On December 23, the FDIC and Federal Reserve each announced settlements in closely related enforcement actions against a bank and a company that distributed financial aid refunds. The FDIC settled its claims for deceptive practices in violation of Section 5 of the Federal Trade Commission (FTC) Act with each defendant. The Federal Reserve brought its Section 5…
On December 22, 2015, the Federal Trade Commission (“FTC”) announced that it settled claims under the FTC Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act against participants in a purported credit card money laundering scheme wherein the defendants allegedly helped enable third-party telemarketing scammers to charge consumers’ credit cards. According to…
On December 16, 2015, the CFPB announced the sixth annual report to Congress on college credit card agreements, pursuant to the Credit Card Accountability, Responsibility, and Disclosure Act (“CARD Act”). In the press release, the CFPB expressed concern that while credit card agreements between financial institutions and colleges may “offer…
On December 17, 2015, the CFPB announced a consent order and settlement with a Minnesota-based auto dealer and its affiliated financing company regarding their credit reporting practices in 15 states. The consent order asserts that the companies violated the Fair Credit Reporting Act (FCRA) and the Consumer Financial Protection Act…
Facing yet another issue involving the arbitration of consumer disputes, the United States Supreme Court on December 14, 2015 held that a class action waiver clause was valid even when the contract incorporated state law standards that would have voided the waiver. The decision continued the Court’s trend toward enforcement…
On December 18, 2015, the Virginia Attorney General announced a $4 million settlement with a Delaware-based online payday lender. The Attorney General had alleged that the lender violated the state’s consumer finance statutes by imposing illegal charges on consumers who received open-ended loans, and violated the Virginia Consumer Protection Act (VCPA) by misrepresenting…
On November 25, 2015, the West Virginia Attorney General announced a $13 million settlement with a non-bank payday lender to finally resolve alleged abusive debt collections and usury rates violating the West Virginia Consumer Credit and Protection Act and other state law. According to a May 2014 West Virginia Supreme Court of…
On December 18, 2015, the Office of the Comptroller of the Currency (OCC) announced that it had entered into a consent order with a Rhode Island bank over allegations the bank engaged in unfair, deceptive, unsafe, and unsound acts and practices in violation of the Federal Trade Commission Act (Section 5). The alleged…
On December 16, 2015, the CFPB announced a consent order and settlement with a small-dollar lender concerning its debt collection practices in 15 states. According to the consent order, the lender’s unlawful conduct allegedly included: in-person collection visits at consumers’ homes and workplaces and phone calls to supervisors, landlords, and…
On December 11, the California Department of Business Oversight (DBO) announced that it had launched an inquiry into the online lending industry, known as “marketplace lending.” The DBO requested a wide array information from fourteen marketplace lenders, including a five-year trend data about their loan and investor funding programs, and…
On November 24, 2015, Republicans on the House Financial Services Committee released a report sharply criticizing the CFPB’s methodology for enforcing the Equal Credit Opportunity Act (ECOA) with regard to indirect automobile lending. The report, entitled, “Unsafe at Any Bureaucracy: CFPB Junk Science and Indirect Auto Lending,” adds to the…
On December 7, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a state debt collector over allegations that the debt collector, which collected telecommunications debt, reported inaccurate information to credit-reporting agencies and collected and reported debt that consumers disputed and that it could not…
The US Supreme Court’s October 2015 term includes three cases that may have important implications for class action litigation: Spokeo Inc. v. Robins et al., 13-1339, Campbell-Ewald Co. v. Gomez, 14-857, and Tyson Foods, Inc. v. Bouaphakeo, 14-1146. In each case, the Court will consider a procedural question whose answer…
On December 3, two telemarketers stipulated to a preliminary injunction preventing the companies from making allegedly misleading robocalls to consumers regarding reduction in credit card interest rates as part of a debt relief offering. In the underlying lawsuit, the Federal Trade Commission (FTC) and the State of Florida filed a…
On December 3, the Consumer Financial Protection Bureau (CFPB) entered a consent order with a national credit reporting company, resolving allegations that the company violated the Fair Credit Reporting Act (FCRA). The credit reporting company is in the business of compiling and reselling consumer credit reports to financial service providers, such as…
On December 2, the U.S. Department of Justice (DOJ) announced that a mortgage company settled claims that it violated the False Claims Act by originating and underwriting mortgage loans insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) by failing to comply with certain FHA requirements. The…
On December 1, the U.S. Attorney for the District of Colorado, working on behalf of the U.S. Department of Housing and Urban Development (HUD), announced a settlement agreement with a residential mortgage lender originating and underwriting loans insured by HUD’s Federal Housing Administration (FHA). The settlement resolves allegations that, between January 2007…
On December 1, the Department of Justice (DOJ) filed a complaint and proposed consent order in the District of Massachusetts, resolving alleged Fair Housing Act (FHA) and Equal Credit Opportunity Ac (ECOA) claims against a regional bank. The complaint alleged that from 2011 to at least 2014, the bank engaged in a…
On November 30, the Massachusetts Attorney General (AG) submitted an application to the U.S. Department of Education (DOE) for the immediate discharge of all federal student loans taken out by 7,200 borrowers attending a for-profit college between 2007 and 2015. The AG asserted that the college violated state law and…
On November 24, the Federal Trade Commission (“FTC”) announced that it reached a settlement agreement with two Ohio auto dealers relating to allegations that the auto dealers violated Section 184 of the Consumer Leasing Act, 15 U.S.C. § 1667c, and Section 213.7 of Regulation M, 12 C.F.R. § 213.7. Specifically, the FTC’s administrative complaint alleged that the auto dealers failed to disclose key…