Author: David Scheffel

David Scheffel

David has extensive experience in consumer financial services litigation and co-chairs Dorsey’s Consumer Financial Services practice. He defends financial institutions against individual and class action claims alleging discrimination, predatory lending, violations of the Truth in Lending Act, the Real Estate Settlement Procedures Act, the Fair Housing Act, the Equal Credit Opportunity Act, and disputes between lenders and securitization trusts.

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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.

CFPB Suffers Setback in RESPA Lawsuit

A District Court in Kentucky recently rejected the Consumer Financial Protection Bureau’s claim against a law firm brought under the Real Estate Settlement Procedures Act, granting the law firm summary judgment in connection with its activities with nine real estate joint ventures surrounding the sale of title insurance policies because the Court found that the law firm’s activities fell within RESPA’s safe harbor provision.

Supreme Court Holds Debt Buyer Not Subject to FDCPA

In his first written opinion, Justice Neil Gorsuch wrote in Henson v. Santander Consumer USA, Inc. that the Fair Debt Collection Practices Act does not apply to debt buyers like Santander under one of the definitions for “debt collector.” This decision has potentially broad ramifications for financial institutions that purchase debts for collection as part of their business. At the same time, the decision leaves the door open to potential future disputes under the remaining definitions under the FDCPA.

Supreme Court Issues Midland Funding Decision

On May 15, 2017, the Supreme Court issued a 5-3 decision holding that it is not a violation of the Fair Debt Collection Practices Act to file a proof of claim in bankruptcy related to a debt for which the statute of limitations has expired, resolving a previous circuit court split regarding the issue.

A Review of the Law Governing Qualified Written Requests

On January 12, 2017, Judge Failla of the District Court for the Southern District of New York issued an opinion in a case involving QWR-related claims that provides additional guidance regarding the liability risks that mortgage servicers face in connection with QWRs.

D.C. Circuit Tosses Consumer Complaint Following Spokeo

On July 26, 2016, the D.C. Circuit rejected a consumer class action complaint based on alleged violations of two D.C. consumer protection statutes. Citing the recent U.S. Supreme Court decision in Spokeo, Inc. v. Robins, the D.C. Circuit found that the lead plaintiffs did not sufficiently allege any harm suffered from the alleged violations.

Banks Appeal Fair Housing Act Case to Supreme Court

In September 2015, the Eleventh Circuit ruled that the City of Miami had sufficient standing to sue Bank of America and Wells Fargo over lending practices that were alleged to be racially discriminatory. On June 28, 2016, the U.S. Supreme Court granted certiorari in the case. The Supreme Court’s decision on this case could have a significant impact on who is entitled to bring fair lending claims against mortgage lenders and what standards of standing such claimants must meet.

“Nonbank” Lender Seeks Injunction Restraining CFPB Administrative Action

On May 9, 2016, Integrity Advance, LLC and its CEO James Carnes filed suit against the Consumer Financial Protection Bureau (“CFPB”) in United States District Court for the District of Columbia seeking to enjoin the CFPB from continuing to prosecute an administrative enforcement action under the Consumer Financial Protection Act (“CFPA”) in which the CFPB alleged unfair, deceptive or abusive lending practices.