On April 7, 2015, the Washington State Attorney General Office announced that it filed suit against a California-based student-loan debt-adjustment company, alleging that the company charged illegal fees in violation of Washington’s Consumer Protection Act and the state’s Debt Adjusting Act. According to the complaint, the company allegedly marketed services…
New York Supreme Court Justice John Michalski dismissed a suit brought by the New York Attorney General against HSBC Bank USA, alleging that HSBC failed to file Requests for Judicial Intervention along with their proof of service in foreclosure actions. In New York, Requests for Judicial Intervention entitle homeowners facing…
On March 26, 2015, CFPB Director Richard Cordray announced a proposed outline of changes to payday lending that would vastly alter the current rules and regulations. The new rules would address both short-term and longer-term credit products such as payday loans; deposit advance products; high-cost installment loans; certain other open-end lines…
On March 30, 2015, the Consumer Financial Protection Bureau (“CFPB”) announced that a California-based debt collection agency agreed to settle claims over alleged illegal and deceptive collection practices in violation of the Consumer Financial Protection Act (“CFPA”) and the Fair Debt Collection Practices Act (“FDCPA”). The CFPB alleged in its complaint…
On March 26, 2015, the Massachusetts Attorney General announced that on March 17, a state judge ordered a local financial and legal services company to pay more than $1.9 million for alleged misrepresentations and the unauthorized practice of law. The complaint alleged that the company misrepresented to customers the services…
On March 26, 2015, the Massachusetts Attorney General announced that it obtained a judgment of nearly $1.9 million against a Massachusetts-based financial and legal services company on the ground that the company engaged in unfair and deceptive acts and practices. According to the lawsuit, the company had tageted consumers facing…
On March 12, 2015, the Senate Intelligence Committee took an important step in advancing a comprehensive bill titled the Cybersecurity Information Sharing Act of 2015 (“CISA”) aimed at bolstering U.S. companies and the federal government’s cyber security protections. But some privacy watchdogs and other government officials are openly wondering whether…
On March 9, 2015, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray held oral arguments in the first appeal of a CFPB administrative enforcement action. Both counsel for the CFPB and Respondents PHH Mortgage Corporation and Atrium Insurance Corporation appealed to Cordray from the Administrative Law Judge’s (ALJ) Recommended Decision,…
On March 9, 2015, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray held oral arguments in the first appeal of a CFPB administrative enforcement action. Both counsel for the CFPB and Respondents PHH Mortgage Corporation and Atrium Insurance Corporation appealed to Cordray from the Administrative Law Judge’s (ALJ) Recommended Decision,…
On March 10, 2015, the Consumer Financial Protection Bureau (CFPB) released its Arbitration Study, which concludes that arbitration agreements in contracts associated with consumer financial products constrain consumers’ ability to assert their rights if a dispute arises. The study, which the CFPB was directed to carry out under Section 1028(a)…
On March 3, 2015 CFPB Director Richard Cordray appeared before the House Committee on Financial Services to deliver testimony regarding the Bureau’s work. Director Cordray spent much of his semiannual address touting the Bureau’s efforts in the mortgage space. In his written statement, Director Cordray commented on the Bureau’s Qualified…
The Equal Credit Opportunity Act (ECOA) prohibits discrimination against applicants for credit—but what about guarantors who agree to be responsible for repayment? A federal regulation treats spousal guarantors as “applicants” who can sue under EOCA, but two federal appellate courts disagreed with each other about the question. The Supreme Court agreed on…
On March 12, 2015, the Massachusetts Division of Banks entered into a consent order with a mortgage lender following a state investigation that determined that the mortgage lender was in substantial non-compliance with applicable state and federal statutes, rules, and regulations regarding its mortgage lending and determination and documentation of…
On March 12, 2015, the Justice Department announced a settlement with a regional bank over allegations that the bank violated FIRREA by permitting an intermediary third-party payment processor to process fraudulent payments through the bank. The payment processor opened an account at the bank for the purpose of processing electronic…
On February 24, 2015, Capital One Financial Corporation disclosed in its annual SEC 10-K filing that in early 2015 it had received subpoenas related to the bank’s subprime auto financing and securitization activities from the New Jersey office of the Department of Justice (DOJ) and the New York district attorney’s…
On March 10, 2015, the Justice Department announced a settlement with a regional bank over allegations that the bank permitted a third-party payment processor to process fraudulent payments through the bank. As part of the settlement, the DOJ filed a criminal information alleging a felony violation of the Bank Secrecy…
On March 9, 2015, the New York Attorney General announced a settlement with three national credit reporting agencies. The companies allegedly failed to maintain proper procedures for ensuring the accuracy of consumer credit information in violation of the Fair Credit Reporting Act. According to one study, allegedly 26% of consumers…
On March 9, 2015, the New York Department of Financial Services (“NYDFS”) announced that it entered a consent order with a “lead generation” payday lender where the lender agreed to pay a $2.1 million penalty, provide new warnings to consumers, and cease operations in the state. Payday lending is illegal in New York. “Lead…
On February 25, the Department of Justice (DOJ) announced that it had reached a settlement with MetLife Home Loans LLC concerning its investigation into MetLife’s origination and underwriting practices of loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA loans). As part of…
The Arizona Attorney General announced that it filed suit against a foreclosure consulting company, alleging that the company violated the Arizona Consumer Fraud Act. The complaint claims that the company and its owners made material misrepresentations to its consumers, failed to disclose material information, failed to provide services for which…