In CFPB v. RD Legal Funding, Inc., 17-CV-890 (U.S.D.C. S.D. N.Y. June 21, 2018), here, Judge Preska disagreed with the DC Circuit’s PHH decision and found the CFPB’s structure unconstitutional. In reaching the question of the constitutionality of Title X of Dodd-Frank, which established the CFPB as an “independent bureau” within the Federal Reserve System, 12 U.S.C. § 5491(a), the… Read More
A copy of Erik Kemp's and Scott Hyman's article "The Consumer Financial Protection Bureau Regulates Pay-by-Phone 'Convenience” Fees'", CFSC Newsletter: ABA Business Law Section, (March 2018) can be found here: https://www.americanbar.org/content/dam/aba/administrative/business_law/newsletters/CL230000/full-issue-201803.authcheckdam.pdf Read More
In CFPB v. Weltman, Weinberg & Reis Co., L.P.A., 2017 WL 6042221, at *1–2 (N.D.Ohio, 2017), Judge Nugent denied the CFPB's motion for a protective order that would have prevented the deposition of (former) Director Cordray from taking place, clearing the way for (former) Director Cordray's deposition. However, since the filing of the protective order, Mr. Cordray has resigned from… Read More
The Senate voted 51 to 50 late Tuesday to repeal the Consumer Financial Protection Bureau’s rule banning mandatory arbitration clauses in financial contracts. Vice-President Pence cast the deciding vote to break the tie. Senate Republicans relied on the Congressional Review Act ("CRA") to overturn the CFPB's anti-Arbitration Rule. The CFPB's Rule had been challenged by the Department of Treasury… Read More
The CFPB just issued its Summer Supervisory Highlights regarding complaints lodged against debt collection, a copy of which can be found here. The CFPB notes that its examiners' reviewed numerous companies, both within the united states and from foreign countries, and highlighted the following types of common violations: Unauthorized communications with third parties False representations made to authorized credit card users… Read More
In Consumer Financial Protection Bureau v. Navient Corporation, No. 3:17-CV-101, 2017 WL 3380530 (M.D. Pa. August 4, 2017), Judge Mariani rejected constitutional challenges to the CFPB’s structure. Navient first argues that the CFPB lacks statutory authority to bring an enforcement action without first engaging in rulemaking to declare a specific act or practice unfair, deceptive, or abusive. (Doc. 29 at… Read More
On July 25, 2017, the CFPB issued a Compliance Bulletin cautioning against misrepresenting and adding convenience fees to pay-by-phone payment options. A copy of the bulletin is here and our take on the CFPB's bulletin is here. For further questions on convenience fees, please contact Erik Kemp at ek@severson.com or Scott Hyman at sjh@severson.com Read More
A copy of the long-awaited PHH decision is here. Read More
Today, the CFPB issued a Notice of Proposed Rulemaking with regard to consumer arbitration, here: CFPB_Arbitration_Agreements_Notice_of_Proposed_Rulemaking. The CFPB's press release is here: CFPB Press Release. The CFPB proposal is seeking comment on a proposal to prohibit companies from putting mandatory arbitration clauses in new contracts that prevent class action lawsuits. The proposal would open up the legal system to consumers… Read More
News Release: https://protect-us.mimecast.com/s/QQeeBDuJmEDSg Letter to Financial Institutions: http://files.consumerfinance.gov/f/201602_cfpb_letter-to-banks-on-lower-risk-accounts.pdf Bulletin: http://files.consumerfinance.gov/f/201602_cfpb_supervisory-bulletin-furnisher-accuracy-obligations.pdf Read More
In remunerating borrowers, the Bureau thus faced a dilemma. Political exigency required the Bureau to design a process that would ensure that a sufficient number of alleged victims would be identified as eligible claimants; after all, if fewer claimants received checks than Director Cordray initially announced, the validity of the Bureau’s disparate impact methodology would be called into question. But,… Read More
In Consumer Financial Protection Bureau v. CashCall, Inc., 2015 WL 9591569, at *1-2 (C.D.Cal., 2015), Judge Walter said that the CFPB was not alleging an ipso facto rule, namely that a state court violation automatically constitutes a UDAAP violation. Accordingly, Judge Walter allowed the Complaint to survive a pleadings challenge. Defendants' primary argument for dismissal is based on a mischaracterization of the… Read More
In CFPB v Hanna-Stipulated Order, the CFPB reached a settlement with a large debt collection law firm. According to the CFPB: The CFPB lawsuit had alleged that the defendants rely on deceptive court filings and faulty evidence to churn out lawsuits. The order, if approved by the court, would bar the firm and its principal partners from illegal debt-collection practices,… Read More
The Agenda can be found at (http://www.consumerfinance.gov/blog/fall-2015-rulemaking-agenda/). Read More
On Wednesday, the U.S. House of Representatives passed H.R. 1737 ("Reforming CFPB Indirect Auto Financing Guidance Act"), designed to repeal the CFPB's March 2013 bulletin covering indirect auto finance. The Bill "declares without force or effect Consumer Financial Protection Bureau (CFPB) Bulletin 2013-02 (Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act), published March 21, 2013" and "amends… Read More
The CFPB fired another shot across the bow today, issuing a proposal for banning class-action waivers in consumer arbitration clause. A copy of the proposal can be found here: http://files.consumerfinance.gov/f/201510_cfpb_small-business-review-panel-packet-explaining-the-proposal-under-consideration.pdf The press release, found here (http://www.consumerfinance.gov/newsroom/cfpb-considers-proposal-to-ban-arbitration-clauses-that-allow-companies-to-avoid-accountability-to-their-customers/) stated: Today the Consumer Financial Protection Bureau (CFPB) announced it is considering proposing rules that would ban consumer financial companies from using “free pass”… Read More
In Consumer Financial Protection Bureau v. Frederick J. Hanna & Associates, P.C., Judge Totenberg rejected a debt collection law firm's constitutional challenge under the Noerr-Pennington doctrine and the equal protection doctrine to the CFPB's authority to bring claims against it. As to the latter, the District Court found no equal protection violation for placing debt collection law firm's clients on different… Read More
The CFPB issued its Final Rule today to supervise larger participant nonbank automotive finance companies, which is largely unchanged from their September 2014 proposal. The Final Rule retains the 10,000 transaction threshold, meaning that nonbank auto finance companies that make, acquire, or refinance 10,000 or more loans or leases in a year will come under CFPB supervision and enforcement and… Read More
The staff of the Federal Trade Commission has provided its 2014 Annual Financial Acts Enforcement Report to the CFPB on enforcement and related activities regarding Regulation Z (Truth in Lending Act), Regulation M (Consumer Leasing Act), and Regulation E (Electronic Fund Transfer Act). The report on TILA, CLA and EFTA addresses, among other things, the FTC’s enforcement actions related to… Read More
The Consumer Financial Protection Bureau (CFPB) released its larger participant rule for nonbank vehicle finance companies yesterday before a scheduled field hearing in Indianapolis. See CFPB Larger Participant Supervisor Highlights; CFPB Larger Participante Proposed Rule; and CFPB Larger Participant Rule Proxy Information. The CFPB defines “larger participants” as companies making, acquiring, or refinancing 10,000 or more loans or leases in a… Read More
