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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 can skip this test if they offer a “principal-payoff option.” The new rule also limits the number of times that a lender can access a borrower’s bank account.

The new rule covers loans that require consumers to repay all or most of the debt at once, including payday loans with 45-day repayment terms, auto title loans with 30-day terms, deposit advance products, and longer-term loans with balloon payments. The CFPB claims that these loans lead to a “debt trap” for consumers when they cannot afford to repay them. “Too often, borrowers who need quick cash end up trapped in loans they can’t afford,” said CFPB Director Richard Cordray in a statement.

Payday loans are typically for small-dollar amounts and require repayment in full by the borrower’s next paycheck. The lender charges fees and interest that the borrower must repay when the loan becomes due. Auto title loans operate similarly, except that the borrowers put up their vehicles as collateral. As part of the loan, borrowers allow the lender to electronically debit funds from their checking account at the end of the loan term.

The Full-Payment Test

Under the new rule, lenders must now determine whether the borrower can make the loan payment and still afford basic living expenses and other major financial obligations. For payday and auto loans that are due in one lump sum, the test requires that the borrower can afford to pay the full loan amount, including any fees and finance charges, within two weeks or a month. For longer-term balloon payment loans, lenders must assess whether the borrower can afford the payments in the month with the highest total payments on the loan.

Additionally, the rule caps the number of short-term loans a lender can extend to a borrower to three in quick succession. Likewise, lenders cannot issue loans with flexible repayment plans if a borrower has outstanding short-term or balloon-payment loans.

Principal-Payoff Option

Lenders can avoid the full-payment test on certain short-term loans up to $500. To qualify for this exemption, the lender may offer up to two extensions, but only if the borrower pays off at least one-third of the original principal each time. A lender may not offer these loans to a borrower with recent or outstanding short-term or balloon-payment loans. This option is not available for auto title loans.

Account Debit Limits

The new rule also restricts the number of times that a lender can access a borrower’s bank account. After two unsuccessful attempts, the lender may not debit the account again without reauthorization from the borrower.

The Bureau has excluded from the rule some loans that it claims pose less risk. It excludes lenders who make 2,500 or fewer short-term or balloon payment loans per year and derive no more than 10 percent of their revenues from such loans.

This new rule will take effect 21 months after it is published in the Federal Register.

Conclusion

Payday lenders should immediately begin putting into place revised compliance procedures regarding how they qualify borrowers. Otherwise, they could find themselves in violation of the rule.

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 contracts containing arbitration provisions. The Rule is scheduled to take effect on March 19, 2018 and will govern contracts executed after that time.

The Substance of the Rule

The Rule contains requirements that apply to a provider’s use of a “pre-dispute arbitration agreement” that is entered into on or after the compliance date.  The Rule defines “pre-dispute arbitration agreement” as an agreement that (1) is between a covered person and a consumer, and (2) provides for arbitration of any future dispute concerning a covered consumer financial product or service.  The form or structure of the agreement is not determinative; an agreement can be a pre-dispute arbitration agreement under the Rule regardless of whether it is a standalone agreement, an agreement or provision that is incorporated into, annexed to, or otherwise made a part of a larger contract, is in some other form, or has some other structure.

The Rule prohibits a provider from relying on a pre-dispute arbitration agreement entered into after the compliance date with respect to any aspect of a class action that concerns any covered consumer financial product or service.  That prohibition may apply to a provider with respect to a pre-dispute arbitration agreement initially entered into between a consumer or a covered person other than the initial provider, such as debt collectors seeking to collect on the contract or assignees of the contract.  The CFPB also specifically stated that the Rule applies to “indirect automobile lenders,” using them as an example of covered entities.

The Rule requires that, upon entering into a pre-dispute arbitration agreement, a provider must ensure that certain language set forth in the Rule is included in the agreement.  Generally, the required language informs consumers that the agreement may not be used to block class actions.

