. 

Money, money, money

Ransom payments from companies increased 341 percent to a total of $412 million during 2020, according to blockchain research firm Chainalysis.

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Even if victims don’t pay a ransom, they frequently must pay large sums of money to replace infected computers and other equipment, as well as the costs of lost business and lawsuits that result from the breach. 

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Between 2019 and 2020, cyber insurers charged companies more for premiums and still lost a greater percentage of those payments in insurance claims, according to an annual study by the insurance firm Aon. 

Premiums increased 21 percent during that time. Meanwhile, insurers paid back 67 percent of 2020 premiums in claims compared with 44 percent in 2019. 

Moving forward

Ideally, the insurer requirements would be based on general cybersecurity principles that government and industry broadly agree on, Hariprasad said. 

Those include patching digital bugs quickly, requiring multiple authenticating procedures before employees can access company networks and limiting people to just accessing the networks and data they need for their jobs. 
But those requirements should be tailored for companies of different sizes and in different industries with different sorts of digital vulnerabilities. 

Insurers could also play a more active role, sharing information about new threats with their customers and ensuring they’re protected, Hariprasad said. 

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“People respond to financial triggers and that’s the value of insurance,” he said. “If we properly tailor products and offerings, we can provide the right data-driven incentives [for companies to protect themselves].”

The keys

Apple patched a bug used by NSO Group’s Pegasus spyware to hack victims

Hackers have been able to secretly infect Apple iPhones, MacBooks and Apple Watches by exploiting the bug since February, Craig Timberg, Drew Harwell and Reed Albergotti report. The hack could renew pressure on NSO Group and the Israel government, which approves export licenses for Pegasus.

“We wouldn’t have discovered this exploit if NSO’s tool wasn’t used against somebody they shouldn’t be targeting,” said John Scott-Railton, a researcher for Citizen Lab, which is based at the University of Toronto’s Munk School of Global Affairs and Public Policy and alerted Apple to the bug. 

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NSO’s customers use Pegasus in targeted attacks, including against dissidents and journalists, according to reporting by The Washington Post and media partners. Apple stressed in a statement that the bug was “not a threat to the overwhelming majority of our users” but said the company will “continue to work tirelessly to defend all our customers.” 

NSO Group declined to respond in detail to Citizen Lab’s report, only saying that it “will continue to provide intelligence and law enforcement agencies around the world with lifesaving technologies to fight terror and crime.”

Today, House lawmakers debate giving CISA hundreds of millions of dollars

The House Homeland Security Committee will discuss a proposal to give the Cybersecurity and Infrastructure Security Agency between $655 million and $865 million as part of a $3.5 trillion reconciliation package of government funding priorities. 

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The largest chunk of proposed funding would give the agency $400 million to implement President Biden’s May cybersecurity executive order, which aimed to boost the federal government’s cyber defenses. 

Other major components include:

$210 million for general operations, proposed by Chairman Bennie G. Thompson (D-Miss.)
$100 million for cybersecurity workforce development and education efforts
$50 million to expand and operate a program that flags potential security flaws for organizations
$50 million for cybersecurity information sharing and response resources for state, local, tribal and territorial governments
$25 million for a national campaign to promote multifactor authentication
$20 million to expand international cooperation on protecting critical infrastructure
$10 million to support the development of plans to maintain and secure the U.S. economy in response to a “significant event”

President Biden will nominate a surveillance critic to a post on the Federal Trade Commission

The nomination of law professor Alvaro Bedoya will boost expectations that the FTC will heavily scrutinize companies that sell facial recognition and other surveillance technologies, Drew Harwell reports. Bedoya, the founder of Georgetown Law’s Center on Privacy & Technology, has long worked to highlight the negative effects of emerging surveillance technologies on marginalized communities.

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Bedoya would replace FTC Commissioner Rohit Chopra, who Biden nominated to lead the Consumer Financial Protection Bureau. Chopra is waiting to be confirmed by the Senate. 

Government scan

Kiersten Todt is joining CISA as chief of staff, the agency announced. The role will focus on long-range planning “to enable and empower CISA’s workforce,” among other priorities, the agency said. 

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Todt was executive director of former president Barack Obama’s Commission on Enhancing National Cybersecurity in 2016. She also helped develop the National Institute of Standards and Technology’s cybersecurity framework for industry in 2014. She previously worked as managing director of the Cyber Readiness Institute and president of the cybersecurity consulting firm Libert Group Ventures. 

Cyber insecurity

Encryption wars

Daybook

Gen. Paul Nakasone, who leads the NSA and U.S. Cyber Command; National Cyber Director Chris Inglis and others speak on the second day of the two-day Intelligence and National Security Summit today.
Chris Krebs, the former director at the Cybersecurity and Infrastructure Security Agency, keynotes the Insider Risk Summit today.
Rep. John Katko (R-N.Y.), the top Republican on the House Homeland Security Committee, and Google executive Jeanette Manfra, a former CISA official, discuss cybersecurity at a Washington Post Live event today at 12:30 p.m.
Stanford University’s Program on Democracy and the Internet hosts a webinar on E.U. technology and cybersecurity proposals on Thursday at noon.
Rep. Jim Langevin (D-R.I.), Southern Company CEO Tom Fanning and others discuss cyber threats to critical infrastructure at a Carnegie Endowment for International Peace event on Friday at 12:30 p.m.
Former Undersecretary of State Keith Krach and former U.S.

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