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

State Attorneys General, CFPB, & FTC

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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

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

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 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

Massachusetts AG Announces Data Breach Bill

Posted in ALL CFS Blog Entries, Cyber Security, Information Governance & Privacy, State Attorneys General, CFPB, & FTC
Massachusetts Attorney General Maura Healey announced updated legislation that will remove fees for security freezes and consumer credit reports.  The new legislation (SB 130/HB 134) includes several pro-consumer changes: Consent – Any company seeking to obtain or use a consumer’s credit report or credit score will need the written consent of the consumer and must… Continue Reading

FTC Says Its Focus Must Be on Instances of Real Harm to Consumers

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Cyber Security, Information Governance & Privacy, Mortgage Lenders & Servicers, State Attorneys General, CFPB, & FTC
In a September 19 speech at the Federal Communications Bar Association in Washington, FTC Acting Chairman Maureen K. Ohlhausen stated that the Commission should focus on addressing instances of “substantial consumer injury” in deciding which cases to pursue.  Echoing (intentionally or not) the language of the Supreme Court’s foundational decision in Spokeo, Inc. v. Robins,… Continue Reading

CFPB Takes Action Against Zero Parallel LLC for Issuing Allegedly Illegal Payday Loans

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On September 5, the Consumer Financial Protection Bureau signed a consent order against payday and installment loan company Zero Parallel LLC and its president and primary owner for acts the CFPB alleged were unfair, deceptive, and abusive.  The order concludes the matter initiated by a complaint filed against the owner of Zero Parallel and another… Continue Reading

CFPB Files Suit Against Litigation Loan Company

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On September 19, the Consumer Financial Protection Bureau filed a complaint, together with a proposed consent order, against Top Notch Funding II, LLC, Rory Donadio, and John “Gene” Cavalli, alleging that the defendants engaged in deceptive practices in offering loans to consumers who are awaiting payments from settlements or victim compensation funds.  These consumers include… Continue Reading

State Attorneys General of 41 States Subpoena Opioid Manufacturers and Distributors

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
In response to the nationwide opioid crisis, forty-one state attorneys general issued subpoenas to five opioid drug manufacturers and three drug distributors this week. New York Attorney General Eric Schneiderman made the first public announcement of the multistate investigation.  The subpoena demands information and documentation from the manufacturers and distributors regarding prescription opioid drugs as… Continue Reading

CFPB Issues First No-Action Letter to Online Lender Using Alternative Data

Posted in ALL CFS Blog Entries, Featured Posts, State Attorneys General, CFPB, & FTC
On Thursday, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) issued its first no-action letter to Upstart Network, Inc., an online lender. The no-action letter green-lights the lender’s use of alternative data in marketing and pricing decisions. In exchange, Upstart will report lending and compliance information to the CFPB. UPSTART’S MODEL California-based Upstart provides an… Continue Reading

FTC Cracks Down on Social Media Advertising in First-Ever Action Against Individual Social Media Influencers

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
The Federal Trade Commission settled its first-ever action against individual social media influencers for failing to disclose connections to brands the influencers endorsed.  The action – against Trevor Martin (also known as “TmarTn”), Thomas Cassell (also known as “Syndicate”), and CSGOLotto, Inc. – alleged that Martin and Cassell endorsed CSGOLotto on their social media pages… Continue Reading

CFPB’s Latest Supervisory Highlights Provides Valuable Statistics and Insight on Enforcement Efforts

Posted in ALL CFS Blog Entries, Auto Finance, Debt Buyers & Collectors, Mortgage Lenders & Servicers, State Attorneys General, CFPB, & FTC
The Consumer Financial Protection Bureau recently released its Summer 2017 Supervisory Highlights, which summarizes the agency’s supervisory activities during the first half of this year. Looking to the numbers.  From January through June, the CFPB’s nonpublic supervisory activities led to restitution payments that totaled approximately $14 million, and public enforcement actions that netted an additional… Continue Reading

FTC and Debt Collector Agree to Defendant Leaving Debt Collection Practice

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On August 24, the United States District Court for the Western District of New York entered a Stipulated Order for Permanent Injunction and Monetary Judgment against the last of a group of defendants who engaged in banned debt collection practices.  The defendant, Anthony Coppola, is now barred from debt collection activities, misrepresenting material facts of… Continue Reading

FTC Charges Deceptive Debt Collectors in Intimidation Scheme; Court Enters Temporary Restraining Order

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On August 21, the Federal Trade Commission charged a North Carolina debt collection operation with using deception and intimidation to collect money from consumers for debts they did not owe or that the group had no right to collect.  On August 24, the District Court for the Western District of North Carolina granted a temporary… Continue Reading

Alleged Shoddy Recordkeeping Spells Trouble for One of Nation’s Largest Student Loan Owners

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On July 19, the New York Attorney General’s Office initiated an investigation into the National Collegiate Student Loan Trusts, sending subpoenas to request information on every collection lawsuit filed by National Collegiate against residents of the state.  National Collegiate, one of the largest owners of private student loan debt in the nation, has been aggressively… Continue Reading

Federal Court Strikes CFPB’s Counts Against Payment Processors for Violating Discovery Order

Posted in ALL CFS Blog Entries, Payment Processing & Cards, State Attorneys General, CFPB, & FTC
On August 25, the United States District Court for the Northern District of Georgia struck four counts of a complaint filed by the Consumer Financial Protection Bureau because it failed to abide by the Court’s discovery order. This matter began on March 26, 2015, when the CFPB filed a complaint against 12 debt collectors, four… 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

CFPB Issues Guidance on Pay-by-Phone Fees

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
The Consumer Financial Protection Bureau recently released a Compliance Bulletin regarding fees that companies may charge consumers when they pay by phone. The Bulletin highlights certain practices related to phone payment fees that may violate the Dodd-Frank Act’s prohibition on committing unfair, deceptive, or abusive acts and practices (UDAAPs), including: Failing to disclose all available… Continue Reading

Democratic State AGs Urge Senate Leaders to Uphold CFPB’s Arbitration Rule

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
Twenty-one Democratic state attorneys general wrote to Senate leaders Mitch McConnell and Charles Schumer to express their opposition to S.J. Res. 47, which would nullify the Arbitration Rule issued by the Consumer Financial Protection Bureau under the Congressional Review Act.  The AGs requested that both senators oppose the Joint Resolution of Disapproval and vote against… Continue Reading

Minnesota AG Cracks Down on Pension Advance Companies Allegedly Targeting Veterans and Senior Citizens

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On August 16, Minnesota Attorney General Lori Swanson announced the filing of a lawsuit against two pension advance companies alleged to have preyed on veterans and senior citizens, convincing borrowers into signing over large portions of their monthly pensions in exchange for small loans to cover household emergencies and basic living expenses. The suit, filed… Continue Reading