State Attorneys General, CFPB + FTC

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Earlier this month, we discussed the lawsuit filed by ACA International, LLC and Collection Bureau Services, Inc. in the U.S. District Court for the District of Columbia against the Consumer Financial Protection Bureau (CFPB or Bureau) and Director Rohit Chopra. The lawsuit challenges the CFPB’s October 1, 2024 advisory opinion on medical debt collection practices. The plaintiffs are seeking an order vacating the advisory opinion and a stay of the effective date pending the conclusion of the case.

On November 18, the plaintiff trade groups in Community Financial Services Association of America, Ltd.(CFSA) v. Consumer Financial Protection Bureau (CFPB) filed an Opposed Motion for Clarification of Stay Pending Appeal asking the U.S. Court of Appeals for the Fifth Circuit to clarify that its stay of the compliance date for the CFPB’s payday loan rule extends until the time for filing a new petition for certiorari with the Supreme Court has expired or, if the petition is filed, until the Supreme Court finally disposes of the case. At a minimum, the trade groups ask the Fifth Circuit to clarify that its existing stay expires 286 days after the court’s recent issuance of its mandate (that is, August 25, 2025) and not on March 30, 2025.

On November 14, the Consumer Financial Protection Bureau (CFPB or Bureau) filed a significant consent order against Global Tel Link Corporation (GTL), a company that provides communication and financial services to correctional facilities. The CFPB found that GTL, along with its subsidiaries Telmate, LLC and TouchPay Holdings, LLC, engaged in illegal practices that adversely affected incarcerated individuals and their friends and families.

On November 13, Representative Gary J. Palmer (R-AL) introduced House Joint Resolution 220, which seeks congressional disapproval of an advisory opinion published by the Consumer Financial Protection Bureau (CFPB or Bureau) relating to medical debt collection practices.

On November 12, the U.S. Court of Appeals for the Fifth Circuit denied a request from Community Financial Services Association of America (CFSA) and the Consumer Services Alliance of Texas to reopen their legal challenge against the Consumer Financial Protection Bureau’s (CFPB) payday loan rule. This decision effectively clears the path for the rule to be implemented.

On November 1, ACA International, LLC and Collection Bureau Services, Inc. filed a lawsuit against the Consumer Financial Protection Bureau (CFPB or Bureau) and Director Rohit Chopra, challenging the CFPB’s recent advisory opinion on medical debt collection practices. The lawsuit, filed in the U.S. District Court for the District of Columbia, challenges the CFPB’s authority and the procedural validity of the advisory opinion. The plaintiffs are seeking an order vacating the advisory opinion and a stay of the effective date pending the conclusion of the case.

In a significant development, the Consumer Financial Protection Bureau (CFPB or Bureau) has finally reached a settlement with Townstone Financial, Inc. (Townstone) in the first redlining case brought against a nonbank mortgage lender and broker. This settlement follows the Seventh Circuit Court of Appeals’ pivotal decision in favor of the CFPB that expanded the Equal Credit Opportunity Act (ECOA) to include protections for prospective applicants who may be discouraged from applying for credit. The settlement marks a resolution of protracted litigation that began in 2020 when the CFPB sued Townstone by accusing the company of redlining practices.

On October 31, the U.S. Court of Appeals for the Fifth Circuit Court of Appeals granted the appellants’ motion to expedite the appeal in Texas Bankers Association v. Consumer Financial Protection Bureau (CFPB). The suit brought by several trade associations challenges the CFPB’s Final Rule under § 1071 of the Dodd-Frank Act, the “Small Business Lending Data Collection Rule” (Final Rule). The court scheduled oral argument for February 3, 2025. However, in that same order, the court denied appellants’ motion for a temporary stay of the Final Rule’s compliance dates, stating that the motion for a stay pending appeal “remained pending.” This means that the compliance dates set forth in the CFPB’s Interim Final Rule remain for now, with the earliest date for the largest lenders being July 18, 2025.

Earlier this week, we discussed the Federal Trade Commission’s (FTC) final amendments to the Negative Option Rule, now retitled the Rule Concerning Recurring Subscriptions and Other Negative Option Programs. These amendments, which are set to take effect 180 days after publication in the Federal Register, are purportedly aimed at stopping deceptive and unfair practices in negative option marketing. However, the rule has now drawn a legal challenge.