CFPB Releases State by State Report on Consumer Complaints

This week, the Consumer Financial Protection Bureau (CFPB) released its June 2017 complaint report. The format is different than usual. Normally, the report spotlights complaints from a particular industry and state. This month, the report provides a state by state overview of what consumers are complaining about across the country. You can see the top 5 industries receiving complaints by volume and quarterly percent change for each state. More ›

Second Circuit Says No to Unilateral Revocation of TCPA Consent to Contact, Citing Contract Principles

The Second Circuit Court of Appeals has split with the Third Circuit, the Eleventh Circuit, and the Federal Communications Commission (FCC), and utilized contract principles to hold that a consumer may not necessarily have the ability to unilaterally revoke consent to contact under the Telephone Consumer Protection Act (TCPA). The decision shifts the focus of a TCPA claim from simply deciding whether the consumer revoked consent to whether consent to contact could be revoked by contract standards. More ›

TransUnion Hit with Record $60 Million Dollar Verdict in FCRA Class Action

A California jury recently returned a large verdict in a Fair Credit Reporting Act ("FCRA") case which alleged that TransUnion's credit reporting confused the class consumer names with the names of criminals and terrorists on a government watch list. Five years after lead plaintiff Sergio L. Ramirez filed suit against TransUnion alleging violations of the FCRA, the consumer class was awarded statutory and punitive damages exceeding $60 million. The jury awarded each of the 8,185 class members $984.22 in statutory damages and $6,353.08 in punitive damages.  More ›

Treasury Echoes Trump: Deregulate to Improve Financial Systems

Shortly after taking office, President Trump issued an Executive Order to establish a policy for regulating the United States financial system under seven "Core Principles," and to order a report from the United States Treasury that assesses financial markets. Last week, Treasury responded with its first 150 page report on the current state of the financial system that outlines proposed regulatory changes. Treasury points the finger at the Obama administration’s 2010 enactment of Dodd-Frank for imposing regulatory requirements insufficiently tailored or coordinated among agencies, unrelated to addressing the problems leading to the great recession, and applied in an overly prescriptive manner. In no uncertain terms, the report concludes that the scope and excess costs imposed by Dodd-Frank have resulted in a slower rate of growth in the financial markets. Unsurprisingly, Treasury’s regulatory recommendations coincide with Congress’ current legislative effort at replacing Dodd-Frank with the Financial Choice Act. More ›

Colorado Latest State to Define Debt Buyers as Debt Collectors; Will Others Soon Follow?

On June 1, 2017, just two weeks before the U.S. Supreme Court's unanimous decision in Henson v. Santander Consumer USA, Inc., Colorado Governor John Hickenlooper signed the revised Colorado Fair Debt Collection Practices Act to specifically include debt buyers in the statute's definition of debt collectors. Colorado is now one of a small number of states that specifically include debt buyers under the law (including New York, California, and Washington). However, other states may follow suit. For instance, Oregon and Maine both have introduced bills to extend the definition of debt collector to include debt buyers. Considering that nearly two dozen state Attorneys General submitted amicus briefs to the Supreme Court in Santander in favor of including debt buyers in the definition of debt collector under the FDCPA, it is possible that more states may follow the lead of Colorado. Ultimately, the various legislatures will decide whether debt buyers should fall within the scope of the state-enacted versions of the FDCPA; but, debt buyers should note, it is likely that Colorado will not be the last state to enact such legislation. Just as Justice Gorsuch noted in his Opinion that these are matters for the legislature and not the Supreme Court to resolve, it appears that at least some states may just take Justice Gorsuch up on his offer and include debt buyers in the scope of their regulatory framework. Ironically, Justice Gorsuch’s home state of Colorado leads the way.

In Unanimous Decision, SCOTUS Shields Debt Buyers From Reach of FDCPA But Important Questions Still Remain

Just two months after hearing argument in Henson v. Santander Consumer USA, Inc., the Supreme Court declined the opportunity to expand the Fair Debt Collection Practices Act ("FDCPA") to debt buyers. In an earlier blog post, we noted the potential impact this case may have on the regulation (and marketplace as a whole) of companies that seek to collect defaulted accounts purchased from originating lenders. In his first opinion as a member of the Supreme Court, Justice Neil Gorsuch penned an 11-page decision, affirming the Fourth Circuit's finding that Santander Consumer USA, Inc. ("Santander") did not constitute a "debt collector" under the relevant portion of the FDCPA's definition. More ›

Congress Takes a Significant Step Towards Replacing Dodd-Frank and Gutting the CFPB

On Thursday, as we anticipated in a previous blog post, the House of Representatives voted along party lines to pass the Financial CHOICE ACT ("FCA"), which would repeal Dodd-Frank and strip the CFPB of its authority.

