On October 23, the U.S. Department of the Treasury released a report objecting to the Consumer Financial Protection Bureau’s arbitration rule. As we previously reported, the rule prevents class action waivers in arbitration provisions for covered entities and also requires covered entities to provide information to the Bureau regarding any efforts to compel arbitration.
CFPB Rule Requires Payday Lenders to Apply “Ability to Repay” Standard to Loans
Today the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) issued a new rule that will have a significant impact on the payday lending market. The CFPB will now require lenders to conduct a “full-payment test” to determine upfront whether the borrower will have the ability to repay the loan when it becomes due. Lenders
CFPB Issues Guidance to Small Businesses on Complying With Rule Banning Class Action Waivers
On July 10, the Consumer Financial Protection Bureau issued its long-awaited final Rule banning class action waivers in arbitration provisions for covered entities, as well as requiring the covered entities to provide information to the CFPB regarding any efforts to compel arbitration. This Rule is of significance to any financial services company that utilizes consumer
U.S. Chamber of Commerce and Other Business Associations Sue to Overturn Ban on Class Action Waivers
The U.S. Chamber of Commerce and other business groups have filed a federal lawsuit seeking to invalidate the Consumer Financial Protection Bureau’s Rule banning class action waivers in arbitration provisions contained in financial institutions’ contracts with consumers. Compliance with the Rule would be required beginning March 19, 2018. The lawsuit was filed in the United
CFPB Proposes Modifications to Home Mortgage Law to Protect Borrowers’ Privacy
On September 20, the Consumer Financial Protection Bureau issued proposed policy guidance that would modify a mortgage disclosure law in an effort to protect applicants’ and borrowers’ privacy.
In 2015, the CFPB finalized changes to the Home Mortgage Disclosure Act (“HMDA”), which requires lenders to report and disclose to the public certain information about their
CFPB Takes Action Against Zero Parallel LLC for Issuing Allegedly Illegal Payday Loans
On September 5, the Consumer Financial Protection Bureau signed a consent order against payday and installment loan company Zero Parallel LLC and its president and primary owner for acts the CFPB alleged were unfair, deceptive, and abusive. The order concludes the matter initiated by a complaint filed against the owner of Zero Parallel and another
CFPB Files Suit Against Litigation Loan Company
On September 19, the Consumer Financial Protection Bureau filed a complaint, together with a proposed consent order, against Top Notch Funding II, LLC, Rory Donadio, and John “Gene” Cavalli, alleging that the defendants engaged in deceptive practices in offering loans to consumers who are awaiting payments from settlements or victim compensation funds. These
CFPB Issues First No-Action Letter to Online Lender Using Alternative Data
On Thursday, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) issued its first no-action letter to Upstart Network, Inc., an online lender. The no-action letter green-lights the lender’s use of alternative data in marketing and pricing decisions. In exchange, Upstart will report lending and compliance information to the CFPB.
UPSTART’S MODEL
California-based Upstart provides an
CFPB’s Latest Supervisory Highlights Provides Valuable Statistics and Insight on Enforcement Efforts
The Consumer Financial Protection Bureau recently released its Summer 2017 Supervisory Highlights, which summarizes the agency’s supervisory activities during the first half of this year.
Looking to the numbers. From January through June, the CFPB’s nonpublic supervisory activities led to restitution payments that totaled approximately $14 million, and public enforcement actions that netted an
Federal District Court Sanctions CFPB for Failing to Provide Knowledgeable Deposition Witness
On August 25, 2017, the United States District Court for the Northern District of Georgia entered an order granting multiple Defendants’ consolidated motion for sanctions against the Consumer Financial Protection Bureau. Defendants’ Rule 37 motion alleged the CFPB failed to produce a knowledgeable deposition witness and also failed to follow the Court’s various orders to