On September 4, the Federal Reserve Board (Fed) released enforcement actions against a Texas-based bank, addressing regulatory violations and compliance lapses.
Continue Reading Fed Issues Cease and Desist Order for Crypto-Related Compliance and Risk Management Deficiencies
On August 29, the CFPB issued a consent order against a non-bank direct mortgage lender for misrepresenting the cost of its cash-out refinance loans, which are guaranteed under the VA home loan program, to active-duty servicemembers and veterans.
Continue Reading CFPB Penalizes VA Lender for Misrepresenting Cost of Cash-Out Refinance Loans
On August 29, the DC Attorney General’s office announced settlements with four title insurance companies over their widespread use of illegal kickbacks in violation of DC’s Consumer Protection Procedures Act (CPPA). Under the terms of the settlement, the title insurance companies are required to pay a combined total of $3,290,000.
Continue Reading DC Attorney General Settles with Title Insurance Companies Over Alleged Kickback Scheme
On August 21, a group of trade organizations filed an amicus brief in support of a motion to dismiss filed by a subprime auto lender that is the target of a joint enforcement action brought by the CFPB and the New York State Office of the Attorney General in the Southern District of New York. The underlying complaint alleges that the auto lender misrepresented costs in loan agreements and tricked customers into high-cost loans on used cars in violation of the CFPA and New York usury limits (see previous blog post here). In particular, the complaint alleges that: (1) the
Continue Reading Amicus Brief Argues CFPB Overreached in Enforcement Action Against Auto Lender
On August 21, the CFPB entered into a consent order with a nonbank mortgage servicer for mortgage servicing violations and for violating an earlier 2017 CFPB consent order for deficient foreclosure practices.
Continue Reading CFPB Hits Executive Compensation in Action Against National Mortgage Servicer for Illegal Foreclosure Practices
On August 26, the United States District Court for the Southern District of Texas issued a decision upholding the legality of the CFPB Small Business Lending Rule (the “Rule”) (designed to implement section 1071 of the Dodd-Frank Act) in a lawsuit filed by plaintiff trade associations challenging the CFPB’s authority in promulgating the Rule (previously discussed here and here).
Continue Reading Federal Court Upholds CFPB’s Small Business Lending Rule
On August 2, New Hampshire passed House Bill 1243 (the “Bill”), which substantially amends its Motor Vehicle Retail Installment Sales Act (the “Act”). The Bill is effective as of August 2.
Continue Reading New Hampshire Updates Motor Vehicle Retail Installment Act: What Lenders Need to Know
In Loper Bright Enterprises v. Raimondo, No. 22-451 (U.S. June 28, 2024), the United States Supreme Court (Roberts, J.) held that the Administrative Procedure Act (APA) requires courts to independently determine whether an agency has acted within its authority. The Supreme Court’s decision marks a departure from the highly deferential relationship developed between courts and administrative agencies over the last forty years. By overruling the precedent set by Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.[1] (“Chevron”), the Loper Bright decision has cleared the way for the judiciary to interpret ambiguous statutes with more autonomy than we
Continue Reading Farewell, Chevron: Navigating Corporate Regulation Under Loper Bright
On August 12, the National Consumer Law Center (NCLC), a prominent consumer advocacy group, petitioned the CFPB to open rulemaking under the Equal Credit Opportunity Act (ECOA) to expand the definition of “credit” to include housing and apartment rental leases, and “creditors” to include landlords. While acknowledging that landlords are already banned from discriminating against prospective tenants under the federal Fair Housing Act, the petition aims to secure two additional protections.
Continue Reading Advocacy Group Petitions CFPB to Categorize Housing Rental Leases as “Credit”
On August 13, the CFPB announced an advisory opinion on the applicability of the Truth in Lending Act (TILA) and Regulation Z to “contracts for deed.” A contract for deed is an arrangement in which a consumer purchases a home from a seller subject to the purchaser paying for the home over time. The purchaser moves into the home and assumes responsibility for taxes, insurance, home maintenance and repairs, but does not take title to the home until all payments due are made to the seller. The arrangement is also known by other names, such as “land sales contract,” “land installment contract,” and
Continue Reading CFPB Announces Advisory Opinion on Applicability of TILA and Regulation Z To Contracts for Deed
On August 2, members of U.S. House of Representatives introduced H.J. Res. 195, a joint resolution providing for congressional disapproval under the Congressional Review Act (CRA) of recent CFPB guidance (previously discussed here) on buy now pay later (BNPL) lending. The Bureau’s guidance applied TILA protections previously reserved for credit card issuers, to BNPL lenders.
Continue Reading Congressional Measure Aims to Undo Recent CFPB Buy Now Pay Later Guidance
On August 5, a prominent investment brokerage firm disclosed in a quarterly filing that it has been responding to requests from the SEC since April related to the firm’s practice of sweeping uninvested customer account balances into interest-bearing deposit programs at affiliate banks in order to generate income. This disclosure comes on the heels of the firm being named in two separate class action lawsuits earlier this year, both alleging that the firm breached customer agreements and its fiduciary duties to account holders by failing to pay reasonable interest rates on cash balances swept to affiliate bank deposit programs.
Continue Reading Scrutiny of Cash Sweep Programs Intensifies as Brokers Face Wave of Class Action Suits
On August 8, the CFPB filed a proposed order to resolve its 2021 lawsuit (previously discussed here) against a California-based software company and its CEO for their role in helping credit repair businesses charge illegal advance fees to customers in violation of the Telemarketing Sales Rule and the Consumer Financial Protection Act.
Continue Reading CFPB Settles Action against Third-Party Service Provider Supporting Credit Repair Industry
On August 5, the FTC announced a proposed settlement which included a $12 million fine in connection with a complaint it filed against operators of a credit repair operation in May of 2022. The initial complaint alleged that the company violated the Credit Repair Organizations Act, the FTC Act’s prohibition against unfair, deceptive, and abusive acts and practices, and the Telemarketing Sales Rule, by preying on consumers with low credit scores by deceptively promising credit building services they could not deliver on, and taking illegal advance fees.
Continue Reading Allegedly Deceptive Credit Repair Scheme Settles with FTC for $12 Million
On July 29, the FTC filed a stipulated order settling claims against an online career-training company on the grounds that it engaged in deceptive advertising. In addition to injunctive relief barring the company from engaging in deceptive acts, the order requires the company to pay a $15.7 million fine and cancel approximately $27.8 in consumer debt.
Continue Reading FTC Settles Action Against Online Career-Training Company for Deceptive Advertising
On July 25, federal regulators issued a joint statement to further put banking organizations on notice of the inherent risks of collaborating with fintechs in offering deposit products and services. This guidance aims to ensure the stability and integrity of the banking-as-a-service (“BaaS”) business model.
Continue Reading Federal Regulators Issue Joint Statement and Request for Information Emphasizing Caution with BaaS Model