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

Tim J. St. George

Tim J. St. George

Blog Role:
Contributor – Credit Reporting & Data Brokers

CFS Value:
Tim specializes in the areas of business disputes and complex litigation in the financial services industry.

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Defendant Seeks To Stymie Plaintiff’s ‘False Pretense’ Claim Under the FCRA

Posted in ALL CFS Blog Entries, Background Screening
In Patel v. Comcast Corporation, plaintiff consumer Mounang Patel brought a purported class action lawsuit against defendant Comcast Corporation, arguing that Comcast unlawfully obtains background checks (also referred to as consumer reports) on consumers under false pretenses.  On July 17, Comcast moved to dismiss this class claim on the ground that Patel failed to allege… Continue Reading

Indiana Governor Issues Executive Order “Banning the Box”

Posted in ALL CFS Blog Entries, Background Screening
Indiana Governor Eric Holcomb has issued an executive order “banning the box” for jobs within the executive branch.  Effective July 1, applicants for employment in the executive branch will no longer be subject to inquiries about their criminal history at the initial application stage, unless the conviction for a specific crime would disqualify the applicant… Continue Reading

Arbitration Rule Compliance Date Set for March 19, 2018

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Featured Posts, State Attorneys General, CFPB, & FTC
Financial institutions with arbitration clauses in consumer contracts are on the clock. The Consumer Financial Protection Bureau’s (CFPB) new Arbitration Rule was published in the Federal Register today, with an effective date of September 18, 2017 and a compliance date of March 19, 2018. Absent congressional action or successful litigation challenge, those financial institutions that… Continue Reading

CFPB Issues Rule Banning Class Action Waivers In Arbitration Provisions

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Featured Posts, State Attorneys General, CFPB, & FTC
On July 10, 2017, the Consumer Financial Protection Bureau issued its long-awaited final rule banning class action waivers in arbitration provisions for covered entities, as well as requiring the covered entities to provide information to the CFPB regarding any efforts to compel arbitration. This rule is of significance to any financial services company that utilizes… Continue Reading

Court Certifies FCRA Background Check Disclosure Claim Against Employer That Relied on Vendor’s Disclosure Form

Posted in ALL CFS Blog Entries, Background Screening
A new Florida federal district court case is yet another reminder of the minefield of federal and state regulations governing employer criminal background check forms.  In Graham v. Pyramid Healthcare Solutions, the Court certified a class action against the employer under the federal Fair Credit Reporting Act and ruled that whether the employer willfully violated… Continue Reading

Supreme Court Declines to Weigh in on Spokeo in FACTA Lawsuit

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
The United States Supreme Court has denied a petition seeking review of a Seventh Circuit decision holding that a consumer lacked Article III standing to challenge an alleged violation of the Fair and Accurate Transactions Act where the defendant retailer printed more than the last five digits of his credit card number and the expiration… Continue Reading

Employer Seeks Supreme Court Review of Ninth Circuit Finding of Willful FCRA Violation

Posted in ALL CFS Blog Entries, Background Screening
On January 20, 2017, the Ninth Circuit Court of Appeals issued a decision of first impression in Syed v. M-I, LLC, a putative class action, when it held that a prospective employer willfully violated the Fair Credit Reporting Act by including a liability waiver in its FCRA background check disclosure form.  In the underlying case, Syed applied… Continue Reading

District Court Dismisses FCRA Class Action for Lack of Standing Based on Insufficient Risk of Imminent Harm

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
Since the Supreme Court issued its decision in Spokeo, Inc. v. Robins, appellate and district courts throughout the country have been grappling with the ruling’s reach.  Just this past month, the District Court for the Southern District of New York weighed in on the issue and found that a plaintiff must show more than a… Continue Reading

District Court Rejects Notion That An Improper Background Check Disclosure Automatically Renders A Subsequent Background Authorization Improper

Posted in ALL CFS Blog Entries, Background Screening
In the world of background check litigation under the Fair Credit Reporting Act (“FCRA”), one theory that plaintiffs frequently assert is that if the background check disclosure provided by the employer violates the FCRA, then the authorization based on that disclosure is also necessarily inadequate.  Under the FCRA, an employer desiring to obtain a criminal… Continue Reading

FTC Submits Annual Budget Request To Congress

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
The Federal Trade Commission (FTC) submitted its Fiscal Year 2018 budget request to Congress, in support of the President’s FY 2018 budget for the federal government. The budget request also includes the FY 2018 Budget Overview Statement, Performance Plan for FY 2017 and FY 2018, and Performance Report for FY 2016, as required under the… Continue Reading

Pennsylvania to “Ban the Box” by Executive Order

Posted in ALL CFS Blog Entries, Background Screening
Pennsylvania Governor Tom Wolf announced this month that he will “ban the box” for some applicants applying for certain state government positions, and that he will do so by executive order, which would take effect as of July 1, 2017.  The executive order would affect hiring in nearly 70,000 state jobs within the executive branch… Continue Reading

Spokeo Strikes Again: Fourth Circuit Reverses and Dismisses $12 Million FCRA Class Action on Spokeo Grounds

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Cyber Security, Information Governance & Privacy, Debt Buyers & Collectors, Featured Posts
In one of the most significant post-Spokeo decisions to date, the Fourth Circuit unanimously reversed and dismissed a nearly $12 million Fair Credit Reporting Act (“FCRA”) class action judgment, finding plaintiff, Michael T. Dreher, lacked Article III standing to bring his claims. The decision provides much needed clarity from the Fourth Circuit on the viability… Continue Reading

