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.
Consumer Financial Services Legal Update Blog
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.
In a Consumer Financial Protection Bureau action against a mortgage services company, its subsidiary, and its founder, a California district judged denied an award of $73.9 million in restitutionary relief, and imposed a civil money penalty for a fraction of that amount.
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.
On September 15, 2017, the parties in Snyder et al. v. Ocwen Loan Servicing LLC sought court approval for a $17,500,000 settlement fund to pay claims related to calls placed to just 1,685,757 unique cell phone numbers. At $10.38/cell phone number called, this class settlement is one of the highest per-cell number figures paid in a mass-resolution TCPA class settlement.
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?
Senators Edward J. Markey (D-Mass.) and Michael S. Lee (R-Utah) are taking yet another stab at invoking the Telephone Consumer Protection Act against federal debt collectors, even though the Federal Communications Commission has made clear that the TCPA does not apply to these entities.
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.
Last Friday, Judge Richard Story (USDC, N.D. Ga.) entered an order in Consumer Financial Protection Bureau v. Universal Debt Solutions, LLC, et al., granting a defendant’s motion for Rule 37 discovery sanctions and striking Counts 8, 9, 10, and 11 from the CFPB’s complaint. This order is another example of judicial decisions resolving a significant issue for the CFPB in recent years: how to handle Rule 30(b)(6) depositions.
It is a scenario that our clients commonly face: when calling a customer to discuss a specific delinquency on a specific account, the customer says “stop calling me.” But what if the customer has multiple accounts or even debts related to multiple product lines with the caller? Is the caller to cease all effort to contact the customer on all accounts, no matter how diverse and for any reason whatsoever? Or is the caller only required to stop calling regarding this specific delinquency and on this specific account? Or is it something in-between?
In a new article published in the Yale Journal on Regulation, Dorsey & Whitney partner Eric B. Epstein examines the growing rift between how one would expect the bank examination privilege to operate and how the privilege actually works when banks become involved in litigation with nongovernmental parties.
Texas Federal Judge Upholds CFPB’s Investigative Authority in Denying Stay Pending Appeal of CFPB CID Dispute
Burgeoning federal enforcement efforts relating to the consumer data and credit reporting industry have led to another key legal development: a federal court in Dallas ruled in favor of the CFPB by upholding the agency’s investigative authority.