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

ALL CFS Blog Entries

Subscribe to ALL CFS Blog Entries RSS Feed

California’s Statewide “Ban-The-Box” Law To Go Into Effect January 2018

Posted in ALL CFS Blog Entries, Background Screening, Featured Posts
On October 14, 2017, California became the most recent state to adopt a “ban-the-box” law. The law, signed by Governor Jerry Brown, goes into effect on January 1, 2018, prohibiting pre-offer inquiries regarding applicants’ conviction histories, and regulating employers’ decisions to deny employment to an applicant based on his or her convictions. This law is… Continue Reading

District Court Rejects FCRA Class Action Settlement for Lack of Standing

Posted in ALL CFS Blog Entries, Background Screening
In Robertson v. Allied Solutions, LLC, plaintiff Shameca Robertson brought a class action claim in the Southern District of Indiana against Allied Solutions under the Fair Credit Reporting Act.  In the complaint, Robertson asserted two claims against Allied Solutions: (1) that the company failed to provide her with an FCRA-compliant disclosure informing her that it… Continue Reading

New York AG Announces Settlements with Two Motor Vehicle Dealer Groups

Posted in ALL CFS Blog Entries, Auto Finance, State Attorneys General, CFPB, & FTC
New York Attorney General Eric Schneiderman announced two settlements with motor vehicle dealer groups that provide for over $900,000 in restitution to approximately 6,400 New York State consumers.  The settlements also require the dealers to pay $135,000 in penalties and costs to the state for the unlawful sale of credit repair and identity theft protection services… Continue Reading

FTC and State AGs Announce Crackdown on Student Loan Debt Relief Scam

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
The Federal Trade Commission, along with 11 states and the District of Columbia, just announced “Operation Game of Loans.”  This is the first coordinated federal-state initiative targeting deceptive student loan debt relief scams.  The nationwide crackdown encompasses 36 actions by the FTC and state attorneys general against bad actors that are alleged to have used deception and false promises… Continue Reading

Debt Collector Defeats FDCPA Suit with Bona Fide Error Defense

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
A federal judge in Utah has ruled that a debt collector may rely on the “bona fide error” defense to defeat a claim for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.  Analyzing the compliance procedures that the debt collector had in place, the Court granted summary judgment for… Continue Reading

New York Passes Law Overhauling Process for Sealing Old Felony Convictions

Posted in ALL CFS Blog Entries, Background Screening
Effective October 7, New York law now authorizes state courts to seal nonviolent criminal convictions that are more than ten years old.  The newly enacted New York Criminal Procedure Law § 160.59 allows criminal defendants to apply to seal one felony and one misdemeanor conviction, or two misdemeanor convictions, for offenses other than violent and… Continue Reading

Join Us for a Complimentary Webinar: “2017 Compliance Management Systems – The Next Generation”

Posted in ALL CFS Blog Entries, CFS Events
On Tuesday, October 31, from 3-4 p.m. ET, Join Troutman Sanders for a webinar to discuss data governance. We will address best practices and common pitfalls. We will also provide key insight into leveraging your governance structure to build a compliance program and how cyber security should play a role. Registration is complimentary. One hour… Continue Reading

FTC and State AGs to Announce Major Coordinated Consumer Fraud Enforcement Initiative

Posted in ALL CFS Blog Entries, Featured Posts, State Attorneys General, CFPB, & FTC
The Federal Trade Commission (FTC) issued a press release earlier today alerting the media and other interested parties that it will announce a “major coordinated consumer fraud enforcement initiative” Friday, October 13 at 11:30 a.m. EST. The Acting Director of the FTC’s Bureau of Consumer Protection, Thomas Pahl, and Illinois Attorney General Lisa Madigan will headline… Continue Reading

House Financial Services Committee Hears Bill to Exempt Lawyers from FDCPA in Connection with Legal Proceedings and Related Communications

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On September 7, the Financial Services Committee held hearings on a bill, H.R. 1849: Practice of Law Technical Clarification Act of 2017 (Trott), that seeks to amend the Fair Debt Collection Practices Act. The current definition of “debt collector” under the FDCPA does not make clear whether it applies to attorneys, especially in the context… Continue Reading

California Adds Fraudulently Created Accounts to List of Exclusions from Compelled Arbitration

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
California Governor Jerry Brown has signed legislation creating a new exception to mandatory arbitration within the California Arbitration Act.  SB 33, introduced by Sen. Bill Dodd in December 2016, permits an existing customer of a bank to sue a depository bank when a fraudulent account is opened unknowingly in the consumer’s name.  The exception specifically… Continue Reading

House Financial Services Committee Chairman Urges National Data Breach and Data Security Standards

Posted in ALL CFS Blog Entries, Cyber Security, Information Governance & Privacy, State Attorneys General, CFPB, & FTC
On October 5, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) called for national standards for data breach notification and data security. While voicing concerns about a “Washington-forced technology solution,” Hensarling said, “We do need a consistent national standard for both data security and breach notification in order to better protect our consumers, hold companies… Continue Reading

