Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau


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Don’t Ask, Don’t Discriminate: CFPB States That ECOA Prohibits Creditor Discrimination Based on Gender Identity and Sexual Orientation

The Consumer Finance Protection Bureau has stated that discrimination by creditors based on gender identity or sexual orientation violates the Equal Credit Opportunity Act. As Slate online magazine put it, when providing the first widespread coverage of this issue in an article published last week,“[t]he federal government just accomplished a decades long goal of LGBTQ advocates with a single letter.” The letter referred to was actually sent on August 30, 2016, from the CFPB to Services and Advocacy for GLBT Elders (“SAGE”), a national social service and advocacy organization for gay, lesbian, bisexual, and transgender elders.  Read More ›

New CFPB Mortgage Servicing and Loss Mitigation Rules to Take Effect in 2017 and 2018; New FDCPA Safe Harbor CFPB White Paper May Signal More to Come from CFPB on Loss Mitigation

The Consumer Financial Protection Bureau has issued yet another suite of regulatory changes related to mortgage servicing. The rules add additional protections for borrowers—and therefore increased requirements for servicers—as well as clarify certain issues that have been the subject of questions and confusion by servicers. Read More ›

CFPB Issues Latest TRID Proposal for Comment

On Friday, July 29, the Consumer Financial Protection Bureau (CFPB) issued a much-anticipated proposal to amend its TILA-RESPA Integrated Disclosure Rule (TRID), with public comments due October 18, 2016. Read More ›

CFPB Releases Outline of Proposals for Debt Collection Rules

The Consumer Financial Protection Bureau (“CFPB”) announced yesterday at a field hearing in Sacramento, California, that it is considering several potential approaches to issuing rules on debt collection. The CFPB would take this action pursuant to its authority under the Dodd-Frank Act to issue regulations implementing the Fair Debt Collection Practices Act (“FDCPA”) as well as to issue regulations prohibiting unfair, deceptive, and abusive acts and practices. This rulemaking would mark the first time regulations would be issued to implement the FDCPA, and it is likely to have significant effects on the debt collection industry. Read More ›

Ninth Circuit Holds That Each Debt Collector Must Send to the Consumer Disclosures After Its Own Initial Communication Under the Fair Debt Collection Practices Act (FDCPA)

In an important ruling for debt collectors, the Ninth Circuit Court of Appeals held in Hernandez v. Williams, Docket No. 14-15672 (2016), that the failure of a debt collector (successor or otherwise) to send its own “validation notice” under 15 U.S.C. §  1692g(a) to a consumer violates the Fair Debt Collection Practices Act (“FDCPA”), specifically 15 U.S.C. § 1692g, even when a prior debt collector sent its own validation notice to the same person. In doing so, the Court reasoned that placing the requirement on any and all debt collectors involved was in line with the consumer-protection purpose of the FDCPA. Read More ›

SEC’s Focus on Enforcing Data Security Safeguards Continues: Lessons Learned from Its $1M Fine of Morgan Stanley

The SEC’s recent settlement with Morgan Stanley highlights the agency’s continued focus on enforcing cybersecurity measures. On June 8, 2016, Morgan Stanley agreed to pay a $1 million penalty to settle charges relating to its alleged failure to adopt written policies and procedures reasonably designed to protect customer records and information, a violation of the “Safeguards Rule.”  Read More ›

The CFPB’s Small-Dollar Lending Proposal: First UDAAP Rulemaking Proposal Hits the Streets

After much anticipation, the Consumer Financial Protection Bureau (“CFPB”) has released its proposed small-dollar lending rule. Spanning 1,334 pages in length, the proposal marks the first time the CFPB has exercised its authority to issue regulations prohibiting unfair, deceptive, or abusive acts or practices (“UDAAP”). Until now, the CFPB has elected to define UDAAP through its enforcement actions. And despite the proposal’s length, it does not appear that it fully covers the waters of consumer credit in the CFPB’s sights. Accompanying the proposed rule is a Request for Information (“RFI”) asking additional questions about certain other high-cost, longer-term installment loans and open-end lines of credit, raising the possibility of additional rulemakings in the future.   Read More ›

Illinois Strengthens Data Breach Notification Statute

Illinois recently amended its data breach notification law, joining a number of states that have also amended their own breach notification statutes this year. States appear to be looking to strengthen their breach notification laws by expanding the definition of "personal information" covered by the laws, clarifying the role of encryption in providing a safe harbor, and redefining content and timing requirements for notifications provided to affected persons. Read More ›

Texas Supreme Court Opens Door to Home-Equity Lien Challenges

On May 20, 2016, the Supreme Court of Texas decided two cases that arise from the requirements of Article XVI, Section 50 of the Texas Constitution regarding provisions related to home-equity loans. The opinions have great significance for mortgage servicers, originators, and title insurers that deal with Texas home-equity loans. Claims related to origination defects, once believed barred on limitations grounds, are now fair game for the life of the loan and will undoubtedly create a new incentive for borrowers to challenge the validity of lien securing their home-equity loan.  Read More ›

Supreme Court Holds That Debt-Collecting Law Firms Delegated as Special Counsel Do Not Violate FDCPA by Using Attorney General’s Letterhead

In an important ruling for debt-collection law firms, the United States Supreme Court held in Sheriff et. al v. Fillie et. al, Docket No. 15-338 (2016), that when a debt-collection firm is hired by the Attorney General to collect debts on behalf of the State, use of the Attorney General’s letter head does not violate the Fair Debt Collection Practices Act (“FDCPA”). In doing so, the Court reasoned that the letters did not contain false information or misleading representations. Read More ›