On December 8, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) (collectively, the agencies) filed an amici curiae brief urging the U.S. Court of Appeals for the Fourth Circuit to reverse a district court’s decision finding that furnishers need not investigate indirect disputes involving purely legal questions under the Fair Credit Reporting Act (FCRA).
On December 20, the Consumer Financial Protection Bureau (CFPB) and U.S. Department of Justice (DOJ) filed a complaint in a Texas federal court against Colony Ridge Development, LLC (Colony Ridge), its affiliates, and Loan Originator Services, a Texas mortgage company, for allegedly operating an illegal land sales scheme and targeting tens of thousands of Hispanic borrowers with false statements and predatory loans. Specifically, the complaint alleges Colony Ridge sells flood-prone land without water, sewer, or electrical infrastructure, and that the company sets borrowers up with loans they cannot afford. The complaint alleges that defendants engaged in unlawful discrimination by targeting Hispanics in violation of the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA). In addition, the complaint alleges violation of the Dodd-Frank Act’s prohibition on unfair, deceptive or abusive acts or practices (UDAAP), and a variety of violations of the Interstate Land Sales Full Disclosure Act.
A group of non-profit consumer advocacy organizations, the Conference of State Bank Supervisors, and the American Association of Residential Mortgage Regulators filed two separate briefs asking the U.S. Supreme Court to overturn a Second Circuit decision holding that New York’s escrow interest law is preempted by the National Bank Act (NBA) under the “ordinary legal principles of pre-emption.” Under the NBA, a state law is preempted if the law “prevents or significantly interferes with the exercise by the national bank of its powers.”
On December 15, the Consumer Financial Protection Bureau (CFPB) announced it had reached a settlement with medical debt collector Commonwealth Financial Systems, Inc. (Commonwealth) in its lawsuit over alleged illegal debt collection practices. Specifically, the CFPB alleged that Commonwealth failed to conduct reasonable investigations of disputes and violated the Fair Debt Collection Practices Act (FDCPA) by attempting to collect disputed debt without obtaining substantiating documentation. Under the settlement agreement, Commonwealth is banned from debt collection activities, must request CRAs to delete all consumer accounts to which it had previously furnished information, and must pay a $95,000 penalty to the CFPB’s victims relief fund.
On December 13, by a vote of 4-1, the Federal Communications Commission (FCC) adopted new rules aimed at “closing the ‘lead generator’ robocall/robotexts loophole.” Specifically, the rule requires telemarketers to obtain consumer consent to receive robocalls and robotexts one seller/brand at a time, instead of allowing a single consent to apply to multiple telemarketers. This is also known as one-to-one consent. The order does not specifically define “robocall” or “robotext.”
On December 13, New York Governor Kathy Hochul signed into law S4907A, which prohibits hospitals, medical providers, or ambulance services from providing negative information about medical debt to consumer reporting agencies (CRAs). The law also requires that these entities include a provision in their contracts with collection agencies prohibiting the reporting of any portion of a medical debt to a CRA. Any debt that is reported to a CRA will be deemed void. The law became effective immediately after it was signed.
On December 12, the Federal Trade Commission (FTC) published the long-awaited regulation specific to motor vehicle dealers to address concerns of consumer deception in the sales process (Final Rule). We covered the proposed rule, introduced in June 2022, in a blog post here and podcast here. In a 3-0 vote, the FTC approved the issuance of the Final Rule, which will be published in the Federal Register in the coming weeks.
In a case of first impression, the U.S. Court of Appeals for the Ninth Circuit was tasked with determining whether the alleged extracting and retaining of consumer data and tracking of customers using an online payment platform exposes defendants to personal jurisdiction in the state where an online purchase was made. The court concluded it does not. “When a company operates a nationally available e-commerce payment platform and is indifferent to the location of end-users, the extraction and retention of consumer data, without more, does not subject the defendant to specific jurisdiction in the forum where the online purchase was made.”