The Rule also requires providers that use pre-dispute arbitration agreements to submit to the CFPB certain records relating to arbitral and court proceedings.  The requirement to submit these records applies to: (1) specified records filed in any arbitration or court proceedings in which a party relies on a pre-dispute arbitration agreement; (2) communications the provider receives from an arbitrator pertaining to a determination that a pre-dispute arbitration agreement does not comply with due process or fairness standards; and (3) communications the provider receives from an arbitrator regarding a dismissal of or refusal to administer a claim due to the provider’s failure to pay required filing or administrative fees.

The CFPB will use information it collects to continue monitoring arbitral and court proceedings to determine whether there are consumer protection concerns that may warrant further Bureau action.  The CFPB is also finalizing provisions that will require it to publish on its website the materials it collects, with appropriate redactions as warranted, to provide greater transparency into the arbitration of consumer disputes.

Small Business Compliance Guide

In late September, the CFPB issued a small entity compliance guide designed to assist small businesses providing covered financial products and services with compliance with the Rule.  The guide provides an additional, succinct summary of the requirements of the Rule, and it sets forth a number of illustrations as to when the Rule does and does not apply.

Due to this additional interpretative guidance, along with the strict potential penalties for non-compliance with the Rule, all companies offering consumer products and services and utilizing arbitration provisions should be familiar with the guide and consult counsel on further compliance issues, as necessary.

Troutman Sanders LLP will continue to monitor developments with the CFPB’s arbitration Rule, including challenges to its implementation.

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 mortgage lending activities.  The HMDA’s purpose is to help determine whether financial institutions are serving the housing needs of their communities; to assist public officials in distributing public-sector investment and attracting private investment in areas where it is needed; and to identify possible discriminatory lending patterns and enforce anti-discrimination statutes.  To achieve these goals, the CFPB plans to disclose most of the collected data to the public in 2019.

The CFPB proposes to exclude the following data from public disclosure to protect the privacy of applicants and borrowers:

  • the universal loan identification number;
  • the application date;
  • the date of action taken by the financial institution on a covered loan or application;
  • the address of the property securing the loan or, in the case of an application, proposed to secure the loan;
  • the applicant’s credit score relied on in making the credit decision;
  • the unique identification number assigned by the Nationwide Mortgage Licensing System and Registry for the mortgage loan originator;
  • the result generated by the automated underwriting system used by the financial institution to evaluate the application; and
  • free-form text fields used to report the following: applicant or borrower race and ethnicity; the name and version of the credit scoring model used to generate each credit score or credit scores relied on in making the credit decision; the principal reason or reasons the financial institution denied the application, if applicable; and the automated underwriting system name.

The CFPB also proposes to reduce the specificity of some information disclosed to the public.  For instance, the applicant’s or borrower’s age will be published as a range rather than as a specific number, and property values or loan amounts will be reported in $10,000 increments.

The CFPB has said that these proposed changes seek to maintain a balance of privacy risks and benefits of disclosure, and it has invited public comment on the proposals.

Also on September 20, in a related action, the CFPB issued a final rule modifying Equal Credit Opportunity Act regulations to provide flexibility and clarity to mortgage lenders in the collection of consumer ethnicity and race information.  ECOA is aimed at protecting against discrimination in the financial marketplace and restricts lenders’ ability to ask consumers about their race, color, religion, national origin, or gender, except in certain circumstances.  The finalized rule now allows lenders to ask mortgage applicants more detailed questions about their race and ethnicity and provides lenders the ability to use a broader range of uniform documents, including the Uniform Residential Loan Application.

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 of his entities on July 8, 2016.

According to the CFPB, Zero Parallel receives leads from consumers looking for quick, small-dollar installment loans, commonly referred to as “payday loans”, and sells those leads to lenders and remarketing companies.  According to the CFPB, consumers interested in obtaining such loans would enter their personal information into a form on the company’s website.  Zero Parallel would then sell the consumers’ information to various lenders who would contact the consumers to provide and/or service the loan.

