Archive for March, 2015

Debt Collection Diversion Company Settles With CFPB for Allegedly Illegal Debt Collection Practices

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…

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MA AG Obtains $1.9 Million Judgment against Local Company for Predatory Rescue Foreclosure Practices

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…

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Massachusetts AG Obtains Judgment Against Predatory Foreclosure Rescue and Legal Services Company

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…

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Should Companies Trust New Cyber Security Bill En Route to Passage in Senate?

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…

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Director Cordray Conducts First Ever CFPB Enforcement Appeal Hearing

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,…

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CFPB Finds Arbitration Agreements Limit Consumer Redress

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)…

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CFPB Director Faces Tough Questions Before House Committee on Financial Services

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…

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Mortgage Lender Agrees to Fees and Injunctive Relief in Settlement Following State Examination on Reverse Mortgage Lending

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…

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Regional Bank Settles Claims for $1.225 Million that it Ignored Fraudulent Transactions Committed by Third-Party Payment Processors

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…

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Regional Bank Settles Criminal and Civil Claims for $4.9 Million that it Ignored Fraudulent Transactions Committed by Third-Party Payment Processors

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…

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Credit Reporting Agencies Agree to Overhaul of Credit Reporting Processes in Settlement with New York A.G.

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…

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"Lead Generation" Payday Lender Settles Claim for $2.1 Million and Agrees to Cease Operations

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…

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Arizona AG Brings Suit against Foreclosure Consulting Company for Violation of State Consumer Fraud Act

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…

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U.S. Woos Businesses With New Cyber Security Intelligence Division

As the cyber security threat to the U.S. economy and national security has grown, U.S. states and businesses have taken increasing steps to prevent potential hacks from invading user privacy and U.S. intelligence activities.  Most recently, New York’s attorney general, proposed new rules to help safeguard consumer privacy and provide businesses with incentives…

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National Bank Settles Claims with DOJ Related to Robo-Signing and Other Improper Practices in Bankruptcy Cases for $50 Million

On March 3, 2015, the Department of Justice (“DOJ”) announced a settlement with a national bank over allegations that the bank signed payment change notices in bankruptcy court without reviewing the accuracy of the documents and submitted inaccurate escrow statements. The U.S. Trustee initiated the investigation after the bank allegedly…

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