The U.S. District Court for the Northern District of Alabama recently issued a decision in a Fair Debt Collection Practices Act (FDCPA) case highlighting the importance of clear and unambiguous communication in debt collection practices and the need for debt collectors to have robust procedures in place to handle disputes.
As discussed here, following the U.S. Supreme Court’s decision in Community Financial Services Association of America, Limited v. Consumer Financial Protection Bureau (CFPB or Bureau), which upheld the CFPB’s funding structure, the Bureau announced updated compliance dates for its Section 1071 Final Rule concerning small business data collection and reporting under the Dodd-Frank Act.
Dear Mary,
One of our critical service providers recently suffered a cyberattack. It’s all over the news, and our business operations are severely impacted. We’re losing money every day, and we have no idea how long this will last. Do you have any suggestions on what to do? The lack of information from our service provider is incredibly frustrating.
– Frustrated in Dallas
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:
On June 20, six federal financial services regulators issued the final automated valuation model (AVM) rule. The AVM rule, initially proposed in June 2023 and discussed here, aims to implement the quality control standards mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The final AVM rule is largely identical to the proposed rule and is set to take effect on the first day of the calendar quarter following 12 months after its publication in the Federal Register.
Dear Mary,
We received a data request from Health and Human Services, Office for Civil Rights, today. It was in connection with a data security incident that happened almost a year ago. Is this normal? Should this impact how we respond?
– Not Forgotten in New Orleans
On May 30, the U.S. Supreme Court unanimously decided Cantero, reaffirming and elaborating on the Barnett Bank preemption standard, and remanding the case to the Second Circuit for further proceedings. Cantero addressed whether a New York law requiring the payment of at least 2% per annum interest on mortgage escrow deposits was preempted by federal law as to national banks. The Supreme Court held that the Second Circuit erred when it failed to apply the preemption standard articulated in Barnett Bank of Marion County, N.A. v. Nelson, which was incorporated by Congress into the Dodd-Frank Act. The Court rejected the lower court’s holding “that federal law preempts any state law that ‘purports to exercise control over a federally granted banking power,’ regardless of ‘the magnitude of its effects.'” The Court also rejected the approach argued by the petitioners, explaining it would “yank the preemption standard to the opposite extreme, and would preempt virtually no non-discriminatory state laws that apply to both state and national banks.”
On June 18, a Colorado federal court granted the plaintiff trade groups’ motion for a preliminary injunction, effectively halting the enforcement of Colorado’s H.B. 1229 with respect to loans made by out-of-state state-chartered banks.
On June 18, the Fifth Circuit Court of Appeals granted the plaintiffs’ petition for a writ of mandamus, effectively halting the transfer of the lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) credit card late fee rule from a Texas federal district court to the District of Columbia. This decision marks another pivotal moment in the ongoing legal battle over the CFPB’s Final Rule, which has seen a complex procedural history unfold over the past few months.
Over the course of the last year, the Consumer Financial Protection Bureau (CFPB or Bureau) has increased its scrutiny of medical financing products, such as medical credit cards and installment loans. In July 2023, the CFPB and other federal agencies launched an inquiry into medical payment products, discussed here. Last week, when the CFPB announced its proposed rule to ban the reporting of medical debt on consumer reports, discussed here, it stated it was considering action related to medical financing products. Then this week, the CFPB published a blog examining how financial institutions market their products to healthcare providers in an effort to ensure “consumers aren’t pushed into medical payment products.” The CFPB’s ongoing discourse on this topic signals a potential regulatory crackdown may be coming.