On January 21, 2015, the FTC announced that it had filed a complaint in the U.S. District Court for the Eastern District of Texas against Commercial Recover Systems, Inc. (CRS), a debt collector, for illegally threatening consumers with false claims and threatening consumers that they would be faced with legal…
On January 19, 2015, the New York Attorney General announced a settlement with a regional bank for possible discriminatory lending practices. The settlement was reached after the Attorney General investigated the bank for categorically excluding borrowers who lived in certain minority neighborhoods from obtaining loans, designating loans from minority areas…
Attempts by county governments to obtain real property transfer taxes from the Government Sponsored Entities (GSEs) were stifled again recently, this time by a January 16, 2015, ruling from the U.S. Court of Appeals for the Eleventh Circuit, which affirmed dismissal of six cases brought by counties against Fannie Mae,…
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 January 15, 2015, the DOJ announced that it had entered a consent order in the U.S. District Court for the Northern District of Texas to resolve claims against a state-chartered bank based in Texas for allegedly discriminatory loan practices. The matter was referred to the DOJ by the FDIC,…
**UPDATE: On January 20, 2015, the U.S. Supreme Court DENIED the Petition for Writ of Certiorari in the Iskanian matter, leaving the CA Supreme Court’s controversial decision in place.** U.S. Supreme Court precedent protecting the enforceability of arbitration agreements under the Federal Arbitration Act, 9 U.S.C. § 1 et seq….
On December 31, 2014, the U.S. Department of Housing and Urban Development entered into a settlement agreement with New York-based Golden First Mortgage Corporation and its president and owner, David Movtady, concerning allegations that Golden First and Movtady violated the False Claims Act by approving FHA mortgage loans that failed…
As we have previously opined, the decision of whether to remove a case can be critically important in state-court-filed class actions. Despite the importance of this decision, the time afforded defendants to weigh their options—thirty days—is minimal. In that short time, defendants must weigh the costs and benefits of both…
Speculation abounds regarding what the CFPB’s expected 2015 rules regarding first party debt collectors will be. Here’s the background you need to know. On November 12, 2013, the CFPB issued an Advance Notice of Proposed Rulemaking, seeking comments to its proposal to update the Fair Debt Collection Practices Act (“FDCPA”). As…
Recent indications from the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General (OIG), and quarterly SEC filings by lenders of FHA mortgages, strongly suggest that HUD’s aggressive enforcement actions against FHA lenders over the past few years are likely to continue in the New Year. Lenders…
One of the most persistent and insidious threats to companies is cyber attacks. Whether these attacks involve theft of intellectual property, installation of malware, or denial of service, they pose a significant risk to businesses and their customers. For many companies, especially financial services companies, the risk is heightened by…
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…
The CFPB recently proposed additional amendments to its Mortgage Servicing Rules which, if implemented, would provide additional protections for mortgage borrowers facing default or foreclosure. These amendments, which the CFPB announced on November 20, 2014, are the latest in a series of revisions to the Rules (which we have discussed…
On December 3, New York governor Andrew Cuomo announced the final version of the state Department of Financial Services (DFS) regulations governing debt collection actions by third-party debt collectors and debt buyers. The regulations contain a number of new requirements for third party debt collectors, including: New / Enhanced Initial…
On November 10, 2014, the Ninth Circuit reversed a district court’s order dismissing and directing to arbitration a putative nationwide class action alleging Telephone Consumer Protection Act (TCPA) violations, finding that the Customer Agreement containing the arbitration clause was unenforceable for lack of mutual assent. Knutson v. Sirius XM Radio…
According to the CFPB, Franklin Loan Corporation paid its loan officers $730,000 in quarterly bonuses over 26 months – but the bonuses were allegedly based in part on the interest rates on loans, thus violating the Loan Originator Compensation Rule in Regulation Z. As a result, the CFPB entered into a…
No readers of this blog would disagree that the Dodd-Frank Wall Street Reform and Consumer Protection Act transformed the legal landscape for banks and consumer finance companies. In the area of enforcement, two of the Act’s most significant changes were (1) the creation of the Consumer Financial Protection Bureau and…
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…
In recent months, a number of class actions have been filed across the country against large banks in an attempt to hold those banks accountable for debiting consumers’ deposit accounts for payments to certain companies offering short-term, small dollar loans – often called “payday loans” – online. In all of…
The U.S. Supreme Court recently declined to review a debt collector’s appeal of the Third Circuit’s decision this summer that debtors were not required to dispute their debt under the Fair Debt Collection Practices Act (FDCPA) before filing suit. The Third Circuit decision reversed a district court’s dismissal of a class…