The CFPB alleged that, because it was collecting consumers’ information, Zero Parallel knew that certain consumers lived in states where loans of this type were prohibited.  It alleged that despite that knowledge, Zero Parallel would nonetheless connect lenders with consumers in those states.  The CFPB also alleged that after the consumers submitted their information, they would not be able to choose their lender and would not be given information about the lender providing the loan.

Under the terms of the order, Zero Parallel will pay a $100,000 penalty and has agreed to take “reasonable efforts” to ensure it only matches consumers with lenders that are permitted to offer loans in the states where those consumers live.  The owner of Zero Parallel will pay $250,000, although he did not admit or deny the allegations in the complaint.

In July 2016, a similar complaint was filed against Davit (a/k/a “David”) Gasparyan for his actions at T3Leads, another payday loan lead aggregator, for violations of the Consumer Financial Protection Act.

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 consumers include September 11 first responders, former National Football League players who sustained  neurological injuries from the sport, and victims of the Deepwater Horizon oil rig explosion and oil spill.  Top Notch is headquartered in Verona, New Jersey, with Donadio as its owner and CEO.  Cavalli is Donadio’s business associate and is based in New York City.

The complaint alleges that Donadio authorized Cavalli to recruit customers for Top Notch using a variety of methods, including solicitation through phone calls, websites, and social media.  The loans allegedly were offered to beneficiaries of settlements or victim compensation funds, who had been formally approved to receive payment.  Top Notch would agree to provide those consumers with small portions of the expected payouts, with a larger amount to be repaid to Top Notch  after the consumers actually received their compensation payments or awards.

Top Notch allegedly deceived these consumers by:

  • Misrepresenting the actual cost of the loans by advertising that the loans would have an annual percentage rate of 2% and a 1% interest rate, although every loan brokered by Top Notch had higher rates;
  • Telling consumers in marketing materials and other communications that proceeds could be received in as little as one hour, when in fact funds were not available that quickly, and often took weeks to receive; and
  • Representing that Top Notch had offices in all 50 states with legal, financial, and accounting professionals on staff, while Top Notch had no offices and no professionals on staff.

If the proposed consent order is entered by the court, Top Notch, Donadio, and Cavalli would be prohibited from offering or providing these loans to consumers awaiting settlement or victim compensation payments.  The proposed order would also require Top Notch and Donadio to jointly pay $60,000 into the CFPB’s Civil Penalty Fund, and Cavalli to pay $10,000 into the Civil Penalty Fund.

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 online lending platform that enables people with limited credit or work history to obtain credit. Upstart touts its ability to identify differences in risk between “thin file” applicants by using signals beyond traditional credit scores. Primarily, Upstart compliments traditional underwriting signals with a borrower’s work history and education. Upstart may take into account the school attended, degree obtained, and current employment to analyze the borrower’s financial capacity and propensity to pay. Upstart claims in the no-action letter application that including this information provides borrowers who otherwise may not qualify for credit the opportunity to borrow on more favorable terms.

Since launching its lending platform in 2014, Upstart has originated over 80,000 loans totaling more than $1 billion. The loans range from $1,000 to $50,000 with an average loan of $12,000. The repayment term is either 36 months or 60 months. The typical borrower is 28 years old and uses the loan to pay down credit card debt. Others consolidate payday or other unsecured debt, reduce student loan debts, or pay for graduate school tuition. Interest rates range from 4% to 25.9%.

CFPB’S NO-ACTION LETTER POLICY

The CFPB’s letter marks the first of its kind since the Bureau announced the no-action letter policy in early 2016. Under the program, companies implementing a new product or service can apply for a statement from the Bureau that would reduce regulatory uncertainty. Applicants must submit responses to a series of questions, including detailed descriptions of the product or service and the benefits and risks to consumers. The Bureau implemented the policy to incentivize companies to develop safe and innovative products and approaches. Anticipating that it will issue no-action letters in only exceptional circumstances, the CFPB will publish a no-action letter that it grants, but will not publish the denial of a request for a no-action letter.