CFPB Rule Requires Payday Lenders to Apply “Ability to Repay” Standard to Loans

Posted in ALL CFS Blog Entries, Featured Posts, State Attorneys General, CFPB, & FTC
Today the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) issued a new rule that will have a significant impact on the payday lending market. The CFPB will now require lenders to conduct a “full-payment test” to determine upfront whether the borrower will have the ability to repay the loan when it becomes due. Lenders… Continue Reading

Massachusetts AG Accuses Used Car Dealer of Deceptive Practices

Posted in ALL CFS Blog Entries, Auto Finance, State Attorneys General, CFPB, & FTC
On September 26, Massachusetts Attorney General Maura Healey’s office filed a complaint against used car dealer JD Byrider, accusing the dealership of using predatory practices in its sale of allegedly defective vehicles.  The AG’s Office contends that JD Byrider sold allegedly defective vehicles with high cost loans to Massachusetts consumers in the “JD Byrider Program,”… Continue Reading

CFPB Issues Guidance to Small Businesses on Complying With Rule Banning Class Action Waivers

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
On July 10, 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 consumer… Continue Reading

No Vacancy – Court Denies Class Certification in FCRA Case Against Hyatt

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
On March 13, 2017, Carlos Guarisma filed a class action complaint against Hyatt Equities, alleging violation of the Fair Credit Reporting Act.  The complaint alleges that Hyatt printed more than the last five digits of customers’ credit card numbers on hotel receipts.  Guarisma sought to represent a class of Hyatt hotel guests.  This past week,… Continue Reading

U.S. Chamber of Commerce and Other Business Associations Sue to Overturn Ban on Class Action Waivers

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
The U.S. Chamber of Commerce and other business groups have filed a federal lawsuit seeking to invalidate the Consumer Financial Protection Bureau’s Rule banning class action waivers in arbitration provisions contained in financial institutions’ contracts with consumers.  Compliance with the Rule would be required beginning March 19, 2018.  The lawsuit was filed in the United… Continue Reading

Cursory Investigations and Misleading Reporting Leads to Partial Summary Judgment Win for Consumer

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Featured Posts
A recent federal court decision granting summary judgment to a plaintiff on a claim that a lender violated the Fair Credit Reporting Act (the “FCRA”), 15 U.S.C. § 1681 et seq., by failing to conduct a “reasonable” investigation of a credit reporting dispute – an issue normally reserved for a jury – illustrates the difficulty… Continue Reading

District of New Jersey Judge Allows Consumer’s 1099C Disclosure Case to Continue

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On September 28, 2017, the District of New Jersey denied a debt collector’s motion to dismiss a Fair Debt Collection Practices Act (“FDCPA”) claim based on 1099C language contained in a collection letter.  This decision continues a recent trend, particularly within the courts of the Third Circuit, in denying motions to dismiss on this issue.  … Continue Reading

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

Northern District of Illinois Says that Revocation of Consent for One is Not Revocation of Consent for All

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 23, a federal judge in Illinois ruled that a consumer who had multiple accounts with different creditors assigned to the same collection agency did not effectively revoke consent for all accounts merely by revoking consent for one.  Specifically, the Court said that when a consumer told a collection agency to stop calling him… Continue Reading

11th Circuit Applies Totality-of-the-Circumstance Analysis to Judicial Estoppel

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Mortgage Lenders & Servicers
On September 18, in an en banc review, the Court of Appeals for the Eleventh Circuit overruled, in part, seminal cases Barger v. City of Cartersville, 348 F.3d 1289 (11th Cir. 2003) and Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002), adopting a totality-of-the-circumstances analysis when facing questions of judicial estoppel.  In… Continue Reading

CFPB Proposes Modifications to Home Mortgage Law to Protect Borrowers’ Privacy

Posted in ALL CFS Blog Entries, Mortgage Lenders & Servicers, State Attorneys General, CFPB, & FTC
On September 20, the Consumer Financial Protection Bureau issued proposed policy guidance that would modify a mortgage disclosure law in an effort to protect applicants’ and borrowers’ privacy. In 2015, the CFPB finalized changes to the Home Mortgage Disclosure Act (“HMDA”), which requires lenders to report and disclose to the public certain information about their… Continue Reading

District Court Denies Motion to Strike in FCRA Background Check Class Action

Posted in ALL CFS Blog Entries, Background Screening
In Fosbrink v. Area Wide Protective, Inc., William Fosbrink sued defendant Area Wide Protective in a class action complaint for allegedly violating the Fair Credit Reporting Act’s provisions regarding employment background checks.  According to Fosbrink, Area Wide violated the FCRA in three ways: (1) it failed to provide him with a stand-alone disclosure informing him… Continue Reading