21 January 2015 – Consumer Financial Services Watch

United States Supreme Court: TILA Does Not Require Consumers To File A Lawsuit Within Three Years In Order To Assert A Right To Rescind

Jan 21 2015

By: Brian M. Forbes and Gregory N. Blase

For several years, federal courts have struggled with the question of whether a consumer who wishes to rescind a loan pursuant to the federal Truth in Lending Act (“TILA”) may do so by sending a notice of rescission within three years after the closing date, or whether the statute also requires the consumer to file a lawsuit within that three-year time period. On January 13, 2015, the United States Supreme Court, in Jesinoski v. Countrywide Home Loans, Inc., No. 13-684, slip op. (U.S. Jan. 13, 2015), resolved that question and held that sending a written notice of rescission within three years after closing is sufficient to exercise the right of rescission under TILA; the statute does not require a consumer to also file a lawsuit within that timeframe.

Cybersecurity: The Obama Administration Proposes Legislation Proposals Would Standardize Breach Notification Requirements, Enhance Cybersecurity-Related Information Sharing, and Toughen Cybercrime Prosecution

Jan 21 2015

By: R. Paul Stimers, András P. Teleki, Bruce J. Heiman, Michael J. O’Neil

On January 13, 2015, in response to the continuing onslaught of cyber attacks, including the recent cybersecurity attack and data loss at Sony Pictures Entertainment, the Obama Administration sent to Congress three legislative proposals to improve cybersecurity. The proposals would:

Establish a single federal breach notification standard preempting a patchwork of state notification laws;
Encourage cyber threat information sharing within the private sector and between the private sector and the federal government; and
Enhance law enforcement’s ability to investigate and prosecute cyber crimes.

The President has been highlighting the cybersecurity proposals in a series of speeches leading up to the State of the Union Address.

To read the full alert, click here.

State Enforcement of the Consumer Financial Protection Act: State Lawsuits Offer a Sign of What’s to Come

Jan 21 2015

By: Melanie Brody and Anjali Garg

At the end of 2014, the New York Department of Financial Services (“DFS”) became the first state regulator to settle a case using its authority to enforce the federal Consumer Financial Protection Act (“CFPA”).[1] In Benjamin M. Lawsky, Superintendent of Financial Services of the State of New York v. Condor Capital Corporation and Stephen Baron,[2] the DFS claimed that indirect auto lender Condor Capital Corporation (“Condor”) and its sole shareholder, Stephen Baron, violated both New York State law and the CFPA’s prohibition on unfair, deceptive, or abusive acts or practices (“UDAAP”) by, among other matters, overcharging consumers and deceptively retaining credit balances due to them. The settlement requires Condor and Baron to admit to New York and federal violations, pay an estimated $8-9 million in restitution and pay a $3 million penalty, and surrender all of Condor’s state lending licenses.

To read the full alert, click here.

Archive:21 January 2015