A proposed class action lawsuit has been filed in the U.S. District Court for the Northern District of California against EarnIn, a FinTech provider of Earned Wage Access services, alleging that its optional fees and tips constitute hidden interest payments. The complaint claims that EarnIn’s practices violate Georgia’s Payday Loan Act and the federal Truth in Lending Act (TILA).
Dear Mary,
I recently experienced a security incident at my company and am considering whether to report it to law enforcement. While I want to cooperate and help catch the cybercriminals responsible, I am worried that law enforcement might come after my company for… I am not exactly sure what.
What should I do?
– Not Guilty
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:
In a recent decision, the U.S. District Court for the Eastern District of Virginia denied a retailer’s motion to compel individual arbitration of a claim brought in a putative class action lawsuit. The complaint alleges that the retailer used deceptive sales tactics to induce the plaintiff to make an unnecessary online purchase. The court denied the retailer’s motion to compel arbitration, finding that a unilateral modification provision in its terms and conditions rendered the arbitration agreement illusory.
Yesterday, the Federal Trade Commission (FTC) and the State of Arizona announced a joint action against Coulter Motor Company, an Arizona-based motor vehicle dealership, and its former general manager, for allegedly engaging in deceptive pricing practices and discriminatory financing treatment of Latino consumers. The complaint alleges violations of the FTC Act, the Equal Credit Opportunity Act, and the Arizona Consumer Fraud Act. The defendants have agreed to a $2.6 million settlement, most of which will be used to provide refunds to affected consumers.
This week, the Biden-Harris Administration launched a comprehensive initiative aimed at addressing what it describes as everyday hassles that waste Americans’ time and money. This new government-wide effort, called “Time Is Money,” seeks to regulate various business practices that the administration claims add unnecessary burdens to consumers’ lives. The initiative includes actions from multiple federal agencies, including the Consumer Financial Protection Bureau (CFPB or Bureau) and the Federal Trade Commission (FTC).
The U.S. Court of Appeals for the District of Columbia Circuit recently dismissed an appeal in the case of Lewis v. Becerra, Secretary of the United States Department of Health and Human Services (HHS). The appellants sought to challenge the district court’s denial of class certification despite having won their individual claims for Medicare reimbursement. The court dismissed the appeal for lack of Article III standing, emphasizing that the appellants did not demonstrate a concrete, individual injury from the denial of class certification.
The Federal Trade Commission (FTC) recently announced that it has filed proposed orders against the owners and operators of Financial Education Services (FES), a credit repair operation accused of running a pyramid scheme and violating the Credit Repair Organizations Act (CROA). The proposed orders call for permanent bans and substantial monetary penalties for the defendants.
This week, the Consumer Financial Protection Bureau (CFPB or Bureau) issued an advisory opinion and a research report addressing contract-for-deed home financing, also known as a “land contract,” “land installment contract,” “land sales contract,” “bond for deed,” “agreement for deed,” or “buying on contract.” The advisory opinion concludes that form of seller financing, where the seller retains the deed until the buyer completes the payments, generally is “consumer credit” under the Truth-in-Lending Act and Regulation Z and, therefore, that many providers of the financing must comply with the Ability to Repay and other rules in Regulation Z governing consumer mortgages. The CFPB also asserts that contract-for-deed home financing can trap buyers in unlivable homes and financial hardship.
Dear Mary,
I’m the general counsel of an organization and have recently started getting involved in the cybersecurity side of things. As I’m getting my bearings, I’ve noticed that our security team doesn’t always involve the legal department when an incident is suspected. While I understand that not every incident requires our involvement, I’m concerned that we’re being left out of matters that do need legal oversight, and when we are involved, it’s often too late. What can I do to help address this?
– Living in FOMO