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Today, the U.S. Supreme Court issued a unanimous decision in Smith v. Spizzirri holding that § 3 of the Federal Arbitration Act (FAA) requires district courts to issue an order staying a federal case pending the outcome of arbitration, rather than dismiss the case when a motion to compel arbitration is granted. This decision resolves a circuit split where previously the Second, Third, Sixth, Seventh, Tenth, and Eleventh Circuits had held that the plain text of § 3 mandates a stay of the proceedings whereas the First, Fifth, Eighth, and Ninth Circuits had held that district courts have the discretion to dismiss the proceedings if the entire dispute was subject to arbitration.

In Holden v. Holiday Inn Club Vacations Inc., the U.S. Court of Appeals for the Eleventh Circuit recently upheld a consolidated district court ruling granting summary judgment for the defendant furnisher in two Fair Credit Reporting Act (FCRA) actions centering on whether the consumers’ disputes with the furnisher were actionable. While the Eleventh Circuit declined to impose a bright-line rule that only FCRA claims based on factual disputes are actionable, it affirmed the district courts’ summary judgment ruling, finding that for consumer disputes to be actionable against furnishers, the alleged inaccuracy must be “objectively and readily verifiable.”

In Soliman v. Subway Franchisee Advertising Fund Trust, Ltd, the plaintiff alleged that the defendant violated the Telephone Consumer Protection Act (TCPA) by sending a text message to her cell phone using an automatic telephone dialing system (ATDS) and which utilized an “artificial or prerecorded voice.” The Second Circuit affirmed the district court’s decision to dismiss the case because the TCPA did not apply.

On May 2, the U.S. Department of Housing and Urban Development (HUD) released two sets of guidance addressing the applicability of the Fair Housing Act (FHA) to two areas where, in the agency’s view, algorithmic processes and artificial intelligence (AI) pose particular concerns: tenant screening and advertising of housing opportunities through online platforms that use targeted ads. The purpose of HUD’s guidance is to make housing providers, tenant screening companies, advertisers, and online platforms aware that the FHA applies to tenant screening and housing advertising, including when algorithms and AI are used to perform those functions.

On May 10, a Texas federal court granted a preliminary injunction enjoining the Consumer Financial Protection Bureau (CFPB or Bureau) from implementing the credit card late fee rule, most recently discussed here. The court found the plaintiffs demonstrated a likelihood of success based on their reliance on the Fifth Circuit’s decision in CFPB v. Community Financial Services Association of America, Ltd. finding that the CFPB’s “double-insulated funding scheme is unconstitutional.” The court further found that the balance of interest test weighed in the plaintiffs’ favor because if the court denied the injunction, “[p]laintiffs face an enormous undertaking based upon a potentially unconstitutional rule,” whereas if the court granted the injunction “the CFPB is relatively unaffected because the Final Rule has not yet gone into effect.”

Today, the Consumer Financial Protection Bureau (CFPB or Bureau) published an Issue Spotlight focusing on consumer complaints relating to credit card rewards programs. The report notes that credit card companies often focus marketing efforts on rewards, like cash back and travel, instead of on interest rates and fees. However, the CFPB has previously reported that consumers who carry debt from month to month earn just 27% of rewards at major credit card companies, while paying 94% of the interest and fees that those companies charged. In its analysis of several hundred complaints relating to these rewards programs, the Bureau identified four recurring themes: 1) vague or hidden promotional conditions; 2) devalued rewards; 3) customer service issues that delay or block reward redemption; and 4) issuers unilaterally revoking reward balances.

On May 3, the U.S. Court of Appeals for the Fifth Circuit entered an order denying the CFPB’s (CFPB) petition for a panel rehearing and effectively setting the stage for a long-awaited ruling on a preliminary injunction in the ongoing lawsuit challenging the CFPB credit card late fee rule. The petition was filed by the CFPB to reconsider the panel’s order vacating the district court’s order that transferred the case to the U.S. District Court for the District of Columbia and issuing a writ of mandamus directing the district court to reopen the case.

The U.S. Court of Appeals for the Third Circuit has recently underscored the fact that a plaintiff does not automatically gain Article III standing under the Fair Debt Collections Practices Act (FDCPA) simply because they are confused by a letter.