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….
On April 2, 2020, the California Department of Business Oversight (DBO) announced that it filed a lawsuit against a student loan servicer servicing over 900,000 Californians as part of the DBO’s investigation into whether the loan servicer was improperly converting federal Teacher Education Assistance for College and Higher Education (TEACH)…
As a result of COVID-19’s widespread economic disruption, the student lending industry has been impacted, from financial institutions to borrowers. In the past few weeks, the federal government has sought ways to address the student loan industry and offer protection to borrowers affected by the virus. On March 20, 2020,…
Over the past several weeks, the coronavirus (COVID-19) pandemic has sparked a litany of new orders, rules, laws, guidance, and plain asks from federal and state leaders, agencies, and courts. The President and federal and state leaders have all begun to focus on how COVID-19 is likely to impact Americans’…
On Wednesday, March 4, 2020, the United States Department of Justice (DOJ) filed a brief with the United States Supreme Court asking the Court to decline review of a case concerning the government’s power to dismiss qui tam–or “whistleblower”–actions under the False Claims Act (FCA). The case in question is…
On March 15, 2020, the California Department of Business Oversight (DBO) announced a settlement with a point-of-sale lender that offered an allegedly illegal “buy now, pay later” option targeted to young consumers. After an investigation, DBO concluded that these loans were illegal because the lender did not have the requisite…
On March 10, 2020, the Federal Trade Commission (FTC) announced that it obtained a permanent injunction and monetary judgment from the U.S. District Court for the Central District of California (the Court) against three defendants that allegedly deceptively marketed student loan debt relief services. The Court’s order was entered on February 27, 2020, and…
On March 9, 2020, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against a national bank in the U.S. District Court for the Northern District of Illinois alleging that the bank opened unauthorized accounts and enrolled customers in unauthorized products and services without consumers’ knowledge or consent. According to the CFPB’s complaint, the…
On March 9, 2020, the Massachusetts attorney general’s office (Massachusetts AG) announced that it had entered into a consent judgment with a national used car company resolving allegations that the company’s local Massachusetts franchise engaged in predatory lending and deceptive sales of defective vehicles. According to the Massachusetts AG’s complaint, filed in September 2017, the company…
On February 14, 2020, the Consumer Financial Protection Bureau (CFPB) released its Winter 2020 Supervisory Highlights (Report). It summarizes the CFPB’s findings on violations in the areas of debt collection, mortgage servicing, payday lending, and student loan servicing completed between April 2019 and August 2019. The CFPB notes that it…
On March 3, the Supreme Court heard argument in Seila Law LLC v. Consumer Financial Protection Bureau, a case involving two questions about the structure of the CFPB: (1) whether the provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act that limits removal of the CFPB Director to…
On January 17, student loan servicer Educational Credit Management Corporation (ECMC) filed a notice of appeal in the United States District Court for the Southern District of New York, challenging the decision of Chief Bankruptcy Judge Celelia Morris, which granted summary judgment for a student loan debtor and discharged his…
On February 20, the Consumer Financial Protection Bureau (CFPB), South Carolina Department of Consumer Affairs, and Arkansas Attorney General’s Office announced that they had filed a lawsuit in the U.S. District Court for the District of South Carolina against a group of defendants who brokered contracts offering high-interest credit to…
The Eleventh Circuit joined the growing majority of courts in issuing an opinion that significantly narrows the scope of the Telephone Consumer Protection Act (TCPA) and delivers a blow to the plaintiffs’ bar and proponents for an expansive reading of the statue. In addressing a pair of consolidated appeals, Glasser…
On January 24, 2020, the Consumer Financial Protection Bureau (CFPB) issued a policy statement setting forth guidelines on how it intends to enforce the “abusiveness” standard under the Dodd-Frank Act. Section 103(a) of the Dodd-Frank Act authorizes the CFPB to bring enforcement actions against “covered persons” engaged in unfair, deceptive,…