On Wednesday, the New York Department of Financial Services (DFS) became the first state financial regulator to use the Dodd-Frank Act’s “UDAAP” consumer protection standards against a corporation when it filed a lawsuit against an auto lender. The 2010 Dodd-Frank Act gives state regulators the ability to sue companies for engaging in unfair, deceptive, or
FTC Closes Settlement with National Card Monitor, LLC
This week, nearly 5,000 consumers will receive refund checks of $25.13 pursuant to a settlement between the Federal Trade Commission and Arizona-based telemarketing company National Card Monitor, LLC (“NCM”). According to the Commission, NCM began cold-calling consumers in early 2011 and falsely claiming that it could offer low-rate credit cards to consumers, onto which they
FDIC Fines Credit-Card Bank $1 Million
On April 25, 2014, the Federal Deposit Insurance Corporation (FDIC) published an enforcement order showing that Lincoln, Nebraska-based World’s Foremost Bank had agreed to pay $1 million in restitution for deceptive and unfair acts, including the charging of improper fees. The bank is the credit card arm of Sidney, Nebraska-based Cabela’s, a nationwide outdoor retailer.
New Legislation Proposes Amendments to FCRA
On Wednesday, April 9, 2014, Senators Brian Schatz (D-Hawaii) and Sherrod Brown (D-Ohio) announced legislation seeking to amend the Fair Credit Reporting Act (FCRA) to protect consumers from inaccurate credit reports and credit scores. Their legislation, the Stop Errors in Credit Use and Reporting (SECURE) Act, is aimed at easing the process by which
West Virginia Adds New Disclosure Requirement for Out-of-Statute Debts
A recently passed bill by the West Virginia Legislature requires debt collectors to make new disclosures in initial letters to consumers. Effective June 6, 2014, section 46A-2-128(f) of the West Virginia Consumer Credit Protection Act (WVCCPA) is amended to require the initial written communication with a consumer to disclose the subject debt is beyond the
FTC Settles Claims Against Data Brokers Under FCRA
Two data brokers settled charges brought by the FTC for $1.5 million based on allegations that they violated the Fair Credit Reporting Act (FCRA) when selling consumer data.
The FTC alleged the companies operated as consumer reporting agencies when providing reports about consumers to users such as prospective employers and landlords. The complaints filed by
Settlement in FDCPA Class-Action Over Collection Letters Approved
On April 15, 2014, a federal judge in New Jersey approved the settlement of a class-action suit against a law firm that allegedly violated the Fair Debt Collection Practices Act (FDCPA). Plaintiffs claimed that Mattleman, Weinroth & Miller, whose principal office is in Cherry Hill, NJ, and Executive Credit Management, located in Stanhope, NJ, had
Larger Participant Rule on Horizon for Auto Finance Industry
In early April, Deputy Director Steven Antonakes of the Consumer Financial Protection Bureau delivered the keynote speech at a meeting of the Consumer Bankers Association. During his speech, he specifically targeted the auto finance industry, articulating the CFPB’s concern over dealer mark-up and comparing the practice to mortgage yield spread premiums. Deputy Director Antonakes stated:
Senate Aims to Increase Transparency in Credit Reporting
On April 8, 2014, Senate Democrats introduced a bill that addresses a laundry list of frequent criticisms by federal and state regulators of the consumer reporting industry. The legislation, titled the Stop Errors in Credit Use and Reporting (SECURE) Act, is aimed at increasing the accuracy of consumer reports and assisting consumers who have information
CFPB Outlines Expansion of Nonbank Supervision, In Particular Increasing Consumer Access to Credit Scoring Information and Education
In a speech at the Consumer Bankers Association, CFPB Deputy Director Steve Antonakes discussed the nonbank segments of the financial services industry where the CFPB recently has expanded its supervision, including debt collection, student loan servicing, and large nonbank auto lenders.
Antonakes cited the receipt of more than 20,000 consumer complaints in March 2014 as