On October 12, the U.S. Court of Appeals for the Third Circuit issued a decision rejecting a district court’s finding that the so-called informational injury doctrine established Article III standing for the named plaintiff and putative class in a class action brought under the Fair Debt Collection Practices Act (FDCPA).
Recently, the New Jersey appellate division held that a debt purchaser is not liable under the New Jersey Consumer Fraud Act (NJ Fraud Act) for failing to obtain a license under the New Jersey Consumer Finance Licensing Act (NJ Licensing Act). Although the decision is unpublished, it is still a welcome relief for purchasers of defaulted debt.
On October 12, in its monthly bulletin the California Department of Financial Protection and Innovation (CA DFPI) announced that final regulations to implement the Student Loan Servicing Act and the Student Loans Borrower Rights Law have been approved and will become effective Jan. 1, 2024. Among other things, the rules clarify that all education financing products, including income share agreements (ISAs) and installment contracts, are student loans, and servicers of all such products are covered by the Student Loan Servicing Act and must be licensed.
On October 11, the Consumer Financial Protection Bureau (CFPB or Bureau) published a special edition of its Supervisory Highlights report. This report serves as a “victory lap” for the Bureau, which highlights the relief it has obtained for consumers since the release of its March 2023 Special Fees Edition, discussed here. According to the Bureau, its supervisory efforts have led to institutions refunding over $140 million to consumers, including $120 million in overdraft and non-sufficient funds (NSF) fees.
The Third Circuit Court of Appeals overruled a district court’s reading of an exception into §1681s-2(b) of the Fair Credit Reporting Act (FCRA) that would allow a furnisher discretion to refuse to investigate an indirect dispute it deems frivolous or irrelevant. Instead, the Third Circuit held that a furnisher must investigate even frivolous indirect disputes — disputes submitted by a consumer first to a consumer reporting agency (CRA) that are then transmitted by the CRA to the furnisher. A copy of the decision can be found here.
On October 3, the U.S. Supreme Court heard arguments in Community Financial Services Association of America, Limited (CFSA) v. Consumer Financial Protection Bureau (CFPB or Bureau), a case in which the Fifth Circuit held that the CFPB’s funding mechanism violates the Appropriations Clause because the CFPB does not receive its funding from annual congressional appropriations like most executive agencies, but instead, receives funding directly from the Federal Reserve based on a request by the CFPB’s director. If the Supreme Court affirms the Fifth Circuit’s decision, the future of the Bureau as well as its rulemaking and enforcement actions would be in question.
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On September 15, the U.S. District Court for the District of New Jersey denied the defendant’s summary judgment motion holding instead that a bank levy against the plaintiff served as a basis for standing to assert a claim under the Fair Debt Collections Practices Act (FDCPA).
In Perrong v. Bradford et al, the plaintiff alleged that the defendant, an elected official, violated the Telephone Consumer Protection Act (TCPA) by calling his residential phone using a prerecorded message and an automatic telephone dialing system (ATDS). He further alleged that his telephone number was registered with both the national and Pennsylvania Do Not Call registries.
The Consumer Financial Protection Bureau (CFPB) today outlined a plan for rulemaking under the Fair Credit Reporting Act (FCRA) that could significantly impact the entire consumer data ecosystem. The proposed rulemaking could redefine “data brokers” and “data aggregators” and extend FCRA regulation to businesses that do not currently meet the FCRA’s definition of “consumer reporting agency.” The CFPB’s plan could also impose stricter rules for obtaining consumer consent and increase compliance requirements and risks for both new and existing members of the FCRA-regulated consumer data ecosystem.