California is famously inhospitable to arbitration. In fact, the U.S. Supreme Court struck down California laws disfavoring arbitration on no fewer than six occasions between 1987 and 2022.
Registration Information Released for California DFPI’s Earned Wage Access Regulations
Last month, we discussed the California Department of Financial Protection and Innovation’s (DFPI) newly approved regulations for direct-to-consumer earned wage access (EWA) products. These regulations, approved by the Office of Administrative Law, marked a significant shift in the regulatory landscape for EWA providers, classifying these products as loans under the California Financing Law and imposing new registration requirements. The regulations are set to become effective on February 15, 2025, however, if you are a financial service provider operating in California in one of the four industry categories listed below, you must complete an application and register with DFPI before Feb. 15, 2025 to continue operating legally in the state.
CFPB Voluntarily Extends Effective Date of Advisory Opinion on Medical Debt
Earlier this month, we discussed the lawsuit filed by ACA International, LLC and Collection Bureau Services, Inc. in the U.S. District Court for the District of Columbia against the Consumer Financial Protection Bureau (CFPB or Bureau) and Director Rohit Chopra. The lawsuit challenges the CFPB’s October 1, 2024 advisory opinion on medical debt collection practices. The plaintiffs are seeking an order vacating the advisory opinion and a stay of the effective date pending the conclusion of the case.
CFSA Seeks Clarification from Fifth Circuit of Required Compliance Date for CFPB Payday Loan Rule
On November 18, the plaintiff trade groups in Community Financial Services Association of America, Ltd.(CFSA) v. Consumer Financial Protection Bureau (CFPB) filed an Opposed Motion for Clarification of Stay Pending Appeal asking the U.S. Court of Appeals for the Fifth Circuit to clarify that its stay of the compliance date for the CFPB’s payday loan rule extends until the time for filing a new petition for certiorari with the Supreme Court has expired or, if the petition is filed, until the Supreme Court finally disposes of the case. At a minimum, the trade groups ask the Fifth Circuit to clarify that its existing stay expires 286 days after the court’s recent issuance of its mandate (that is, August 25, 2025) and not on March 30, 2025.
FCC Announces Effective Date for One-to-One Consent Rule
Late last year, we discussed the Federal Communications Commission’s (FCC) new rule aimed at closing the “lead generator” loophole by requiring telemarketers to obtain one-to-one consent from consumers for robocalls and robotexts. This rule mandates that consent must be provided for each individual seller or brand, rather than allowing a single consent to apply to multiple telemarketers. The rule also includes requirements for clear and conspicuous disclosures and ensures that robocalls and robotexts are logically and topically related to the interaction that prompted the consent. The new rule also permits blocking “red flagged” robotexting numbers, codifies do-not-call rules for texting, and encourages an opt-in approach for delivering email-to-text messages.
New Mexico Supreme Court Finds Credit Union’s Employees Engaged in the Unlicensed Practice of Law
The New Mexico Supreme Court recently confirmed consumer standing to pursue state law claims against a credit union after it pursued debt collection lawsuits against its members in the New Mexico magistrate courts. Several members filed a class action lawsuit against the credit union for the unauthorized practice of law and under the Unfair Practices Act (UPA), but the trial court dismissed the case, finding the plaintiffs lacked standing. The court of appeals reversed and the Supreme Court affirmed, finding the plaintiffs had standing to bring claims under both the statute prohibiting the unlicensed practice of law and the UPA.
New Mexico Federal Court Denies Summary Judgment on Majority of Claims Brought Under the TCPA Over Telemarketing Calls
Recently, a U.S. District Court in the District of New Mexico denied a defendant’s motion for summary judgment on Telephone Consumer Protection Act (TCPA) claims for telemarketing calls, finding genuine questions of fact about the defendant’s direct liability, actual authority over agents making the calls, whether the system used to make the calls is an Automatic Telephone Dialing System (ATDS), and whether there is a private right of action under 47 C.F.R. § 64.1200(d)(4). The court granted summary judgment only on claims regarding apparent authority for the agents who called and ratification of the agents’ actions.
Troutman Pepper Weekly Consumer Financial Services Newsletter – November 19, 2024
To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week:
Global Tel Link Fined $3 Million for Alleged Unfair Practices Related to Payment Accounts for Incarcerated Persons
On November 14, the Consumer Financial Protection Bureau (CFPB or Bureau) filed a significant consent order against Global Tel Link Corporation (GTL), a company that provides communication and financial services to correctional facilities. The CFPB found that GTL, along with its subsidiaries Telmate, LLC and TouchPay Holdings, LLC, engaged in illegal practices that adversely affected incarcerated individuals and their friends and families.
House Resolution Introduced to Disapprove the CFPB Advisory Opinion on Medical Debt Collection Practices
On November 13, Representative Gary J. Palmer (R-AL) introduced House Joint Resolution 220, which seeks congressional disapproval of an advisory opinion published by the Consumer Financial Protection Bureau (CFPB or Bureau) relating to medical debt collection practices.