Financial services companies - banks, non-bank lenders and loan servicers, auto finance companies, student loan companies, debt collectors, credit card issuers, non-traditional finance companies, and other market participants - face numerous legal challenges today, including government investigations and enforcement actions, a shifting regulatory landscape, novel civil litigation theories and other litigation risks. Especially as the Consumer Financial Protection Bureau and other regulators issue guidance and promulgate new rules and regulations impacting the consumer finance industry, it is now more critical than ever that corporate counsel stay abreast of these developments and related enforcement and litigation trends in order to manage institutional risks. Recognizing this need, Goodwin's LenderLaw Watch monitors, chronicles and analyzes news and legal issues impacting our clients and the consumer finance industry.

No Summer Vacation for Student Lending Companies as Enforcement Activity Continues

Student lending continues to remain in the crosshairs of federal and state consumer finance regulators during the summer months, with over five enforcement actions and investigations in recent weeks.  As covered in both LenderLaw Watch (LLW) and Consumer Finance Enforcement Watch (CFEW), this is a small part of a larger…

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Servicers Beware: RESPA Transfer of Servicing Letter May Trigger FDCPA Initial Debtor Communication Disclosure Requirement

In Hart v. FCI Lender Services, Inc., the Second Circuit made it clear that servicers should pay close attention to initial communications with borrowers upon commencing loan servicing when it determined in an August 12, 2015 ruling that FCI Lender Services, Inc.’s (FCI) initial communication with a borrower was not merely…

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The CFPB Targets Lender's Credit Card Division With More Than $200MM In Penalties

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The Consumer Financial Protection Bureau (CFPB) has set its sights on debt collection practices again.  In April, we wrote about the CFPB’s $63 million settlement with a mortgage servicer, Green Tree Mortgage, in part for Green Tree’s alleged treatment of mortgage debt.  On July 8, 2015, the CFPB once again demonstrated it was…

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Hefferon Serves As Co-Chair And Panelist At ACI's 23rd National Conference On Consumer Finance Class Actions & Litigation – July 27-28, 2015

Goodwin Procter partner and chair of the firm’s Consumer Financial Services Litigation Practice, Thomas Hefferon, will serve as the conference co-chair and speak on a panel titled “Consumer Finance Class Action Litigation and Settlement Trends and New and Emerging Procedural Considerations: Certification and Other Procedural Developments, Offers of Judgment/Full Relief,…

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CFPB: Principles for Faster Payment Systems

On July 9, 2015, the CFPB published a set of Consumer Protection Principles it believes should guide the financial industry in the development of newer, faster methods of payment.  These Principles, though merely suggestions, may help members of the financial industry anticipate the expectations of their regulators and develop new…

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FHA Attempt To Provide New Guidance: Too Little, Too Late?

On June 18, the Federal Housing Administration provided lenders with a new Defect Taxonomy for Single Family Housing Loans, or Loan Quality Assessment Methodology.  It has been working on the new taxonomy for almost a year, and the final product is very similar to what it presented for comment in September…

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Add-On Products Continue To Present Litigation Risks For Lenders

The Consumer Financial Protection Bureau’s recent action against two credit card vendors regarding credit monitoring and identity theft protection services is a reminder of the legal risks associated with certain add-on products. The July 1 settlement, in which the CFPB found that the vendors misled customers about the benefits of…

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FCC Ruling Potentially Expands Scope of TCPA

On June 18, 2015, the Federal Communications Commission (“FCC” or the “Commission”) issued a package of declaratory rulings (“FCC 15-72”) related to telemarketing.  Although FCC 15-72 has yet to be officially released, the Commission indicated the measure is significant, particularly in the Telephone Consumer Protection Act (“TCPA”) realm.  A federal law…

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8th Circuit Revives Dismissed TCPA Action

On June 8, 2015, the 8th Circuit reversed the Eastern District of Missouri and revived class claims in Golan et al. v. Veritas Entertainment, LLC et al.  In Golan, the plaintiff alleged that the defendants—producers of the movie, “Last Ounce of Courage”—robo-called consumers to promote the film in violation of…

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New York’s Highest Court Clarifies Judicial Foreclosure Standing Requirements

Editor’s Note:  This post was guest-authored by Joseph Yenouskas, a partner in Goodwin Procter’s Consumer Financial Services Litigation Group who focuses on general civil litigation in federal and state trial and appellate courts, with a particular emphasis on defending financial institutions and mortgage lenders in complex consumer class action lawsuits. The…

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Supreme Court Will Address Use Of Statistical Sampling and Whether A Class Can Be Certified If It Contains Members Who Are Not Injured

Last week, the United States Supreme Court granted cert in Bouaphakeo v. Tyson Foods, Inc., a Fair Labor Standards Act (“FLSA”) case with potentially wide reaching implications in federal class actions.  In Bouaphakeo, plaintiffs alleged that they were entitled to overtime for time spent putting on (“donning”) and taking off…

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HUD Obtains $200 Million in Community Investment to Resolve Redlining Allegations against Midwest Mortgage Lender

The U.S. Department of Housing and Urban Development (HUD) reached a settlement agreement with Associated Bank concerning allegations that the Bank violated Section 804(b) of the Fair Housing Act.  According to the conciliation agreement, HUD alleged that the Bank disproportionately denied loan applications of African-American and Hispanic applicants, and under-served…

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