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

Payment Processing & Cards

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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
Microphone at Seminar HallOver 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

Republicans Move to Roll Back CFPB Prepaid Card Rules

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
Republicans in Congress have moved to repeal recently issued Consumer Financial Protection Bureau regulations governing the prepaid card industry.  Rep. Tom Graves (R-Ga.) introduced a bill in the House in early February that would submit the rules to a vote of disapproval under the Congressional Review Act.  A group of Republicans filed a similar measure… 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

Federal Court Transfers Payment Processor’s Case Seeking Collection of $4.5M Judgment

Posted in ALL CFS Blog Entries, Payment Processing & Cards
A New York payment processor successfully defended one personal jurisdiction challenge, but lost the other in the Northern District of Texas.  The case represents an attempt by TransFirst Group, Inc. to collect a $4.5 million judgment it obtained against Dominic “Nick” Magliarditi in 2013 related to the group’s purchase of Magliarditi’s payment processing company, Payment… 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

OCC Releases Semiannual Risk Perspective – January 2017

Posted in ALL CFS Blog Entries, Payment Processing & Cards
The Office of the Comptroller of the Currency’s National Risk Committee, which is tasked with monitoring the overall condition of the federal banking system and any emerging threats to the system’s safety and soundness, released its “Semiannual Risk Perspective for Fall 2016” on January 5.  Using data from the first half of 2016, the publication… 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

Ninth Circuit Agrees to Remand Action to State Court Based on Spokeo

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Cyber Security, Information Governance & Privacy, Payment Processing & Cards
The Ninth Circuit in Medellin v. IKEA U.S. West Inc. recently remanded a plaintiff’s appeal to the district court with instructions to dismiss the case after the plaintiff admitted that she lacked Article III standing to proceed in federal court.  As background, Rita Medellin’s class action complaint alleged that IKEA violated the Song-Beverly Credit Card… Continue Reading

Payment Processing Marketer Seeks Sanctions Against CFPB

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On January 4, a defendant in a Fair Debt Collections Practices Act case moved for sanctions against the Consumer Financial Protection Bureau, arguing that it never had proof that the defendant acted wrongfully when it filed suit in early 2015.  In support of its Motion, Pathfinder Payment Solutions, Inc. stated that the Bureau “knowingly exceeded… 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

Seventh Circuit Relies on Spokeo Reasoning to Dismiss FACTA Case for Lack of Standing

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On December 13, the Seventh Circuit Court of Appeals ordered the dismissal of a proposed class action alleging that a restaurant did not properly truncate credit card expiration dates on receipts, finding the plaintiff lacked Article III standing.  The plaintiff, Jeremy Meyers, was given a copy of his receipt after dining at Nicolet Restaurant of… Continue Reading

FTC and Florida Settle with More Defendants Involved in Alleged Telemarketing Debt Relief Scam

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
Approximately a year after filing an amended complaint and three months after settling with a group of co-defendants, the Federal Trade Commission and Florida Attorney General have filed papers seeking entry of agreed permanent injunctions and monetary judgments against a second group of co-defendants involved in an alleged nationwide debt relief telemarketing scam.  The proposed… Continue Reading

District Court Rules Credit Card Debt Collection Dispute Must Be Arbitrated

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On December 2, Judge Valerie Caproni of the Southern District of New York ruled that a class action suit alleging violations of the Fair Debt Collection Practices Act must be arbitrated.  The class plaintiff, Alicia Zambrana, applied for and received a Best Buy-branded credit card from Household Bank N.A. (“HSBC”).  While the court could not… Continue Reading

Cross-Motions for Summary Judgment Filed in Costco FCRA Class Action

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Cyber Security, Information Governance & Privacy, Payment Processing & Cards
As we previously reported, the named plaintiff in Paci v. Costco Wholesale Corporation filed a Fair Credit Reporting Act putative class action against Costco alleging that the retailer’s receipts contained more digits of the payment card’s account number than is permitted under the Act.  The parties recently filed cross-motions for summary judgment.  Costco argued that… Continue Reading

CFPB Publishes Prepaid Card Fact Sheet

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On November 15, the Consumer Financial Protection Bureau issued a fact sheet to highlight the new requirements and deadlines imposed by the Bureau’s latest Prepaid Rule, which was finalized last month.  The fact sheet notes the effective dates of new requirements under the Rule and lists any related exceptions or accommodations.  The Bureau issued the… Continue Reading

CFPB Sues Company and Outside Counsel for Alleged Violations of State Law Concerning Structured Settlement Factoring

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On November 21, the Consumer Financial Protection Bureau filed a lawsuit in a Maryland federal court against Access Funding, a company that purchases structured settlement payments in exchange for a discounted lump sum.  The Bureau also sued the company’s Chief Executive Officer, Chief Operating Officer, and an outside attorney who provided “independent professional advice” to… Continue Reading

FTC Alleges Prepaid Card Company Deceptively Marketed Reloadable Debit Cards

Posted in ALL CFS Blog Entries, Payment Processing & Cards
On November 10, the Federal Trade Commission filed a complaint in the Northern District of Georgia against NetSpend Corporation, alleging that the company repeatedly deceived consumers about their ability to access funds deposited on the company’s debit cards.    NetSpend markets, sells, and services prepaid debit cards, including general purpose reloadable cards.  According to the FTC,… Continue Reading

CFPB to Publish Public List of Companies Offering Free Credit Scores

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
The CFPB has announced plans to produce a list of companies offering existing customers free access to their credit score.  According to the CFPB, “educating and empowering consumers to take more control over their financial lives” constitutes a core part of the Bureau’s mission.  Credit scores are vitally important to the Bureau in this regard… Continue Reading