CFPB’S NO-ACTION LETTER TO UPSTART

The no-action letter to Upstart indicates that the Bureau has no present intent to recommend initiation of supervisory or enforcement action against Upstart with respect to the Equal Credit Opportunity Act. According to the terms of the letter, Upstart has agreed to provide the Bureau with certain information regarding loan applications, the criteria used to decide which loans to approve, how it will mitigate risk to consumers, and how its model expands access to credit for underserved populations. The Bureau will use this information as part of the inquiry into alternative data that it launched earlier this year.

The scope of the no-action letter is limited to Upstart’s automated model for underwriting applicants for unsecured non-revolving credit. The Bureau went to great lengths to limit the effect of the letter, claiming that the letter could not be viewed as an interpretation, waiver, safe harbor, or something similar.

IMPLICATIONS OF THE LETTER

Although the no-action letter reveals that the CFPB remains committed to completing its inquiry into the use of alternative data to expand credit, it offers little guidance outside of the contours of Upstart’s platform and Upstart may still have to deal with fair lending issues with the CFPB down the road. With respect to this first no-action letter, initial reactions from the industry reveal disappointment in light of the fact that the letter offers little industry guidance.

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 additional $1.15 million in consumer remediation and $1.75 million in civil money penalties.

Those numbers are down sharply from the same period in 2016.  In fact, from January through April of last year, the CFPB’s nonpublic supervisory activities led to restitution payments that totaled approximately $24.6 million, and public enforcement actions that netted an additional $5 million in consumer remediation and $3 million in civil money penalties.

Looking to the details.  In a press release, the CFPB noted that the Supervisory Highlights “shares information that companies can use to comply with federal consumer finance laws.”   For business, though, Supervisory Highlights is perhaps most valuable for revealing the agency’s supervisory priorities.

Indeed, as we have noted before on this blog, the CFPB employs a risk-based approach to supervision.  As such, the CFPB concentrates its supervisory efforts on institutions and product lines that it believes pose the greatest risk to consumers.  Supervisory Highlights provides a window into that approach.

The Supervisory Highlights indicates that the CFPB continues to focus its supervisory efforts specifically on:

  • Banks that the CFPB believes may be deceiving consumers about checking account fees and overdraft coverage, including by inaccurately describing when fees will be waived or inaccurately describing the features of their overdraft coverage offerings.
  • Credit card companies that the CFPB believes may be deceiving consumers about the cost and availability of pay-by-phone options, including by failing to disclose cost-free pay-by-phone options and instead mentioning only expedited fee-based pay-by-phone options.
  • Auto lenders that the CFPB believes may be wrongly repossessing vehicles, particularly when repossessions have been cancelled, accounts were no longer delinquent, and sufficient payments had been made to avoid repossession.
  • Debt collectors that the CFPB believes may be improperly communicating about debt, including by discussing borrowers’ debts with third parties without debtors’ consent, attempting to collect debts from the wrong parties, and calling borrowers at work despite requests not to do so.
  • Mortgage companies that the CFPB believes may be failing to follow the Know Before You Owe mortgage disclosure rules, including by overcharging closing fees and wrongly charging application fees before consumers had agreed to the transaction.
  • Mortgage services that may be failing to follow the CFPB’s servicing rules, including by failing to review borrowers’ initial loss mitigation application to determine what documents were missing, failing to disclose available forbearance options, and failing to exercise reasonable diligence in collecting information to complete a borrowers’ forbearance applications.

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 have its witness answer inquiries regarding the CFPB’s factual basis for its claims. After a comprehensive review of the CFPB’s apparent efforts to avoid the Defendants’ depositions, District Court Judge Richard Story struck all claims brought by the CFPB against the defendants who filed the motion for sanctions.

