On June 6, 2023, the Consumer Financial Protection Bureau (CFPB) issued a Spotlight on financial institutions’ growing use of “chatbots” as a means to provide cost-effective customer service. The use of chatbots in customer service has been gaining popularity among financial institutions in recent years. The ten largest commercial banks…
On June 8, the CFPB announced it had entered into a consent order with a third-party debt collector over allegations of illegal medical debt collecting practices and unfair credit reporting. The CFPB asserted that the company attempted to collect on unsubstantiated debt in over a thousand cases. According to the CFPB, its…
On May 30, 2023, the Federal Trade Commission (FTC) announced that it had finalized a consent order with one of the nation’s largest credit and debit card providers in an administrative action regarding alleged violations of the Electronic Funds Transfer Act (EFTA), as amended, 15 U.S.C. § 1693o-2, and its implementing regulation,…
On May 31, 2023, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an Indiana-based non-bank installment lender. The consent order alleges that the lender engaged in unfair, deceptive, and abusive acts or practices concerning the “marketing, sales, and financing of optional ancillary products” that it offered. Specifically, the…
On May 31, 2023, the United States Department of Justice (DOJ), announced that it had entered into a settlement with a Philadelphia based bank and trust company over allegations that the bank had engaged in unlawful redlining in the Philadelphia metropolitan area. In the Complaint, filed contemporaneously with the consent order in U.S. District Court for the…
On Tuesday May 23, the CFPB announced it had reached a settlement with a large bank to resolve allegations that the bank had violated consumer protection laws in connection with credit card transactions. The CFPB alleged that the bank “failed to properly manage and respond to customers’ credit card disputes and…
On January 26, 2023, the Massachusetts Division of Banks (DOB) entered into a consent order with a California-based mortgage lender. According to the DOB, the company, which was licensed as a mortgage lender in Massachusetts, had allowed a separate company to use its government issued mortgage license number, which could mislead consumers into…
On Monday May 10, 2023, the Consumer Financial Protection Bureau (CFPB or the Bureau) released a circular regarding the Bureau’s newest guidance that if a “financial institution unilaterally reopens [deposit] accounts to process debits or deposits, it can constitute an unfair practice under the [Consumer Financial Protection Act of 2012]…
On May 15, 2023, the Pennsylvania Attorney General (PA AG) announced that it reached a $11.4 million settlement with a rent-to-own lender and its affiliates. This settlement resolves a lawsuit filed by the PA AG in Pennsylvania state court in which the PA AG alleged that the lender violated state law by misrepresenting the terms of its rental-purchase agreements…
On May 4, 2023, the CFPB issued a report titled Medical Credit Cards and Financing Plans (the “Report”) that summarized the new developments in medical financing and the associated risks with these products. The Report complements the CFPB’s April 26, 2023 report that analyzed a sample of final medical collection…
On May 8, 2023 the FTC announced that it filed complaints against two loan forgiveness and debt relief companies on April 24, 2023 alleging that they falsely claimed to be affiliated with the Department of Education. The companies allegedly told students that certain fee payments would count toward repayment programs and student…
On May 5, 2023, the CFPB announced it would be sending $22.3 million in refund checks to consumers who lost money in credit card relief schemes. The CFPB sent 6,523 refund checks to damaged consumers. The relief is part of a settlement the CFPB reached with a Maryland-based debt-relief and credit-repair…
On May 1, 2023, the Consumer Financial Protection Bureau (CFPB) issued a report and a proposed rule to clarify and strengthen its regulation of so-called Property Assessed Clean Energy (PACE) financing. PACE. PACE financing is home improvement financing secured by a tax lien, rather than a mortgage. See 15 U.S.C. 1639C(b)(3)(C)(i)….
Last fall, the United States Court of Appeals for the Fifth Circuit found that the CFPB’s independent funding through the Federal Reserve was in violation of the Appropriations Clause and the underlying separation of powers principles. Community Financial Services Ass’n of America, Ltd. v. CFPB, 51 F.4th 616 (5th Circ….
On April 3, 2023, the Consumer Financial Protection Bureau (CFPB) filed a notice to appeal a district court’s decision to dismiss its complaint against Townstone Finance, Inc. (Townstone), a nonbank mortgage lender, and its owner Barry Sturner, for allegedly violating the Equal Credit Opportunity Act (ECOA). Relying on the language…
On Tuesday, April 11, 2023, a three-judge panel of the United States Court of Appeals for the Third Circuit affirmed the dismissal of a putative class action alleging that JP Morgan Chase Bank, N.A. (Chase) failed to itemize annual fees on its credit card renewal notices in violation of the…
On April 3, 2023, the Consumer Financial Protection Bureau (CFPB) issued a policy statement with guidance on what constitutes “abusive conduct” under the Consumer Financial Protection Act (CFPA). The CFPA, enacted in 2010 in response to the financial crisis, prohibits “abusive conduct” in consumer financial markets and identifies two categories…
On Thursday March 23, 2023, a three-judge panel of the Second Circuit unanimously ruled that the Consumer Financial Protection Bureau’s (CFPB) funding structure is constitutional, creating a circuit split between the Second Circuit and the Fifth Circuit on the issue. CFPB v. Law Offices of Crystal Moroney, P.C., No. 20-3471 (decided…
On March 24, 2023, the Federal Deposit Insurance Corporation (FDIC) announced that it had issued an advisory letter to a United States-based neobank, demanding that the company immediately cease and desist and take immediate corrective action to address allegedly false and misleading statements regarding the company’s insured status under the Federal Deposit…
On March 17, the U.S. Department of Housing and Urban Development (HUD) announced that it had submitted a Final Rule entitled Restoring HUD’s Discriminatory Effects Standard. The Rule reinstates HUD’s 2013 discriminatory effects rule and repeals its 2020 rule governing Fair Housing Act (FHA) disparate impact claims. Some of the…