Consumer Financial Services Legal Update

November 20, 2015

Update on Proposed Amendments to the Borrower Defense to Repayment Rule

The U.S. Department of Education is continuing to move forward with issuing new regulations regarding the “Borrower Defense to Repayment Rule,” which concerns the ability of a Direct Loan borrower to seek a discharge of a Direct Loan repayment obligations if the educational services provided by a college were in some way deficient. These amendments are potentially important not only to borrowers, but also to colleges and the loan servicing industry.

TCPA

November 12, 2015

“Is This The Party To Whom I Am Speaking?”: Third Circuit Okays TCPA Suit Against Bank Over Call Meant For Roommate

Does the roommate of a telephone subscriber have standing to sue for an alleged violation of the Telephone Consumer Protection Act? Surprisingly, according to the U.S. Court of Appeals for the Third Circuit, the answer is “yes.”

Spam Regulations

November 2, 2015

Canadian and U.S. Anti-Spam Laws and Regulations

This new article co-authored by Dorsey partner Melissa Krasnow discusses the Canadian and U.S. compliance regimes regarding spam emails, text messages, and other spam communications. Consumer finance entities should be familiar with these rules, given the potential implications of these rules for communications with potential and current borrowers.

FHA

October 26, 2015

New York City Defends its Community Preference Policy

On October 2, 2015, the City of New York moved to dismiss a lawsuit accusing the City of unlawfully perpetuating racial segregation in the housing industry. The arguments made by the City offer an important insight into the City Law Department’s view on the Fair Housing Act and disparate impact claims.

HMDA

October 21, 2015

The Forthcoming Amendments to Regulation C – a Litigation Perspective

Dorsey partner Eric Epstein and Dorsey associate Augustine Lo wrote this recent article for The Real Estate Finance Journal regarding the new amendments to the HMDA regulation, Regulation C.

Administrative Procedure / CRA

October 19, 2015

CFPB Deems Federally-Approved CRA Assessment Area to Be Discriminatory

If a federal agency conducts a CRA audit and finds that a lender’s conduct is compliant with federal law, is the CFPB barred from subsequently alleging that the same conduct violates federal law?

Arbitration

October 12, 2015

The Beginning of the End of Arbitration Clauses in Consumer Finance Contracts?

Are contractual arbitration clauses harmful to consumers of financial products and services? The CFPB appears to think so. But is the CFPB’s view empirically or legally well-founded?

CCD / CFPB

October 5, 2015

The New “Yelp.com” for the Consumer Finance Industry

The CFPB recently added a new feature to its Consumer Complaint Database: namely, consumers now have the option to publish “narratives” detailing their allegations against a company. The problem lies in the possibility that these hearsay “narratives” will be used against companies in connection with enforcement actions or lawsuits.

FDCPA

September 28, 2015

Damned If You Do: Second Circuit Rules That Language Included In RESPA-Required Notice Begets FDCPA Violation

The Fair Debt Collection Practices Act (“FDCPA”) provides that, if a “debt collector” makes an “initial communication with a consumer in connection with the collection of any debt,” the debt collector must provide the consumer with certain information, such as the amount of the debt, the name of the creditor, and the consumer’s right to dispute the debt. See 15 U.S.C. § 1692g(a). However, the statute does not elaborate on the meaning of the phrase “in connection with the collection of any debt.” The U.S. Court of Appeals for the Second Circuit recently flagged a Section 1692g(a) tripwire.

Truth in Lending

September 21, 2015

The Beukes Decision: A Helpful Clarification Regarding the Right of Rescission

The Eighth Circuit’s recent decision in Beukes suggests two key take-away lessons regarding a lender’s options if the lender disputes the borrower’s right to rescind.

Administrative Procedure

September 14, 2015

SEC Administrative Law Judges Ruled Unconstitutional

A recent decision from the U.S. District Court for the Southern District of New York concludes that the manner in which Administrative Law Judges (“ALJs”) of the U.S. Securities and Exchange Commission (“SEC”) are appointed is improper under the Appointments Clause of Article II of the Constitution. The decision is important to the consumer finance industry for several reasons discussed in this article.

Disparate Impact

September 10, 2015

Are Disparate Impact Claims Legally Cognizable Under ECOA?

In Texas Dep’t of Housing and Community Affairs v. The Inclusive Communities Project, 135 S. Ct. 2507 (2015), the Supreme Court held that disparate impact claims are legally cognizable under the Fair Housing Act (“FHA”). Is this reasoning applicable to the Equal Credit Opportunity Act (“ECOA”)?

Disparate Impact

August 28, 2015

Dorsey’s Webinar on the Inclusive Communities Decision

On August 27, 2015, David Scheffel, Joe Lynyak, Nicholas Vlietstra and Eric Epstein of Dorsey’s Consumer Financial Services Practice Group presented a Webinar on the U.S. Supreme Court’s Inclusive Communities decision, in which the Court held that disparate impact claims are cognizable under the Fair Housing Act. You can hear a playback of the Webinar at this link. We discuss the litigation and regulatory implications of this important decision.