Business Law Consumer Financial Services Committee

On December 17, 2015, the Consumer Financial Protection Bureau (“CFPB”) filed a complaint in federal court against a Burbank company called T3Leads.  The CFPB alleged that the company violated the Dodd-Frank Wall Street Reform and Consumer Protection Act.   According to the complaint, the Bureau alleged that the company bought and sold personal customer information from payday and installment loans without properly vetting the customers.  T3Leads is “lead aggregator.”  This type of company purchases consumer information (leads) from websites that market… Read more

In a Supervisory Bulletin released on December 16, 2015, the Consumer Financial Protection Bureau (“CFPB”) opined about practices the Bureau had noticed “in the field” during supervisory examinations and enforcement investigations.  The purpose of the Bulletin, according to the Bureau, was to provide specific guidance with regard to debt collection to the following parties: Creditors;Debt Buyers; andThird-Party Collectors The Bulletin specifically focuses the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (sections 1031 and 1036); andFair Debt Collection… Read more

On December 17, 2015, the Consumer Financial Protection Bureau (“CFPB”) ordered auto dealer CarHop (and its affiliated financing company) to pay a $6.4 Million civil penalty for allegedly providing “damaging, inaccurate, consumer information to credit reporting companies.”  Carhop was the subject of a CFPB investigation in which the CFPB alleged both parties violated the Fair Credit Reporting Act and the Consumer Financial Protection Act by specifically: Deceiving customers into believing they would be able to build and maintain good credit… Read more

On December 14, 2015, the U.S. Supreme Court once again upheld the enforceability of class waivers in arbitration agreements. In DIRECTV, Inc. v. Imburgia, the Supreme Court reversed a California Court of Appeal's refusal to enforce an arbitration agreement waiving the right to bring class arbitration claims.  The arbitration agreement at issue included a class arbitration waiver specifying that the entire arbitration agreement was unenforceable if the "law of your state" made class arbitration waivers unenforceable. The agreement also declared that… Read more

The Department of Justice announced a proposed resolution of lending discrimination claims asserted against Sage Bank.  In a complaint filed in the United States District Court for the District of Massachusetts, the Department of Justice alleged that Sage Bank employed a pricing system which resulted in African-American and Hispanic borrowers paying higher prices than similarly-situated white borrowers for residential mortgage loans.  Among other challenged elements of the pricing system, the bank allegedly allowed loan officers the discretion to price loans without… Read more

FHA Handbook: Last week, the Federal Housing Administration issued an updated handbook consolidating its guidance for lenders into a single resource. The updated resource is distinct from FHA’s effort to update its servicing manual. Comments on servicing changes are due Oct. 17. See updated handbook HMDA Data: In addition, Home Mortgage Disclosure Act data for 2013 is now available at http://www.consumerfinance.gov/hmda/. HMDA data is collected from financial institutions and includes statistics on applications, originations, denials, and loan purchases and sales, and breaks… Read more

On July 14, 2014, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit in federal district court against law firm Frederick J. Hanna and Associates and three of its partners. The action alleges that the firm, which filed more than 350,000 debt collection lawsuits in Georgia alone between the years 2009 and 2013, violated the Fair Debt Collection Practices Act (FDCPA) as well as the Dodd-Frank Wall Street Reform and Consumer Protection Act by operating “less like a law firm… Read more

The complaint was recently unsealed in a Qui tam action, where plaintiff and Texas resident Michael Fisher brought a $1 Billion dollar whistleblower action against Wells Fargo Bank N.A. under the False Claims Act. The complaint was filed in the United States District Court for the Southern District of New York. From 2008-2012, Fisher worked for law firms assisting with loan modifications relating to residential property mortgage loans made by Wells Fargo and other servicers or lenders. In 2009, the… Read more

On May 14, 2014, the Office of Mortgage Settlement Oversight released its Compliance in Progress report summarizing the six compliance reports filed with the United States District Court for the District of Columbia. These reports are required by the February 9, 2012 national mortgage settlement reached between the attorneys general of 49 states and the District of Columbia (every state except Oklahoma), the federal government and five banks and mortgage servicers – Ally/GMAC, Bank of America, Citibank, J.P. Morgan Chase… Read more

The Consumer Financial Protection Bureau issued its latest Supervisory Report this week, highlighting in particular the types of unfair and deceptive practices found by CFPB examiners to have been committed during the reporting period July – October 2013 by mortgage servicers. These practices were uncovered by examiners in connection with: servicing transfers; waivers of rights in loss mitigation agreements; payment processing; furnishing information to consumer reporting agencies; and other issues arising in servicing of defaulted loans. The CFPB adds that… Read more