On October 29, the Consumer Financial Protection Bureau (CFPB) announced that it had filed a complaint seeking a permanent injunction and other relief against a student financial aid services provider for the provider’s alleged violation of the Consumer Financial Protection Act. The complaint alleges that the provider charged 76,000 college students and prospective…
On October 29, the Massachusetts Attorney General’s office announced that it had reached a consent order with installment loan lenders, their affiliated companies, and owners, over allegations that the lenders engaged in unfair or deceptive practices in connection with the making, purchasing, servicing, or collecting of high-interest consumer installment loans. The complaint…
On October 28, 2015, the Consumer Financial Protection Bureau (CFPB) announced that it entered an administrative consent order against an Ohio-based auto lender that specializes in loans to military servicemembers. The CFPB consent order, and the companion stipulated order issued by the U.S. District Court for the Southern District of Ohio, resolve…
In August, the CFPB issued a compliance bulletin to clarify lenders’ obligations to terminate Private Mortgage Insurance (PMI) charges under 12 U.S.C. § 4902. One subject that the bulletin did not address—but which is somewhat ambiguous—is how to calculate when PMI must be terminated after a loan is modified. Unless a borrower…
On October 28, the Consumer Financial Protection Bureau (CFPB) announced that the U.S. District Court for the Northern District of Illinois entered a default judgment and order against affiliated for-profit colleges, resolving a complaint filed by the CFPB on September 16, 2014. The complaint alleged that the colleges provided “consumer financial…
Earlier this month, the CFPB announced that it may propose rules designed to curtail or eliminate class-action waivers from arbitration clauses. Arbitration clauses appear in most financial-services contracts to provide both parties with a cheaper alternative to litigation. Dubbing such clauses “a free pass [to] sidestep the legal system, avoid…
On October 20, the Federal Trade Commission (FTC) announced that it approved final consent orders against two Law Vegas auto dealers for misrepresenting the cost of cars in advertising, which the dealers had agreed to settle back in June (available here and here). The complaints (available here and here) alleged that the…
On October 15, 2015, the New Jersey Attorney General announced that the New Jersey of Division of Consumer Affairs reached settlements with three companies and one individual to resolve allegations that the businesses falsely represented they were needed to help consumers obtain “surplus funds” remaining after a property foreclosure sale. “Surplus funds” are funds…
**EDITOR’S NOTE: This post was guest-authored by Goodwin Procter partner Joe Yenouskas and associate Alyssa Sussman. Both are members of Goodwin Procter’s Consumer Financial Services Litigation Group.** A series of putative class actions have been filed recently in New York federal courts by borrowers alleging that their mortgage satisfactions were not timely…
On October 8, an article published in the Wall Street Journal disclosed that the Consumer Financial Protection Bureau (CFPB) is investigating the student loan servicing practices of a national bank. Sources indicated that the bank, which is the second largest private student-loan originator by volume, has been under investigation since at least late last…
The CFPB issued a new report on September 29, 2015, making clear that it is targeting student loan servicing for a set of industry-wide reforms. Servicers should be on notice that the CFPB is reviewing new standards for them to follow. The CFPB report is the result of a public inquiry…
On October 6, the U.S. Attorney for the Southern District of New York announced an $85 million settlement to resolve claims for civil fraud under the False Claims Act that a bank certified roughly 1,400 mortgage loans as eligible for FHA insurance, when the bank knew that the loans were in fact ineligible and failed…
On October 5, 2015, the Federal Trade Commission (FTC) announced that it reached a settlement with defendants who allegedly operated a debt scamming business by promising consumers debt relief services that they did not deliver. Defendants allegedly disseminated false and misleading information regarding their services through telemarketing, internet ads, and other media. After…
Whole Foods Market Group, Inc. (Whole Foods) recently settled a putative class action relating to Fair Credit Reporting Act (FCRA) disclosures that were allegedly deficient. In Speer v. Whole Foods Market Group, Inc., the plaintiff—a Whole Foods employee—filed suit in the United States District Court for the Middle District of…
On October 1, 2015, the CFPB announced an enforcement action and consent order with an indirect auto lender for illegal debt collection and other practices. It is alleged that the company’s actions violated the Fair Debt Collection Practices Act, the Truth in Lending Act, and the Dodd-Frank Act. The illegal…
On September 29, 2015, the CFPB released a report outlining perceived failures in servicing of both private and federal student loans. Some of the issues identified in the report include: servicers not disclosing alternative repayment programs; servicing transfers resulting in processing problems, such as surprise fees and lost repayment benefits; customer service…
Arguably the most pressing topic at this year’s Mortgage Bankers Association’s (MBA) Regulatory Compliance Conference (held on September 20-22, 2015 in Washington, D.C.) was the implementation of the TILA-RESPA Integrated Disclosure (TRID) Rule, which will take effect on October 3, 2015. While industry leaders at the conference generally seemed to accept…