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

Ethan G. Ostroff

Ethan G. Ostroff

Blog Role:
Editor-in-Chief
Contributor – State Attorneys General, CFPB & FTC; Credit Reporting & Data Brokers

CFS Value:
Ethan specializes in the defense of consumer actions, including class and mass actions, general business litigation, as well as regulatory compliance.

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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, Featured Posts, 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 Sues Law Firms for Debt Relief Fees Disguised as Bankruptcy Fees

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
The Consumer Financial Protection Bureau recently sued three law firms in the United States District Court for the Central District of California for collecting advance fees from consumers seeking debt relief.  CFPB Director Richard Cordray stated that “[t]he defendants exploited consumers who were already suffering financial difficulties by tricking them into paying steep, illegal fees.”… Continue Reading

Validation Notice Including Request for Payment and Identifying Creditor by Acronym Does Not Violate FDCPA

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
The United States District Court for the Southern District of California recently dismissed all of a plaintiff’s claims in the putative class action Matthew Stuppiello v. Southwest Credit Systems, L.P.   The Court held that a validation notice does not violate the Fair Debt Collection Practices Act by including a request for payment “and explain[ing] that… Continue Reading

CFPB Takes Action Against Law Firm Debt Collectors for Lack of Meaningful Involvement

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On January 9, 2017, the Consumer Financial Protection Bureau (CFPB) entered a Consent Order against Works & Lentz, Inc., Works & Lentz of Tulsa, Inc., two medical debt collection law firms, and their president, Harry A. Lentz, Jr., for the defendants’ violations of the Fair Debt Collection Practices Act (FDCPA) and the Furnisher Rule (Regulation… 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

More Than One Call Per Day is Not Enough to Violate FDCPA; Consent Provided to Creditor Extends to Debt Collector Under TCPA

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts
The United States District Court for the District of New Jersey recently held in Samuel Chisholm v. AFNI, Inc. that a debt collector “could not reasonably be found to violate” the Fair Debt Collection Practices Act by calling a consumer 18 times on his cell phone over the course of 13 days.  All calls were… Continue Reading

Attorney Collecting Debt For a Debt Collector May Not Rely on Client’s Validation Notice

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
A district court in the Seventh Circuit has denied a motion to dismiss filed by a collection attorney acting on behalf of a debt collector client, holding that the plaintiff in the case could pursue her claim based on the attorney’s failure to provide his own § 1692g validation notice in an initial communication, even though… Continue Reading

What’s In a Barcode?: District Court in Eleventh Circuit Adopts Benign Language Exception for Debtor’s Account Number

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
A district court in the Eleventh Circuit has joined the Fifth and Eighth circuits, along with a host of district courts throughout the country, in adopting the “benign language” exception to Section 1692f(8) of the Fair Debt Collection Practices Act, and has dismissed a claim based on a collection letter with a visible barcode containing… Continue Reading

Troutman Sanders Attorney Selected to Serve in Attorney State Chair Program for ACA International

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
Ethan Ostroff has been selected by ACA International (Association of Credit and Collection Professionals) to serve in the Attorney State Chair Program for the Commonwealth of Virginia.  The Attorney State Chair Program provides ACA International units and their members with access to an attorney licensed to practice law in their state.  These attorneys have volunteered… Continue Reading

Eastern District of New York Rules That Fee May Be Collected with Principal Balance, Requesting Prompt Contact is Permissible

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
In Igor Vayngurt v. Southwest Credit Systems, L.P., the Eastern District of New York ruled that a debt collector did not violate the Fair Debt Collection Practices Act by attempting to obtain payment of a collection fee at the same time as the principal balance of the debt and requesting prompt contact in the initial… Continue Reading

Extra Assurances Not Required: Collector Not Liable for Letter with No Statement Assuring that Non-Interest Charges and Fees Would Not Accrue

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
The United States District Court for the Eastern District of New York has dismissed a debtor’s claim that a collection letter stating “Non-interest Charges & Fees: $0.00” was misleading under the Fair Debt Collection Practices Act because an unsophisticated consumer could mistakenly believe that non-interest charges and fees might be added in the future.  The… Continue Reading

Fourth Circuit Rejects FDCPA Liability For Filing Proofs of Claim On Time-Barred Debt

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 25, 2016, the Fourth Circuit held in In re Eric Dubois, Case No. 15-1945, that filing a proof of claim based on a time-bared debt in a Chapter 13 bankruptcy does not violate the Fair Debt Collection Protection Act (FDCPA) when the applicable state statute of limitations does not extinguish the debt. This… Continue Reading

