Consumer Financial Services Law Monitor

Consumer Financial Services Law Monitor

monitoring the financial services industry to help companies navigate through regulatory compliance, enforcement, and litigation issues

Keith J. Barnett

Keith J. Barnett

Blog Role:
Editor – State Attorneys General, CFPB & FTC; Payment Processing & Credit Cards

CFS Value:
Keith Barnett is a litigation, investigations (internal and regulatory), and enforcement attorney with more than 15 years of experience representing clients in the financial services and professional liability industries.

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Court Finds Terrason Spinks and Jet Processing Liable for $281M IWorks Scheme

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 18, following a bench trial, the United States District Court for the District of Nevada found defendants Terrason Spinks and his company, Jet Processing, Inc., jointly and severally liable for $280,911,870 in consumer injury caused by violations of the Federal Trade Commission Act (“FTC Act”) and Electronic Fund Transfer Act (“EFTA”).  This case… Continue Reading

DOJ Permits Banks to Create Real-Time Payment System

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On September 21, the Department of Justice cleared the way for a group of the twenty-four largest U.S. banks to create a real-time payment system that will permit immediate transfer of funds between financial institutions.  The system was proposed by The Clearing House Payments Co., LLC (“TCH”), a joint venture between the twenty-four banks that… Continue Reading

Operation Choke Point Terminated

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
The U.S. Department of Justice announced the end of Operation Choke Point in an August 16 letter to the Chairman of the House Judiciary Committee.  Operation Choke Point, which began under the Obama Administration, sought to prohibit banks and other financial firms from giving so-called “bad actors” access to bank accounts and payment processing systems. … Continue Reading

FTC Files Complaint Against Merchants and ISO for Alleged Credit Card Laundering

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On July 28, the Federal Trade Commission filed a lawsuit in the United States District Court for the District of Arizona against several merchants, an Independent Sales Organization (“ISO”), and their affiliated companies (a total of twelve defendants) alleging that they had engaged in credit card laundering in violation of Sec. 13(b) of the FTC… Continue Reading

CFPB Prioritizes Redlining, Loan Servicing, and Small Business Lending

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
In its fifth annual fair lending report, the Consumer Financial Protection Bureau highlighted redlining, mortgage and student loan servicing, and small business lending as areas of focus for 2017.  CFPB Director Richard Cordray specifically noted these areas for enhanced enforcement actions, describing them as “significant or emerging fair lending risk to consumers.” “In 2017 we… Continue Reading

Chipotle Discloses Data Security Breach Related to Network Supporting Payment Processing for Restaurant

Posted in ALL CFS Blog Entries, Cyber Security, Information Governance & Privacy, Payment Processing & Cards
In its Form 10-Q dated April 25, 2017 for the quarterly period that ended on March 31, 2017, Chipotle Mexican Grill, Inc. announced that it had detected a data security breach in its electronic processing and transmission of confidential customer and employee information.  Specifically, Chipotle’s information security team detected unauthorized activity on the network that… Continue Reading

State Banking Regulators File Suit Challenging OCC Fintech Charter

Posted in ALL CFS Blog Entries, Featured Posts, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On April 26, a group of state bank regulators filed a lawsuit to block the Office of the Comptroller of the Currency from issuing special charters to fintech firms.  The regulators argue that the OCC fintech charter will improperly displace already effective state laws regulating fintech companies, that the OCC lacks the authority to issue… Continue Reading

CFPB Files Suit Against Four Online Lenders Operated by Native American Tribe

Posted in ALL CFS Blog Entries, Featured Posts, State Attorneys General, CFPB, & FTC
On April 27, the Consumer Financial Protection Bureau filed a lawsuit in an Illinois federal court against four online installment loan companies operated by a California Native American tribe.  Although the tribe operates the installment loan companies, the CFPB’s complaint alleges that the defendants are not “arms of the tribe” and therefore should not be… Continue Reading

U.S. District Court Dismisses CFPB Case Against Payment Processor

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On March 17, the U.S. District Court for the District of North Dakota granted Intercept Corporation (“Intercept”), Bryan Smith, and Craig Dresser’s Motion to Dismiss the Consumer Financial Protection Bureau’s (“CFPB”) Complaint in the case between the CFPB and Intercept. The decision to grant the Motion to Dismiss marks the first time that the Bureau… Continue Reading

Join Us on March 23 for a Complimentary Webinar on Electronic Fund Transfer Act (EFTA) – Latest Trends and Developments

Posted in ALL CFS Blog Entries, CFS Events, Payment Processing & Cards
Over the past few years, Regulation E, which implements the Electronic Fund Transfer Act, has been cited by federal regulators in rulemaking, enforcement actions and bulletins. The CFPB has not only used the EFTA in its rulemaking concerning prepaid accounts, but it has filed enforcement actions for alleged violations of EFTA and issued bulletins concerning… Continue Reading

CFPB Asks FL District Court to Approve $107M Settlement

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On February 24, the Consumer Financial Protection Bureau asked a federal district court in Florida to approve a $107 million settlement to resolve claims against Orion Processing LLC.  The Bureau alleged the bankrupt company engaged in a debt-relief scheme that cost consumers millions.  The CFPB filed suit against Orion in August 2015, alleging that the… Continue Reading

CFPB Orders MasterCard and UniRush to Pay $13 Million

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On February 1, the Consumer Financial Protection Bureau ordered payment card companies MasterCard and UniRush to pay $10 million in restitution and a $3 million fine related to service breakdowns that left customers unable to access their funds.  “MasterCard and UniRush’s failures cut off tens of thousands of vulnerable consumers from their own money, and… Continue Reading

