Consumer Financial Services

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The Eleventh Circuit has now joined seven other circuits in holding that receipt of unwanted text messages constitutes concrete injury for standing. On July 24, the Eleventh Circuit issued an en banc decision in Drazen v. Pinto, holding that a plaintiff who received a single, unwanted text message has standing to sue under the Telephone Consumer Protection Act (TCPA). The court departed from its earlier ruling in Salcedo v. Hanna, which held that a single unsolicited text message is but a “brief, inconsequential annoyance [] categorically distinct from those kinds of real but intangible harms” that confer Article III standing.

In April, we discussed how Colorado’s state supreme court issued its highly anticipated decision confirming a borrower’s bankruptcy discharge does not accelerate secured installment debt or trigger the final statute of limitations period to recover the debt. Now, Washington’s high court has rendered its decisions on the topic, joining the handful of states to address this trending issue.

On July 13, U.S. Senators Cynthia Lummis (R-WY), Kirsten Gillibrand (D-NY), Elizabeth Warren (D-MA), and Roger Marshall (R-KS) introduced an amendment to the National Defense Authorization Act (NDAA) that seeks to examine the adequacy of current anti-money laundering obligations (set forth in the Bank Secrecy Act (BSA)) as applied to crypto assets, crypto asset kiosks…

The Federal Reserve (Fed) has officially launched its new instant payment service, FedNow, which aims to modernize the U.S.’s payment system. As previously discussed here and here, consumers and businesses will be able to send and receive money within seconds, at any time of the day and on any day of the year. This will eliminate the one to three days’ lag time of traditional money transfers, providing the public with more flexibility in managing their money.

More than two years after the Supreme Court released its ruling in Facebook v. Duguid, confirming the meaning of automatic telephone dialing systems (ATDS) under the Telephone Consumer Protection Act (TCPA), a plaintiff has filed a petition for a writ of certiorari to the Supreme Court to challenge the Ninth Circuit’s application of the Facebook decision. The Facebook ruling effectively closed the door on one of the broadest classes of TCPA-related litigation; since then, plaintiff-side advocates have worked ceaselessly, though largely unsuccessfully, to chip away at the ruling. If the Supreme Court accepts the appeal, this will represent a significant development in the ongoing saga of ATDS litigation.

Deceptive advertisements, market manipulation, misappropriation of customer funds, and “Ask Me Anything (AMA)” sessions served as the catalysts of a civil enforcement action the Federal Trade Commission (FTC) recently filed against bankrupt digital asset services provider Celsius Network LLC (Celsius) and its co-founders on July 13. This is a groundbreaking move by the FTC for two reasons. First, it marks the first time that the agency has filed suit against a digital asset-based company. Second, the FTC’s request for civil money penalties is predicated on a novel theory under the Gramm-Leach-Bliley Act (GLBA). Alongside the FTC, the Department of Justice has filed criminal charges against ex-CEO Alexander Mashinsky, and the Securities and Exchange Commission and the Commodity Futures Trading Commission have filed separate civil enforcement actions against Celsius.

On July 12, U.S. Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) reintroduced legislation, titled the Responsible Financial Innovation Act that would establish a comprehensive regulatory framework for crypto assets. This proposed bill expands on the bill the senators introduced in 2022 by adding new consumer protections and safeguards to further strengthen the industry against fraud and bad actors, among other additions.

On July 7, Missouri Governor Mike Parson signed SB 103 into law, which prohibits any person from offering earned wage access (EWA) services without registering with the Division of Finance and paying an annual $1,000 fee. The law also requires EWA providers to develop procedures for dealing with consumer questions and complaints, specifies notices required to be given to consumers, and regulates the types of fees that may be charged and the manner in which repayments may be pursued. The law further specifies requirements should the EWA provider solicit, charge, or receive tips or gratuities from consumers. Like Nevada, discussed here, the law specifies that EWA products are not loans or money transmissions under Missouri law. In March 2023, the California Department of Financial Protection and Innovation took the opposite position with respect to EWA products and proposed new regulations under the California Financing Law that would update the definition of loan to include EWA products, except for those offered by employers.

On June 29, 2023, the Federal Communications Commission (FCC or Commission) issued a notice of proposed rulemaking clarifying how consumers may revoke consent to receive calls or texts under the Telephone Consumer Protection Act (TCPA). The FCC is accepting comments on the proposed rule until July 31, 2023.

On June 28, a magistrate judge in the U.S. District Court for the Southern District of Ohio issued a report recommending that the defendant’s motion to dismiss be denied because the plaintiff had standing under the Telephone Consumer Protection Act (TCPA) even though the calls in question were not intended for the plaintiff.