The CFPB filed the action in March of 2015 against numerous individuals, debt collectors, and payment processors for alleged violations of the Consumer Financial Protection Act and Fair Debt Collection Practices Act arising from Defendants’ actions in connection with an alleged nation-wide debt collection scheme. The CFPB alleged the Defendant debt collectors used automated telephone broadcasting services and individual collectors to threaten, intimidate, and harass millions of consumers into paying debts the consumers did not owe. The CFPB claimed the Defendant payment processors helped facilitate payment from the defrauded consumers to the debt collectors with knowledge of the debt collectors’ unlawful activity. 

During discovery, Defendants served multiple Rule 30(b)(6) deposition notices on the CFPB in an effort to discover the factual basis for the claims. The CFPB raised numerous objections to the deposition notices; however, the Court ordered the CFPB to provide a witness who could answer questions regarding the CFPB’s factual basis for its claims. Depositions took place in April 2017. During those depositions, the CFPB’s witness reportedly read from a lengthy, repetitive, and sometimes unresponsive, script; including one instance where the witness read from the script for over an hour, virtually uninterrupted. In addition, the CFPB’s counsel repeatedly objected to Defendants’ questions on privilege grounds despite the Court’s previous directive that such questions were appropriate. The CFPB continued this pattern of behavior even after admonishment from the Court following the first deposition.

Defendants moved for sanctions under Rule 37(b) and (d) and asked the Court to dismiss the CFPB’s claims. Relying on portions of the deposition transcripts as well as prior verbal orders of the Court, Judge Story found the CFPB had “willfully violated the Court’s repeated instructions to identify for Defendants the factual bases for its claims and that, in each deposition, it willfully failed to present a knowledgeable 30(b)(6) witness.” The Court declined to re-open the depositions because doing so was, in the Court’s view, futile. The Court then struck counts eight through eleven of the Complaint and dismissed Defendants Frontline Processing Corp.; Global Payments, Inc.; Pathfinder Payment Solutions, Inc.; Electronic Merchant Systems, Inc.; and Global Connect, LLC from the action.

The Court’s decision is significant in that it reflects a federal Court’s willingness to hold the CFPB to the same standards as other litigants. Although the decision provides little support with regards to any substantive legal interpretation of the CFPA and FDCPA, the Court’s willingness to require the CFPB to provide a knowledgeable deposition witness to testify regarding the CFPB’s factual basis for its claims is a potentially powerful weapon for debt collectors to use in CFPB-originated actions.

The case is Consumer Financial Protection Bureau v. Universal Debt Solutions, LLC, et al., Civil Action No. 1:15-cv-859-RWS (N.D. Ga.).

A California district court approved a settlement between Prime Marketing Holdings LLC and the Consumer Financial Protection Bureau, whereby Prime Marketing agreed to pay $150,000 and be banned from offering credit repair services.  The settlement was a result of the CFPB’s September 2016 suit against Prime Marketing for allegedly misleading consumers and charging illegal fees. 

The proposed stipulated final judgment between the parties states that “[b]etween October 1, 2014 and at least June 30, 2017, [Prime Marketing] has charged over 50,000 consumers over $20 million for credit repair services, and returned approximately $1.5 million of these fees to consumers through either refunds or chargebacks.”

Under federal law, telemarketers and certain companies are prohibited from requesting or collecting fees for credit repair services until certain conditions are met regarding the delivery of services.  In its suit, the CFPB alleged that Prime Marketing’s practices violated federal law when it charged customers for fees before it could prove its services had been provided.  Apparently, the charges included initial setup fees the company said were to get special credit reports – fees that could be hundreds of dollars and recurring monthly fees of approximately $90.   

In addition to the fees, the CFPB alleged Prime Marketing misrepresented its ability to remove negative information from consumer credit reports and that its services would result in a “substantial increase to consumers’ credit scores generally by an average of 100 points.”

The case is Consumer Financial Protection Bureau v. Prime Marketing Holdings LLC, Case No. 2:16-cv-07111, in the United States District Court for the Central District of California.  A copy of the proposed final order is available here.

