The five-year anniversary of some of the major financial regulations passed by the Consumer Financial Protection Bureau (CFPB) is coming up in January 2018, meaning that they will soon undergo a review to check on their effectiveness. The Dodd-Frank Act requires the CFPB to review its rules five years after their effective date to…
On March 24, 2017, the Federal Trade Commission (FTC) announced that it entered into a consent order with a debt collection company, resolving allegations that the company engaged in unfair and abusive debt collection practices in violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p, and section 5 of…
On March 27, 2017, the North Carolina Attorney General (“AG”) announced that it had settled a lawsuit filed in the Wake County, North Carolina Superior Court against a student loan company. As a result of the settlement, the parties filed a consent judgment requiring that the company pay $377,048 in restitution…
On March 23, 2017, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a California-based credit reporting agency (CRA) and its subsidiaries, resolving allegations that the CRA deceived consumers by misrepresenting that the credit score reports that it marketed to consumers were used by lenders in determining a consumer’s credit worthiness….
On March 17, 2017, the Department of Justice (DOJ) filed an amicus brief in PHH Corp. v. CFPB, No. 15-1177 (D.C. Cir.), in which it argued that the Consumer Financial Protection Bureau’s (CFPB) single director structure is unconstitutional and that President Trump should have the power to remove the CFPB’s director…
On March 24, 2017, the Massachusetts Commissioner of Banks (“Commissioner”) entered into a consent order with a licensed motor vehicle sales finance company, agreeing to refrain from further violations of Massachusetts state law governing the conduct of motor vehicle sales financing. The consent order came after the Commissioner examined the company and subsequently issued a…
On February 27, 2017, the Federal Trade Commission (FTC) entered into a stipulated order for permanent injunction and monetary judgment with defendants United Debt Counselors, LLC, a debt relief company, and its principals, banning the defendants from making misrepresentations about financial products and services and requiring the defendants to pay a $9…
On March 22, 2017, the New York Attorney General’s Office (“New York AG”) announced that it had entered into a $540,000 settlement with a Virginia retailer and financing company that allegedly used deceptive practices to lure military servicemembers into financing agreements for the purchase of consumer goods. The New York AG alleged that the companies sold…
Last month, the Ninth Circuit affirmed dismissal of a putative class action that challenged certain fees imposed for property inspections conducted after the named plaintiffs had defaulted on their mortgages. Demonstrating the value of the increased pleading requirements set by Federal Rule of Civil Procedure 9, the Ninth Circuit’s decision in…
On March 15, 2017, the Consumer Financial Protection Bureau (CFPB) entered into a consent order with national nonbank mortgage lender that requires the lender to pay a $1.75 million civil monetary penalty to resolve alleged violations of the Home Mortgage Disclosure Act (HMDA). The CFPB alleged that the mortgage lender violated HMDA, 12 U.S.C. § 2803,…
On March 16, Maryland Attorney General Brian E. Frosh announced a settlement between his Consumer Protection Division and five California law firms that allegedly collected illegal advance fees from consumers for debt settlement services and used the payments to pay themselves thousands of dollars. Maryland’s Debt Settlement Services Act prohibits…
On February 28, 2017, the CFPB issued its monthly complaint report spotlighting credit reporting complaints (the Spotlight). Two days later, the Bureau issued a Special Edition of its Supervisory Highlights Report, which also focused on credit reporting (the Report), and Director Cordray delivered prepared remarks on the topic the same day. …
On March 9, 2017, the North Carolina Attorney General (“AG”) announced that it had settled a lawsuit filed in the Wake County, North Carolina Superior Court against three debt relief companies and two individuals. As a result of the settlement, the court entered an order banning the companies and individuals from advertising or providing debt relief…
On March 14, 2017, the Federal Trade Commission (FTC) announced that it would settle its charges against a Los Angeles-based automotive group for deceptive and unfair sales and financing practices, with the auto group agreeing to pay more than $3.6 million for return to customers. The FTC charged the auto…
On March 7, the Federal Trade Commission (FTC) announced that the United States District Court for the Eastern District of Texas entered a stipulated order prohibiting a national debt relief provider from making misleading claims about its debt relief services. The court also entered a $9 million judgment against the defendants, with all but…
On March 10, 2017, the Department of Housing and Urban Development (“HUD”) announced that it reached a settlement with an Illinois bank resolving allegations that the bank engaged in illegal “redlining” of minority neighborhoods in the Rockford, Illinois metropolitan area. HUD initiated its investigation after the Hope Fair Housing Alliance (“Hope”)…
On March 10, 2017, the Illinois Attorney General’s Office (“Illinois AG”) announced that it had brought criminal contempt charges against the former proprietor of a debt collection business (the “defendant”). The defendant is accused of operating a new debt collection business, which is an alleged violation of a consent decree concerning…
On Thursday, September 8, 2016, the Consumer Financial Protection Bureau (“CFPB”), in connection with the Office of the Comptroller of the Currency (“OCC”) and the City of Los Angeles, announced that the government was levying a combined fine of $185 million on Wells Fargo, N.A. (“Wells Fargo”) for aggressive sales…
On March 7, 2017, the United States Attorney’s Office for the Eastern District of New York announced the sentencing of an individual defendant to 15 years in prison and $2.5 million in forfeiture in connection with a loan modification scheme. The defendant may also be subject to additional restitution under the…
On February 21, 2017, the U.S. Supreme Court issued an order remanding a False Claims Act (FCA) case, Bishop v. Wells Fargo & Co., No. 15-2449 (2d Cir. 2016), to the Second Circuit for further consideration of the availability of implied certification claims. The Court’s decision to remand the case is significant…