On May 14, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a proposed stipulated judgment and final order with a California-based mortgage lender and several affiliated individuals and companies (collectively, the “lender”) resolving allegations that the lender had obtained consumer credit reports for an improper…
The sudden financial impact of the COVID-19 pandemic on consumers has led to calls for loan servicers and other interested parties to provide temporary or permanent relief for borrowers who are unable to continue making loan payments. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), guidance in the…
On May 6, 2020, the U.S. District Court for the District of Massachusetts, in ACA International v. Healey, Case No. 1:20-cv-10767-RGS, enjoined Massachusetts Attorney General Maura Healey (AG Healey) from enforcing provisions of the emergency regulation, 940 CMR 35.00, et seq. (Regulation), prohibiting debt collection calls and initiating lawsuits during…
To enhance consumer protections against illegal robocalls, on May 1, 2020, the Federal Communications Commission (FCC) issued an Order (Order) amending 47 CFR § 1.80 (Section 1.80) of its Telephone Consumer Protection Act (TCPA) rules. The Order: (i) removes the TCPA’s initial warning requirement prior to issuing penalties for illegal…
On May 11, 2020, the Consumer Financial Protection Bureau (CFPB) settled with a Colorado-based mortgage servicer that serviced a portfolio of mortgage loans worth approximately $112.69 billion. According to the CFPB, the Bureau found that the servicer violated the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq., and its implementing…
On May 1, 2020, the Consumer Financial Protection Bureau (Bureau or CFPB) held a joint virtual meeting of its four advisory committees: the Consumer Advisory Board, the Community Bank Advisory Council, the Credit Union Advisory Council, and the Academic Research Council. The meeting—the Bureau’s first public event since the onset…
A number of state officials and regulators have taken steps to decrease the economic burdens stemming from COVID-19 on consumers in their states, including by placing additional restrictions on debt collection practices. Among the more notable of these efforts took place on March 26, 2020, when Massachusetts Attorney General (AG)…
On April 29, 2020, the Minnesota Attorney General’s Office (AG) announced that it had settled its claims against a California-based student loan debt settlement company for alleged violations of Minnesota’s Debt Services Settlement Act, Prevention of Consumer Fraud Act, and Uniform Deceptive Trade Practices Act. Specifically, the AG alleged that the company…
On April 22, 2020, the California Department of Business Oversight (DBO) announced a settlement with a point-of-sale lender that offered consumers a “buy now, pay later” option for payment. The DBO alleged that these products were akin to lending, but were illegal loans because the lender did not have the…
On April 29, the Department of Justice (DOJ) announced that it settled allegations that an Illinois-based mortgage lender violated the False Claims Act (FCA), the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), and Program Fraud Civil Remedies Act (PFCRA) by falsely certifying that it complied with Federal Housing Administration (FHA) mortgage insurance…
Passed in response to the impact of COVID-19, section 4021 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748, 116th Cong. (2020)) amended the Fair Credit Reporting Act (FCRA) in a variety of ways that impact credit reporting entities. Mainly, it requires a furnisher of credit information…
Early uncertainty and the initial lapse in appropriations for the U.S. CARES Act’s Paycheck Protection Program (PPP) set off a wave of litigation by disgruntled small businesses who have been unable to secure PPP loans. PPP loans were made available through various lenders to certain COVID-19-affected businesses meeting specific maximum…
The first wave of class actions relating to the COVID-19 pandemic is here, including a number of cases concerning so-called “gating” eligibility rules that are legitimately applied by many lenders to manage the flow of applications for the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP). We expect these…
This week LenderLaw Watch covers developments related to small-dollar loans in response to the COVID-19 crisis. Every year the Board of Governors of the Federal Reserve System (Federal Reserve) conducts its Survey of Household Economics & Decision-making, asking households across the country questions related to financial wellbeing and security. According…
On April 16, the Michigan Attorney General (AG) announced that an online tribal lender agreed to an assurance of voluntary compliance, resolving allegations that the lender violated the Consumer Financial Protection Act (CFPA). Specifically, the state filed suit seeking an injunction prohibiting the lender from offering or providing usurious loans in the…
Two financial institutions have now been sued in separate putative class action lawsuits concerning their implementation of the CARES Act’s Paycheck Protection Program (PPP), which is aimed at assisting small businesses keep employees on their payroll. Plaintiffs in both lawsuits allege that the financial institutions are unlawfully restricting access to…
On March 30, 2020, the Federal Trade Commission (FTC) announced that it had reached a settlement with three student loan debt relief companies and their owner, resolving allegations that the companies made false promises to consumers and charged illegal fees in violation of the Federal Trade Commission Act (FTCA), 15…
LenderLaw Watch continues its coverage of the impact COVID-19 has had and will have on various financial services sectors, this week focusing on COVID-19’s impact on credit card issuers. Although the newly enacted CARES Act (H.R. 748, 116th Cong. (2020)), signed by President Trump into law on March 27, 2020,…
On March 31, 2020, the U.S. Department of Justice (DOJ) announced that it had entered into a $2.47 million settlement agreement with a national reverse mortgage lender in order to resolve allegations that the bank’s predecessor entity had failed to meet the Department of Housing and Urban Development’s (HUD) criteria in originating and…
On April 1, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an installment-loan lender, resolving allegations that the lender violated the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531(a), 5536(a)(1)(B), Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq….