It has been an extraordinary 365 days for consumer financial services law. I cannot recall a year where so many states introduced legislation or proposed regulations or rules impacting the credit industry. At the federal level, proposed rules for the Fair Debt Collection Practices Act were (finally) released and California also proposed regulations under the California Consumer Privacy Act.
Posts published in “CFPB”
Consumer Financial Protection Bureau
The federal banking regulators and the CFPB recently issued an “Interagency Statement on the Use of Alternative Data in Credit Underwriting,” stating in sum that the agencies “encourage responsible use” of alternative data, especially in the context of credit underwriting.
The Consumer Financial Protection Bureau has announced it will allow more time for comments on its Notice of Proposed Rulemaking to implement the Fair Debt Collection Practices Act. The CFPB has extended the comment period by 30 days to Sept. 18. Years in the making, if adopted the proposed rules would bring significant changes to the form and manner of consumer debt collection subject to the FDCPA. According to the CFPB, its proposal “would set clear, bright-line limits on the number of calls debt collectors may place to reach consumers on a weekly basis; apply prohibitions on harassment or abuse, false…
The U.S. Court of Appeals for the Ninth Circuit recently affirmed a trial court’s order requiring a law firm to respond to interrogatories and requests for production of documents pursuant to a civil investigative demand promulgated by the Consumer Financial Protection Bureau. In so ruling, the Ninth Circuit cited prior Supreme Court separation-of-power opinions which indicate that the bureau’s restriction permitting removal of its director only by the president “for cause” did not violate the Constitution’s separation of powers doctrine to conclude that its structure was constitutionally permissible. The Ninth Circuit also held that the civil investigative demand was proper…
An online lender that extends payday and unsecured installment loans reached a settlement with the Consumer Financial Protection Bureau regarding “unfair, deceptive, or abusive acts or practices” allegations that the lender unlawfully debited consumers’ bank accounts without authorization and failed to honor loan extensions to its customers. Under the terms of the settlement and consent order, the lender is barred from making or initiating electronic fund transfers without valid authorization, and must pay a $3.2 million civil monetary penalty. A copy of the consent order is available at: Link to Consent Order. The respondent, an online lender, extends and services…
The U.S. Court of Appeals for the Fifth Circuit held that a civil investigative demand (CID) issued by the Consumer Financial Protection Bureau did not adequately advise the respondent of the nature of the conduct constituting the alleged violation under investigation and the provision of law applicable to such violation. Accordingly, the Fifth Circuit reversed the ruling of the trial court granting the CFPB’s petition for an order to enforce the CID. A copy of the opinion in Consumer Financial Protection Bureau v. The Source for Public Data, L.P. is available at: Link to Opinion. Under 12 U.S.C. § 5562(c)(1), the…
The U.S. District Court for the Northern District of Ohio issued its highly anticipated ruling on July 25 in a CFPB enforcement action against an Ohio debt collection law firm, concluding that the firm’s attorneys were “meaningfully involved” in the collections process and entering judgment in favor of the law firm. The decision followed an advisory jury’s verdict, which found the law firm’s pre-suit collection letters contained “false, deceptive, or misleading representations or means in connection with the collection of a debt” while rejecting a claim that the firm’s attorneys were not meaningfully involved in the debt collection process in…
In a follow up to an advisory jury’s verdict, finding that a law firm’s pre-suit collection letters contained “false, deceptive, or misleading representations or means in connection with the collection of a debt” while rejecting a claim that the firm’s attorneys were not meaningfully involved in the debt collection process in violation of the federal Fair Debt Collection Practices Act, the accused law firm filed its proposed findings of fact and conclusions of law on June 29, arguing that if their legal services were good enough for Richard Cordray when he held the office of Attorney General of the State…
In a follow-up to an advisory jury’s verdict, finding that a law firm’s pre-suit collection letters contained “false, deceptive, or misleading representations or means in connection with the collection of a debt” while rejecting a claim that the firm’s attorneys were not meaningfully involved in the debt collection process in violation of the FDCPA, the CFPB filed its proposed findings of fact and conclusions of law on June 15, suggesting that the jury’s verdict was misguided. Instead, the CFPB asserted that the applicable facts and law support a conclusion that attorneys with the law firm were in fact not “meaningfully…
In the final few pages of a 108 page opinion of a motion to dismiss a complaint jointly filed by the Consumer Financial Protection Bureau (CFPB) and the Attorney General of the State of New York (NYAG), a Federal Judge sitting in the Southern District of New York declined to follow an earlier ruling from the Court of Appeals for the District of Columbia Circuit but instead adopted the dissent which held that “the CFPB is unconstitutionally structured because it is an independent agency that exercises substantial executive power and is headed by a single Director.” A copy of the…
By Brent Yarborough and Eric Rosenkoetter On June 13, the Bureau of Consumer Financial Protection issued a consent order with a holding company and its affiliated operating entities engaged in consumer lending. The consent order reflects the parties’ settlement of an administrative enforcement action that focused on the lenders’ debt collection and credit reporting practices. The lenders neither admitted nor denied the Bureaus’ findings or conclusions, but as part of the settlement they are required, among other things, to pay a civil money penalty of $5 million and to refrain from making in-person visits for collection purposes. This is the second consent order…
An advisory jury, empaneled pursuant to Federal Rule 39(c)(1), recently returned an inconsistent verdict after trial in an action brought by the Consumer Financial Protection Bureau last year challenging that attorneys of a law firm specializing in the collection of debts were not “meaningfully involved” in collection activities engaged in by the firm in violation of the federal Fair Debt Collection Practices Act. A copy of the complaint in Consumer Financial Protection Bureau v. Weltman, Weinberg & Reis Co., L.P.A. is available at: Link to Complaint. The jury determined that the law firm’s pre-suit collection letters contained “false, deceptive, or misleading representations or…