FTC Issues Guidance for Employment Background Screening

Posted in Background Screening
On April 28, the Federal Trade Commission published a blog entitled “Background Checks on Prospective Employees: Keep Required Disclosures Simple.”  In this online publication, the FTC issued guidance to employers on how to comply with the Fair Credit Reporting Act if they intend to use a consumer report (commonly referred to as a background check)… Continue Reading

California Approves New Regulations Regarding Consideration of Criminal History in Employment Decisions

Posted in ALL CFS Blog Entries, Background Screening
On March 27, the Office of Administrative Law for the State of California announced new regulations that even further limit employers’ ability to consider a job applicant’s criminal history when making hiring decisions. Except if otherwise permitted by law, employers are prohibited from taking into consideration during the hiring process a number of enumerated offenses, including arrests… Continue Reading

North Carolina House Votes Overwhelmingly to “Ban the Box”

Posted in ALL CFS Blog Entries, Background Screening
The North Carolina House of Representatives recently voted 98-14 to “ban the box” for state agency hiring.  The bill would not apply to private employers or to state positions that “involve direct interaction with minors or the elderly.”   House Bill 409 would prevent state agencies from inquiring into an employment applicant’s criminal history at the… Continue Reading

Vague Allegations Of Actual Damages Insufficient To Withstand Motion To Dismiss On FCRA Negligence Claim

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
The Fair Credit Reporting Act (FCRA) is not a strict liability statute.  To prevail, a plaintiff must prove that the statute was violated willfully or negligently.  While plaintiffs typically pursue willfulness claims because of the possibility of statutory and punitive damages, they often include vague allegations of emotional distress and actual damages in order to… Continue Reading

Court Rejects FCRA Background Check Settlement As Providing Insufficient Recovery For Class Members In Light Of Ninth Circuit Ruling

Posted in ALL CFS Blog Entries, Background Screening
This past week, the U.S. District Court for the Northern District of California declined to preliminarily approve a class action settlement of a Fair Credit Reporting Act (FCRA) claim because the payment to class members was unreasonably low.  In the Court’s view, the class members deserved more in light of the strengths of the plaintiff’s… Continue Reading

Lawmakers in U.S. House of Representatives Considering Bill That Would Reform Class Action Litigation under Federal Rule of Civil Procedure 23

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On February 9, 2017, Judiciary Committee Chair Bob Goodlatte (R.-Va.), introduced H.R. 985, the Fairness in Class Action Litigation Act of 2017 (“the Act”). The Act aims to “amend the procedures used in federal court class actions and multidistrict litigation proceedings to assure fairer, more efficient outcomes for claimants and defendants.” Rep. Goodlatte issued a… Continue Reading

FTC Releases Annual Summary of Consumer Complaints

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, State Attorneys General, CFPB, & FTC
The Federal Trade Commission has released its annual summary of consumer complaints for 2016, contained in the FTC’s latest Consumer Sentinel Network Data Book.  The FTC compiles the report annually based on complaints received by the Consumer Sentinel Network.  Complaints include those made directly by consumers to the FTC, as well as complaints received by… Continue Reading

Improper Form of Background Check Disclosure Not Sufficient Injury for Standing

Posted in ALL CFS Blog Entries, Background Screening
Ever since the Supreme Court decided Spokeo, Inc. v. Robins last year, courts have been struggling to define the contours of standing in “no injury” class actions.  In Fields v. Beverly Health and Rehabilitation Services, Inc. et al., the District of Minnesota recently granted a motion to dismiss a Fair Credit Reporting Act claim in… Continue Reading

CFPB Indicates Online Complaint Portal Upgrades are Coming

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
The Consumer Financial Protection Bureau maintains an online portal for consumers to submit complaints across a wide variety of regulated industries, including credit reporting, background screening, and debt collection.  The CFPB has announced that it will upgrade its online portal system in early 2017.  The CFPB has released a preview document, which states that the… Continue Reading

District Court Finds That Sending Copy of Background Check Satisfies FCRA Pre-Adverse Action Obligations

Posted in ALL CFS Blog Entries, Background Screening
Under the Fair Credit Reporting Act, when an employer is considering rejecting an applicant based on a background check (often referred to as a consumer report), it must follow certain “pre-adverse” action procedures.  Specifically, an employer must provide the applicant with a copy of his or her background check and a summary of rights under… Continue Reading

Defendant Requests Rehearing En Banc of Ninth Circuit’s Finding of Willful FCRA Violation

Posted in ALL CFS Blog Entries, Background Screening
As we previously reported, on January 20, the Ninth Circuit Court of Appeals issued a decision of first impression in Syed v. M-I, LLC, a putative class action, when it held that a prospective employer willfully violated the Fair Credit Reporting Act by including a liability waiver in its background check disclosure form.  The Ninth… Continue Reading

Ban the Box Bill Passes Virginia State Senate, Awaits Review by House

Posted in ALL CFS Blog Entries, Background Screening
On January 27, Sen. Rosalyn Dance’s “ban the box” bill, SB 1171, passed the Virginia Senate by a 22-17 vote.  The bill proposes to “ban the box” by preventing prospective employers from asking about a job applicant’s criminal history at the initial employment application stage.  The bill was introduced as follows:  “Public employment; inquiries by… Continue Reading