The debate leading up to the vote also appeared to divide sharply along partisan lines, with Republicans urging their colleagues to vote for the Bill, and Democrats insisting that it was the "Wrong Choice" for Americans. Despite their differing opinions, representatives from all parties appeared to articulate the same goal: putting Main Street America ahead of Wall Street.

Supporters of the FCA contend that the purported benefits of Dodd-Frank have never materialized. They argue that due to Dodd-Frank’s excessive and expensive regulatory burdens, small banks and businesses have failed, while big banks have continued to thrive. Imposing the same regulations on every financial institution, they say, has strangled small community banks, and forced many to shut down. This problem triggered another major concern of the bill's supporters, namely an alleged lack of choice of financial products and the increased cost of these same products. More ›

Rhode Island Federal Court Refuses to Dismiss FDCPA Case against Law Firm Pursuing Mortgage Foreclosure

Should a law firm pursuing foreclosure on behalf of a mortgagee be considered a debt collector? That is a question at issue in a Rhode Island federal court case, in which borrower Lloyd Amesbury filed a class action lawsuit alleging Fair Debt Collection Practices Act (FDCPA) violations against a firm retained to initiate foreclosure on his home after he received a notice of default on the firm’s letterhead. Amesbury claimed the letter was false and misleading because of a discrepancy in the amount owed described in a letter he received from the law firm in April, 2016, and a May, 2016, bankruptcy proof of claim. The law firm moved to dismiss the case on grounds that it was not a “debt collector” under the FDCPA, because the default notice was an attempt to enforce a security interest on behalf of its mortgagee client.

Although the law firm was pursuing non-judicial foreclosure of property by providing the borrower notice of default and right to cure, the Rhode Island federal court concluded that the borrower’s complaint contained facts sufficient to demonstrate that the law firm was a debt collector under the FDCPA. Here is a description of its reasoning. More ›

Congress Seeks Dodd-Frank Overhaul and Elephant Dart for Consumer Financial Protection Bureau

On May 4, 2017, the House Financial Services Committee passed HR 10, the Financial CHOICE ACT ("FCA") by a 34-26 vote, with all proposed Democratic redlines rejected. The FCA is expected to go to a full House vote as early as this week. 

The FCA purports to keep the protections Dodd-Frank aimed to enact, while at the same time freeing regulations on the American economy. It promises to "create hope and opportunity for investors, consumers, and entrepreneurs," by, among other things, ending bailouts and "holding Washington and Wall Street accountable."

FCA, as drafted, would repeal the Dodd-Frank Act in its entirety, remove CFPB supervisory authority over financial institutions, and allow the President to appoint, and remove at will, a CFPB director.  Moreover, FCA would remove any authority the CFPB has to investigate actions it deems abusive, but would keep the agency in place, changing its name from the Consumer Financial Protection Bureau to the Consumer Law Enforcement Agency (CLEA). More ›

National Pharmacy Avoids TCPA Claim for Flu Shot Robocall under Health Care Rule Exemption

A judge in the Southern District of New York recently held that an automated, pre-recorded message sent on behalf of Rite Aid informing recipients to obtain a flu vaccine shot was exempted from the Telephone Consumer Protection Act (TCPA), by virtue of the FCC’s Health Care Rule exemption. The exemption permits health care providers to contact customers in order to convey important "health care messages" as defined and covered by HIPAA.

The case, Zani v. Rite Aid Headquarters Corp., 14-cv-9701, involved an automated, pre-recorded message sent on behalf of Rite Aid informing recipients to obtain a flu vaccine shot from their local Rite Aid Pharmacy. In 2013, the putative plaintiff went to his local Rite Aid pharmacy and received a flu shot. He provided Rite Aid with his cell phone number and signed a privacy notice consenting to receiving health related communications by Rite Aid. Roughly a year after receiving his flu shot, he received a voice message reminder to get another flu shot at Rite Aid, as did all previous customers who obtained a flu shot and signed the privacy notice. More ›