Consumer Financial Services Legal Update Blog

New York District Court Applies Reyes to Squash TCPA Suit Based Upon Consent Terms Built into Sallie Mae TCPA Class Action Settlement Agreement

In Rodriguez v. Student Assistance Corp.—the first published decision directly following the Second Circuit’s ruling in Reyes v. Lincoln Automotive Financial Services—an E.D.N.Y. judge granted summary judgment in favor of Navient Solutions in a TCPA case, disregarding allegations that the Plaintiff had “repeatedly” asked for automated calls to her cell phone to stop. The Court found that the revocation efforts were absolutely meaningless because the Plaintiff was a member of the Sallie Mae settlement and, by failing to opt out or otherwise submit a written revocation form, was bound to an eternity of debt collection calls from Sallie Mae and its corporate successors by virtue of the settlement agreement’s “class consent” clause.

Happy Halloween 2017! More TCPA Statistics to Freak You Out

This year’s TCPA filings are downright ghoulish, although slightly below last year’s count YTD. If that isn’t enough to make you scream, consider that TCPA class actions are still being filed at quadruple the rate seen before the FCC’s 2015 TCPA Omnibus ruling. But the really horrifying statistic this year is the .071 batting average that defendants have mustered on motions to stay TCPA cases pending the outcome of the ACA, Int’l appeal since August of this year.

Senate Republicans Sink Controversial CFPB Anti-Arbitration Rule: Lessons Learned for the CFPB

On Tuesday, the Senate voted 51-50 (with Vice President Mike Pence casting the tiebreaking vote) to overturn the Consumer Financial Protection Bureau’s July 2017 rule banning firms from including arbitration clauses blocking class-action lawsuits in consumer financial contracts. The Senate’s action follows a 231-190 vote in the House in July 2017 to overturn the Rule. Under the Congressional Review Act, the resolution will now go to President Trump, whose expected signature will invalidate the Rule and prohibit the CFPB from revisiting it for an extended period of time.

Law Firm Attempts to Resist Subpoena by Arguing CFPB is Unconstitutional

The constitutionality of the CFPB continues to be an issue in cases involving that agency. The latest party to raise the “CFPB is unconstitutional” defense is a law firm, Seila Law, LLC, which is attempting to evade a civil investigative demand seeking information relating to the CFPB’s litigation against debt relief firm Morgan Drexel Inc. and its affiliates.

Courts Appear to Be Losing Patience with ACA Int’l Stay Requests as One-Year Anniversary Looms

This coming Thursday will mark the one-year anniversary of the oral argument in the big ACA, Int’l appeal of the FCC’s Omnibus TCPA ruling. District courts handling TCPA cases under the shadow of the ACA, Int’l appeal appear to have run out of patience with the D.C. Circuit Court of Appeal, or at least lost their faith that the ruling will be made swiftly. This is reflected by the increasingly number of denials of defendant motions to stay TCPA cases pending the outcome of the ACA Int’l appeal.

Court Issues Epic Smackdown to Professional TCPA Plaintiff Seeking to Sue PACER In Forma Pauperis

If the TCPA has a “rock bottom,” we may have just hit it. As recently explained by Judge Cynthia Bashant of the Southern District of California: “Roy Tuck and his wife Deborah Tuck, together with their son Richard Caruso and mother-in-law Clarice Tuck, appear to have developed a cottage industry suing their creditors for violations of the TCPA, the FDCPA and the FCRA. In each case, the parties request to proceed [in forma pauperis], listing liabilities that far exceed assets. Curiously, however, despite the fact that they have received settlements from approximately a dozen different defendants, their assets and cash in their bank accounts remained unchanged.”

Do Constitutional Protections Allow for the Reduction of TCPA Statutory Damage Awards? A Closer Look at Golan

Sometimes the toughest job a court faces is finding a way to do the right thing. When it comes to the crushing damages afforded by statute for violations of the TCPA, the “right” thing is often to reduce the award to something that loosely resembles the harm caused by the illegal conduct. But does the U.S. Constitution really afford an avenue to reduce damages to a prevailing plaintiff based upon due process or other concerns?

The CFPB Says Fees and Fee-Related Disclosures For Payments-By-Phone May Constitute an Unfair and Deceptive Practice and Violate Federal Debt Collection Statutes

In a Compliance Bulletin released July 27, 2017, the CFPB cautioned covered persons and service providers that fees for pay-by-phone services may run afoul of “sections 1031 and 1036 of the [Dodd-Frank Act’s] prohibition on engaging in unfair, deceptive, or abusive acts or practices . . . when assessing phone pay fees.” The CFPB also provided guidance to debt collectors who receive phone pay fees about the possible consequences under the FDCPA.