News and developments related to consumer financial services, litigation, and enforcement.
By: Melanie Brody, Ernest Simons
On June 23, the Consumer Financial Protection Bureau (CFPB or Bureau) released its latest Supervisory Highlights, outlining key findings from supervisory work completed between January and April 2015. Recent supervisory resolutions across all industries have resulted in remediation of approximately $11.6 million to more than 80,000 consumers. The report highlights recent supervisory observations in the following areas:
Earlier this month, the Consumer Financial Protection Bureau (CFPB) issued the Director’s final decision in the CFPB’s enforcement action against PHH Corp. (PPH). The decision is the agency’s first ruling in a contested administrative proceeding and sheds light on how the agency—at least under the leadership of Director Richard Cordray—will approach these matters. Most strikingly, Director Cordray overturned several key rulings by the Administrative Law Judge (ALJ), resulting in a decision requiring PHH to pay over $109 million in disgorgement, nearly 17 times as much as the $6.4 million recommended by the ALJ.
By: Martin L. Stern, Andrew C. Glass, Gregory N. Blase, Joseph C. Wylie
At its June 18, 2015, open meeting, a sharply divided Federal Communications Commission made good on Chairman Tom Wheeler’s recent promise to bolster the Telephone Consumer Protection Act’s already strict rules and to bring about “one of the most significant FCC consumer protection actions since it established the Do-Not-Call Registry with the FTC in 2003.” While plaintiffs’ class action lawyers are likely to applaud the new measures, businesses are concerned that the new rules could unfairly restrict legitimate communications with customers.
By: Melanie Brody, Anjali Garg
On May 28, 2015, the DOJ and the CFPB filed a complaint and proposed consent order against Provident Funding Associates (Provident) alleging that the mortgage lender violated the Fair Housing Act and ECOA by charging African American and Hispanic borrowers higher broker fees than it charged white borrowers. To resolve these claims, Provident will pay $9 million to approximately 14,000 borrowers who allegedly paid higher interest rates and/or fees for mortgages between 2006–2011. The agencies did not impose a civil money penalty against Provident.
By: Melanie Brody, Tori Shinohara, Christa Bieker
On May 26, 2015, the Department of Housing and Urban Development (“HUD” or the “Department”) announced an approximately $200 million settlement with Associated Bank resolving allegations that the bank engaged in racial redlining in violation of the Fair Housing Act.
By: Andrew C. Glass, Joseph C. Wylie II, Gregory N. Blase, Jennifer J. Nagle, Eric W. Lee
The United States Supreme Court recently granted certiorari in a Telephone Consumer Protection Act class action challenging text messages which a U.S. Navy vendor sent to recruit new sailors. In Campbell-Ewald Company v. Gomez, No. 14-857, the Supreme Court will review (1) whether a defendant’s offer to provide complete relief as to individual claims deprives the plaintiff of Article III standing, and (2) whether such an offer can also prevent a putative class plaintiff from proceeding where no class has yet been certified.
By: Andrew C. Glass, Roger L. Smerage, Eric W. Lee
The United States District Court for the Southern District of New York recently denied class certification in a Fair Housing Act disparate-impact case in which plaintiffs attempted to hold Morgan Stanley liable for investing in subprime mortgage loans that another entity originated. Adkins v. Morgan Stanley, No. 12-CV-7667, 2013 WL 3835198 (S.D.N.Y. May 14, 2013).
Kristie Kully will participate as a speaker in the National Business Institute Seminar: What the CFPB and FTC Need You to Know—RESPA/TILA, FDCPA, and More, May 14–15, 2014. Kristie will be speaking at the following sessions: “Loan Estimates Under the New Rules,” “Closing Disclosures—Changes You Need to Know,” and “Loan Originator Compensation: What You Need to Know—NOW.”
Please join us for the third in a series of webinars focusing on the intersection of social medial, law, and business. This program is targeted to legal counsel or marketing personnel in businesses that want to engage consumers through social media platforms. It will focus on the regulatory considerations surrounding social media, and advertising and marketing laws, with an emphasis on FTC issues.
By: Andrew C. Glass, Robert W. Sparkes, III, Roger L. Smerage, Eric W. Lee
Two members of Congress are seeking to expand the reach of a federal ban on pre-dispute arbitration agreements to cover nearly all consumer contracts. The proposed legislation would have a widespread effect, barring the use of pre-dispute arbitration provisions in credit card agreements, auto loan agreements, wireless telephone service contracts, and many other types of consumer-facing agreements that often contain such provisions.
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