CFPB Introduces New Protections for Borrowers

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts, Mortgage Lenders & Servicers, State Attorneys General, CFPB, & FTC
On August 4, 2016, the CFPB issued its final mortgage servicing rule pursuant to Regulation X of the Real Estate Settlement Procedures Act (RESPA) and Regulation Z of the Truth in Lending Act (TILA). The final rule provides greater foreclosure protections to borrowers and requires further transparency between borrowers and mortgage servicers. The final rule… Continue Reading

Ninth Circuit Rules Every Debt Collector Must Send Verification Notice

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
In a case of first impression, the U.S. Court of Appeals for the Ninth Circuit held in July that all debt collectors must send debtors a verification notice.  “In other words, if there are multiple debt collectors that try to collect a debt, each one must send the required notice after its first communication with… Continue Reading

House Financial Services Committee Releases Draft of Bill to Replace Dodd-Frank

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts
On June 23, a discussion draft of “The Financial CHOICE Act” was released by the House Financial Services Committee.  A primary purpose of this bill is to replace the Dodd-Frank Act, including reforming financial institution regulations and significantly changing the structure and authority of the Consumer Financial Protection Bureau.    Specifically, the CFPB’s leadership would change… Continue Reading

CFPB Argues Violation of Statutory Right against Misrepresentation is in itself Concrete Injury

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
In Bock v. Pressler & Pressler, LLP, the U.S. Court of Appeals for the Third Circuit requested supplemental briefs applying Spokeo, Inc. v. Robins to the Article III standing issue at bar. As we previously reported, the Court requested targeted discussion on whether a violation of the statutory right at issue was by itself a… Continue Reading

House Bill Introduced Requiring Changes to CFPB Complaint Database

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On June 9, Representative Matt Salmon (R-AZ) introduced legislation to impose new requirements on how the Consumer Financial Protection Bureau makes consumer complaints public in the Consumer Complaint Database. According to Salmon, the Consumer Financial Protection Bureau (“CFPB”) Data Accountability Act “would improve the current database by requiring the CFPB to verify the facts of… Continue Reading

CFPB Budget Reform Approved By House Financial Services Committee

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On April 13, the House Financial Services Committee approved a bill by a 33-20 vote that is intended to end direct funding of the CFPB by the Federal Reserve and require the Bureau to be subject to the regular congressional appropriations process.  This Committee joins others in approving similar measures that would institute a variety… Continue Reading

First 2016 CFPB Bulletin Reinforces Focus on Furnishers

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
I.   Background On February 3, 2016, the Consumer Financial Protection Bureau (CFPB) issued a bulletin warning companies that furnish information on consumers to consumer reporting agencies (CRAs) yet again of the need to have adequate policies and procedures. This bulletin makes clear that any company that supplies information to CRAs is in an area of top… Continue Reading

Please Join Us at DBA International’s Annual Conference – Moving Forward Together

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Debt Buyers & Collectors
On February 9-11, 2016, DBA International will host its annual conference – Moving Forward Together – at the Aria Resort & Casino in Las Vegas. We are pleased to announce that two of our Consumer Financial Services lawyers will serve as faculty at this year’s event. David Anthony will present “The Devil is in the… Continue Reading

The CFPB Issues Warning and Guidance on Obtaining Consumer Authorization for Preauthorized Electronic Funds Transfers that Confirms a Recording of a Consumer’s Oral Authorization Can Satisfy Regulation E’s Requirements

Posted in ALL CFS Blog Entries, Auto Finance, Debt Buyers & Collectors, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On November 24, 2015, the Consumer Financial Protection Bureau (CFPB) issued a Compliance Bulletin (2015-06), warning companies that they must ensure that consumer authorization is obtained before automatically debiting a consumer’s account and that required notifications to consumers must clearly describe the terms of the preauthorized electronic funds transfers (EFTs). Importantly, for the first time… Continue Reading

Consumer Litigation Spikes in October, But Debt Collection Complaints to CFPB Plummet

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
According to the October debt collection litigation and complaint statistics report from WebRecon, consumer litigation in October under the FDCPA, TCPA, and FCRA marked the first time since September 2011 that an increase from both the prior month and year-to-date occurred.  “For the first time in several years, overall consumer litigation is up dramatically,” with… Continue Reading

The FTC Coordinates with Federal, State, and Local Authorities in Nationwide Attack Against Abusive Debt Collectors

Posted in ALL CFS Blog Entries, Auto Finance, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On November 4, 2015, the Federal Trade Commission (FTC), 47 State Attorneys General, and other state and local law enforcement authorities from around the country announced the first coordinated federal-state enforcement initiative targeting deceptive and abusive debt collection practices. The initiative, named Operation Collection Protection, aims to crackdown on collectors who use illegal tactics such… Continue Reading