 

On August 25, the United States District Court for the Northern District of Georgia struck four counts of a complaint filed by the Consumer Financial Protection Bureau because it failed to abide by the Court’s discovery order.

This matter began on March 26, 2015, when the CFPB filed a complaint against 12 debt collectors, four payment processors, and a telephone broadcast service provider for violations of the Consumer Financial Protection Act (“CFPA”).  The CFPB claimed the debt collectors engaged in a scheme to defraud consumers by using threats and harassment to collect “phantom” debts.  According to the complaint, the debt collectors used automated telephone dialers to contact consumers and their family members with false allegations of check fraud and false claims of debt owed.  The CFPB alleged that the debt collectors told consumers that failure to pay the debt would result in a “financial restraining order,” notice to the consumer’s employer of the alleged debt, wage garnishment, and arrest.  According to the complaint, the debt collectors refused to identify to the consumers the issuer of the supposed debt, but attempted to convince the consumers of their legitimacy by providing the consumers’ personal information.  The CFPB further claimed that many of the consumers targeted by the debt collectors did not owe the debt.  The complaint further alleged that the payment processors facilitated the debt collectors’ fraud by enabling the debt collectors to accept payment by consumers’ bank cards when the payment processors were aware the debt collectors were engaging in wrongful conduct.

The CFPB claimed the payment processors violated the CFPA by assisting the debt collectors’ unfair or deceptive conduct (Counts VIII and X) and engaging in unfair acts or practices (Counts IX and XI) for failing to perform reasonable investigations to detect the debt collectors’ unlawful conduct.

In August 2016, the payment processors served the CFPB with a Rule 30(b)(6) deposition notice.  The CFPB objected to the notice, arguing that the Court should not require the CFPB to sit for the deposition for three reasons: (1) the information the payment processors sought in the deposition was already provided by the CFPB in response to the payment processors’ interrogatories; (2) the noticed topics were protected by the law enforcement and deliberative process privilege; and (3) the depositions improperly sought the CFPB’s counsel’s mental impressions and analyses.

The Court rejected the CFPB’s objections but limited the deposition inquiries to factual matters for each allegation against the payment processors.

In April 2017, one of the payment processors took the CFPB’s 30(b)(6) deposition.  Following this deposition, the payment processors objected to the CFPB’s witness’s use of “memory aids” to deliver unresponsive answers to the deposition questions.  They also objected to the CFPB’s use of privilege, preventing the witness from answering questions about the facts underpinning the CFPB’s allegations.  Again, the Court ordered the CFPB to answer questions regarding the facts of its allegations against the payment processors.  According to the payment processors, the CFPB continued to provide nonresponsive answers and to assert privilege when questioned about facts related to its allegations against the payment processors.

In response to the CFPB’s non-compliance with the Court’s order, the payment processors sought sanction on the basis of Rule 11 and Rule 37 to strike the CFPB’s claims against the payment processors.

The crux of the payment processors argument for Rule 11 sanctions was based on the fact that the CFPB filed the complaint against them based on a single month of misleading chargeback data.  The payment processors argued that viewing the account as a whole shows that the payment processors monitored the debt collectors’ account in accordance with industry standards.  The Court denied the payment processors’ motion for Rule 11 sanctions, holding that Rule 11 sanctions are not meant to test the legal sufficiency of the allegations in the pleading, which the payment processors sought to do.

The Court granted the payment processors’ motion for Rule 37 sanctions, holding that the CFPB’s pattern of conduct in willfully ignoring the Court’s order warranted the striking of the claims against the payment processors.  In reaching the decision, the Court referred to the CFPB’s use of memory aids to answer deposition questions, noting that in some instance it took the witness 40 minutes to recite the memory aid without actually answering the payment processors’ questions.  The Court also reviewed the deposition transcript, noting that the CFPB’s counsel claimed privilege on questions related to factual underpinnings of its claims.

The Court dismissed counts VIII through XI of the CFPB’s complaint, thereby dismissing all claims against the payment processors.  The CFPB’s claims against the debt collectors remain.