Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a procedural rule streamlining the designation proceedings for nonbank supervision based on a particular entity posing “risks to consumers.” As discussed in “Our Take” below, the changes are designed to encourage nonbanks to volunteer to be supervised, while making it easier for the CFPB to impose supervisory oversight when companies do not consent.
Stefanie Jackman
Stefanie takes a holistic approach to working with clients both through compliance counseling and assessment relating to consumer products and services, as well as serving as a zealous advocate in government inquiries, investigations, and consumer litigation.
California Federal Court Rules Undated Model Debt Violation Notice Does Not Violate the FDCPA
In March, a district court in the Eastern District of California followed other courts holding that an undated, model form debt validation notice does not violate the Fair Debt Collection Practices Act (FDCPA). Specifically, the court found that the plaintiff’s barebones allegations about purported financial, reputational, and emotional harm did not confer Article III standing.
California Proposes Amending State FDCPA to Cover Small Business Debt
The California Senate Banking and Financial Institutions Committee is currently considering Senate Bill (SB) 1286, which would expand the scope of the Rosenthal Fair Debt Collection Practices Act (RFDCPA) to also prohibit debt collectors from engaging in unfair or deceptive acts or practices in the collection of small business debts.
Fifth Circuit Reverses Transfer of Credit Card Late Fee Rule Lawsuit to D.C.
On April 5, the U.S. Court of Appeals for the Fifth Circuit issued an order effectively reversing the district court’s decision to transfer the lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) credit card late fee rule from the Northern District of Texas to the District Court for the District of Columbia (D.D.C), finding that the Texas district court lacked jurisdiction to issue its order because the plaintiffs’ appeal of the effective denial of their motion for preliminary injunction was already pending before the appellate court.
Fifth Circuit Temporarily Halts Transfer of Credit Card Late Fee Rule Lawsuit
On April 2, the U.S. Court of Appeals for the Fifth Circuit issued an order staying the district court’s decision to transfer the lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB) credit card late fee rule from the Northern District of Texas to the District Court for the District of Columbia (D.D.C). As discussed here, on March 28, 2024, the district court had transferred the case to D.D.C. finding an “attenuated nexus” to the Fort Worth Division since, according to the district court, only one of the six plaintiffs had even a remote tie to the division. The Fifth Circuit’s stay is in effect until 5:00 pm on Friday, April 5, 2024.
Texas District Court Transfers Credit Card Late Fee Rule Lawsuit to D.C.
Yesterday, the lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) credit card late fee rule (Final Rule) was transferred from the U.S. District Court for the Northern District of Texas to the District Court for the District of Columbia (D.D.C.).
Florida State Court Dismisses Letter Vendor Claim for Lack of Standing
In Scott v. Collecto, Inc., the plaintiff filed a complaint in state court alleging a violation of the Fair Debt Collection Practices Act (FDCPA) and common law negligence based on the defendant’s use of a letter vendor to send the plaintiff a demand. The County Court of Florida found that the plaintiff failed to allege an injury sufficient to establish standing.
Florida Federal District Court Grants Debt Collector’s Motion for Summary Judgment Citing Lack of Evidence of Inadequate FCRA Dispute Investigation
A U.S. District Court in the Southern District of Florida recently granted a motion for summary judgment filed by debt collector, I.C. Systems, finding that the plaintiff failed to provide any evidence of an inadequate investigation under the Fair Credit Reporting Act (FCRA).
Texas District Court Questions Venue in Credit Card Late Fee Rule Lawsuit
As discussed here, earlier this month the Consumer Financial Protection Bureau (CFPB or Bureau) finalized its credit card late fee rule (Final Rule). The Final Rule sets a safe harbor amount for late fees at $8 and eliminates the annual inflation adjustments to that safe harbor amount, for larger card issuers, among other changes. The announcement of the Final Rule on credit card late fees sparked immediate reaction. As discussed here, a collective of trade groups, including the U.S. Chamber of Commerce, Fort Worth Chamber of Commerce, Longview Chamber of Commerce, the American Bankers Association, the Consumer Bankers Association, and Texas Association of Business (collectively, the trade groups) filed a complaint in the U.S. District Court for the Northern District of Texas challenging the Final Rule and arguing that it should be invalidated because the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution. Alternatively, the trade groups argue that the Final Rule violates the Administrative Procedure Act for various reasons. Concurrently with the complaint, the trade groups filed a motion for preliminary injunction requesting that the court enjoin the Bureau from implementing the Final Rule against their members until the conclusion of the case.
The War on Fees Intensifies: Presidential Strike Force and Industry’s Legal Counterattack
As discussed here, earlier this week the Consumer Financial Protection Bureau (CFPB or Bureau) finalized its credit card late fee rule (Final Rule). The Final Rule sets a safe harbor amount for late fees at $8 and eliminates the annual inflation adjustments to that safe harbor amount, for larger card issuers. The timing of the Final Rule’s announcement, just days before the State of Union address, did not go unnoticed. President Biden highlighted this development in his speech, emphasizing his administration’s commitment to eliminating so-called hidden fees.