On January 9, 2025, 51 State Financial Regulatory Agencies (the “Agencies”) announced a coordinated consent order and settlement agreement with nonbank mortgage servicing companies (the “Companies”). This action came following a data breach that impacted 5.8 million customers, allegedly due to deficient cybersecurity practices, and for lack of cooperation with state regulators. The Companies are licensed as…
On January 7, 2025, the Consumer Financial Protection Bureau (“CFPB”) filed a complaint against a nationwide consumer reporting agency (“Agency”) under the Fair Credit Reporting Act (“FCRA”) and the Consumer Financial Protection Act of 2010 (“CFPA”). The CFPB claims that the Agency inadequately reinvestigated consumer disputes that challenged the information found in consumer…
The Consumer Financial Protection Bureau (“CFPB”) filed a complaint against a manufactured home loan company (the “Company”) on January 6, 2025, alleging that it originates loans that borrowers are unlikely to be able to repay in order to sell more homes, resulting in additional fees, penalties, and sometimes the loss of their…
In December 2024, the Consumer Financial Protection Bureau (CFPB) finalized a rule to update regulatory exemptions of overdraft loans from lending laws. According to the Bureau, this is a major step in the CFPB’s efforts to curb junk fees. Per the CFPB, for decades, overdraft loans have not only added…
In December 2024, the Consumer Financial Protection Bureau (Bureau) rolled out a series of important measures aimed at addressing potential misconduct in the credit card industry, improving consumer protections, and promoting transparency and competition in the market. The Bureau’s initiatives come at a time when credit card usage is peaking…
On Tuesday, November 26, the Minnesota Attorney General’s office (AG) announced it filed a consent order to resolve allegations that online lenders were charging interest on loans in excess of the amounts prescribed under Minnesota usury laws. Under the consent order, over $1 million in allegedly illegal loans were discharged….
On October 17, 2024, the Consumer Finance Protection Bureau (CFPB) announced that it had filed an action in the U.S. District Court for the Southern District of New York against an online lender of student loans, its wholly-owned subsidiaries, and the owners and operators of those entities (collectively, the Company)…
On November 7, 2024, the CFPB announced that it had entered into a consent order with a major credit union resolving allegations that the credit union improperly assessed overdraft fees against consumers. The credit union agreed to pay nearly $95 million to resolve the allegations. In its consent order, the CFPB alleged that…
On November 7, 2024, the California Department of Financial Protection and Innovation (DFPI) announced that it had entered into a settlement agreement with a cryptocurrency lender resolving allegations that the lender violated the California Financing Law (“CFL”). This action follows an examination by the DFPI in which the Department found that the crypto lender violated the CFL by (1) failing to consider…
On November 5, 2024, the FTC announced that it had filed suit against a California-based online cash advance provider for allegedly deceptive and misleading advertisements and representations, in violation of the FTC Act, 15 U.S.C. § 45(a), and the Restore Online Shoppers’ Confidence Act (“ROSCA”), 15 U.S.C. § 8403.z According to…
On November 4, 2024, the FTC announced that it had filed suit against a Georgia-based debt collector for engaging in allegedly deceptive and abusive debt collection practices, in violation of the FTC Act, 15 U.S.C. § 45(a), the FDCPA, 15 U.S.C. §§ 1692-1692p, and its associated Regulation F, 12 C.F.R. Part 1006, and the Gramm-Leach-Bliley…
On October 28, 2024, the Ninth Circuit struck a mass arbitration agreement as unconscionable and unenforceable under California law in Heckman v. Live Nation Ent., Inc., No. 23-55770. The three-judge panel affirmed the district court’s decision holding that the arbitration agreement’s delegation clause was unconscionable under California law. The panel…
On October 31, 2024, the CFPB announced that it had entered into a consent order with a credit union, resolving allegations that the union had ineffectively rolled out a new online banking platform that left consumers without adequate access to basic banking functions, and thereby inflicted financial harm. In May 2022, the credit union attempted to launch…
On October 23, 2024, the CFPB announced that it had entered into separate consent orders with a large tech company and a bank over a joint credit card venture. The CFPB alleges that the credit card, which combined the tech company’s software with the credit-backing of the bank, was launched prematurely, which…
On October 21, 2024, Connecticut Attorney General William Tong announced a settlement with a banking fraud prevention company (the Company), resolving allegations related to a data breach that impacted the personal information of a Connecticut Bank’s customers. The Company uses behavioral analytics and machine learning to help prevent banking fraud for its…
In September 2024, the CFPB announced the launch of a public comment process for the first application for open banking standard setter recognition, marking an important step towards establishing rules for open banking in the US. This development comes in the wake of the CFPB’s June 2024 announcement identifying five…
On October 7, 2024, alongside its Fall 2024 Supervisory Highlights, the CFPB summarized its other recent supervision activity related to illegal practices undertaken by auto lenders and auto loan servicers. Add-On Products: The CFPB examiners flagged several alleged issues in how add-on products were treated by auto-lenders. First, the CFPB found…
In recent discussions surrounding banking practices, the issue of overdraft fees, particularly for ATM and one-time debit card transactions, has gained significant attention. On September 17, 2024, the Consumer Financial Protection Bureau (Bureau) issued Consumer Financial Protection Circular 2024-05 asserting that “[a] bank or credit union can be in violation…
On September 13, 2024, the United States District Court for the Southern District of Texas granted in part and denied in part the defendants’ motion to dismiss in CFPB v. Colony Ridge, Case No. 4:23-cv-04729. The Court held that the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of…
On September 12, 2024, New York’s highest court dismissed an appeal challenging the constitutionality of the retroactive application of the Foreclosure Abuse Prevention Act (“FAPA”), a law that amended certain New York rules to strictly cabin the time limits for commencing mortgage foreclosures. The Court of Appeals, on its own motion,…