Join Us on February 22-24 for the NACHA Payments Innovation Alliance Meeting in Los Angeles

Posted in ALL CFS Blog Entries, CFS Events, Payment Processing & Cards
We are proud to announce that Troutman Sanders partner Keith Barnett will be a featured speaker at the upcoming National Automated Clearing House Association’s (“NACHA”) Payments Innovation Alliance Meeting at the Omni Los Angeles Hotel at California Plaza on February 24. Keith will speak on a panel titled, Regulatory Landscape for 2017 – What Can You Expect?,… Continue Reading

Join Us on February 9 for the ETA & BAFT for International Payments Policy Day in Washington, DC

Posted in ALL CFS Blog Entries, CFS Events, Payment Processing & Cards
We are proud to announce that Troutman Sanders partner Keith Barnett will be a featured speaker at the upcoming Electronic Transactions Association (“ETA”) and Bankers Association for Finance and Trade (“BAFT”) International Payments Policy Day, “A New World: The Changing Policy Landscape for International Payments and Financial Technology,” at the Washington, DC offices of Troutman Sanders on… Continue Reading

Democratic AGs File Motion to Intervene in CFPB “For Cause” Removal Case

Posted in ALL CFS Blog Entries, Featured Posts, State Attorneys General, CFPB, & FTC
On January 23, Democratic attorneys general from 16 states and the District of Columbia filed a motion to intervene in the closely watched PHH Corp. v. Consumer Financial Protection Bureau case, currently pending in the U.S. Court of Appeals for the District of Columbia.  As we reported here and here, in October 2016, a divided… Continue Reading

Republican Senators Press Vice President-Elect Pence for Removal of CFPB Director

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On the same day that House Democrats wrote to President-elect Donald Trump to defend controversial Consumer Financial Protection Bureau Director Richard Cordray, two Republican senators sent a letter to Vice President-elect Mike Pence to press for his removal.  The letter, signed by Ben Sasse (Neb.) and Mike Lee (Utah), requested that Trump dismiss Cordray “promptly… Continue Reading

House Democrats Urge President-Elect Trump Not to Remove CFPB Director

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On January 9, twenty-one Democrats from the House of Representatives sent a letter to President-elect Trump in defense of controversial Consumer Financial Protection Bureau Director Richard Cordray, urging Trump not to remove Cordray from his post.  The letter began by noting that no President has ever removed an independent agency head for cause and threatened… Continue Reading

District Court Rejects TILA Suit as “Litigation Out of Control”

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On December 22, the United States District Court for the Eastern District of Pennsylvania entered judgment in favor of the defendant in an action involving a Truth in Lending Act claim, and issued a stern rebuke to the plaintiff and his counsel, instituting Rule 11 proceedings and describing the case as “litigation out of control.”   … Continue Reading

California Supreme Court Finds Two Payday Lenders Not Immune From State Lending Laws

Posted in ALL CFS Blog Entries, Mortgage Lenders & Servicers, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On December 22, the California Supreme Court in Owen v. Miami Nation Enterprises, held that payday lending companies failed to prove by a preponderance of the evidence that they were “arms of” Indian tribes. Therefore, the lenders were not immune from complying with a California state lending law.  In its decision, the Court reaffirmed well-settled law… Continue Reading

CFPB Updates Rulemaking Agenda

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On December 2, the Consumer Financial Protection Bureau issued a statement highlighting its updated rulemaking agenda for Fall 2016.  The Bureau specifically mentioned a number of supervisory and developmental initiatives scheduled for implementation in the coming months. In the area of mortgages, the CFPB expects to finalize proposed tweaks to the Know Before You Owe… Continue Reading

Southern District of New York Relies on Spokeo to Dismiss TILA Credit Card Suit

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On December 16, U.S. District Judge Paul A. Engelmayer dismissed a putative class action suit alleging that Nordstrom department store’s credit card account disclosures violated the Truth in Lending Act (“TILA”).  Relying on the Supreme Court’s decision in Spokeo, Inc. v. Robins, the Court concluded that the plaintiff did not have standing to bring the… Continue Reading

CFPB Executes Consent Order Against Lender for Misleading Advertising and Violations of EFTA

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On December 16, the Consumer Financial Protection Bureau executed a consent order with Moneytree, Inc., whereby Moneytree was required to pay $255,000 in redress and an additional $250,000 in civil monetary penalties arising out of the Bureau’s allegations that Moneytree violated the Consumer Financial Protection Act (“CFPA”) and the Electronic Funds Transfer Act (“EFTA”).  According… Continue Reading

CFPB Executes Second Consent Order With Military Credit Services

Posted in Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On December 20, the Consumer Financial Protection Bureau executed a consent order with Military Credit Services, LLC, whereby the lender was required to pay a $200,000 civil monetary penalty, implement certain compliance measures, and hire an independent consultant to review the company’s  compliance with federal laws.  The order arose out of Military Credit Services’ alleged… Continue Reading

CFPB Files Four Lawsuits Against Lenders for Violation of Truth In Lending Act

Posted in ALL CFS Blog Entries, Mortgage Lenders & Servicers, State Attorneys General, CFPB, & FTC
On December 19, the Consumer Financial Protection Bureau filed four nearly identical lawsuits against lenders based in the Commonwealth of Virginia.  Copies of the complaints can be found here, here, here, and here.  The complaints allege that the defendants violated the Truth in Lending Act and Consumer Financial Protection Act by charging borrowers for interest,… Continue Reading