On June 4, the Consumer Financial Protection Bureau (CFPB) announced that it had entered a consent order with a regional residential-mortgage lender over allegations that the lender paid bonuses and higher commissions to loan officers for steering consumers into mortgages with higher interest rates. The complaint, also filed on June 4, alleged that the company…
On April 14, 2015, the Consumer Financial Protection Bureau (“CFPB”) announced that it reached a settlement with a New Mexico-based tax-refund lender over claims that the lender steered borrowers to excessively costly products, failed to accurately disclose the APR for loans, and failed to notify the availability of refunds. The CFPB alleged in…
On April 9, 2015, the Consumer Financial Protection Bureau (“CFPB”) announced a settlement with a California-based mortgage lender over claims that the lender engaged in deceptive advertising practices. The company allegedly mailed advertisements bearing the logos of the Department of Veterans Affairs and the Federal Housing Administration, ostensibly to give…
On April 28, 2014, the Supreme Court granted certiorari to decide whether, as held by the Eight Circuit, a borrower must file a lawsuit to exercise and preserve her TILA rescission right within three years of consummating the loan, or whether simply providing written notice of rescission is sufficient to…
On February 4, 2015, the CFPB announced that it had entered a consent order with a Delaware-based subprime credit card company and servicer concerning allegations that the company made false statements and charged illegal fees for credit cards in violation of the Truth in Lending Act. The company purportedly charged…
On January 16, 2015, the FTC announced that it reached a settlement with two online payday lenders for allegedly misrepresenting the cost of loans to consumers in violation of Section V of the FTC Act. The companies were among a group of payday lenders that were sued by the FTC…
On Monday, November 17, we briefly discussed the CFPB’s newly proposed prepaid card rules. Today we elaborate on these newly proposed rules, and their effect on issuers if these new rules are implemented by the CFPB. Scope: The CFPB explained what it considers to be a prepaid card for purposes of…
On Thursday, the CFPB issued a request for public comment on its proposed rule to regulate prepaid financial products. The rule would amend Regulation E, which implements the Electronic Funds Transfer Act (EFTA), and Regulation Z, which implements the Truth In Lending Act (TILA). SCOPE The CFPB’s proposed rule would…
Borrowers who rescind their loans pursuant to the Truth in Lending Act (TILA) must return to the creditor what they borrowed. But a July 16, 2014 ruling by the Court of Appeals for the Ninth Circuit in Merritt v. Countrywide Financial Corp. makes it more difficult for lenders to win…
On May 28, the U.S. Court of Appeals for the Seventh Circuit affirmed a decision requiring two borrowers who prevailed on their TILA rescission claims to tender the principal loan balance before the lender would release its security interest and return the borrowers’ prior loan payments. Iroanyah v. Bank of…
On April 28, 2014, the U.S. Supreme Court granted certiorari in an Eighth Circuit case which held that a borrower exercises and preserves her TILA rescission right by filing a lawsuit within three years of consummating the loan, not simply by providing written notice of rescission to the creditor in…