Consumer Financial Services Law Blog
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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Showing 8 posts in State Consumer Protection Laws.

“Objectively Reasonable” Interpretation of FACTA Averts Liability

In Hammer v. Sam's E., --- F. 3d ---, 2014 U.S. App. LEXIS 10452 (8th Cir. June 5, 2014), the Eight Circuit Court of Appeals affirmed the District Court's grant of summary to Sam's Club on this class action Fair and Accurate Credit Transaction Act, 15 U.S.C. 1681 et seq (FACTA). The District Court found that although Sam's Club violated FACTA by printing more than the last five digits of consumers' credit card numbers on receipts, the violation was not willful, which is a statutory pre-condition to liability, because Sam's Club's interpretation of FACTA was objectively reasonable.  15 U.S.C. § 1681c(g)(1)Read More ›

The CFPB Strikes Again: Discover To Pay $210 Million Over Phone Marketing

As the CFPB-Lawblog predicted last month, the CFPB’s $210 million settlement agreement with Capital One was a harbinger of more enforcement actions against credit card companies. Late last week, the CFPB announced another $210 million settlement with Discover to resolve charges that its call-center representatives misled consumers into paying for certain “add-on products”—payment protection, credit score tracking, and identity theft protection.  The CFPB claims that the marketing scripts Discover created for its internal and third-party telemarketers “contained material misrepresentations and omissions” that “were likely to mislead reasonable consumers.” The CFPB further alleges that “Discover’s telemarketers also often downplayed key terms and spoke quickly during the part of the call in which the prices and terms of the add-on products were disclosed.”  Capital One’s settlement with the CFPB also involved the marketing of credit card “add-on products.”   Read More ›

Nation’s Governors Resist CFPB’s Call, Prepare Lawsuit Challenging CFPB’s Authority

Last March, CFPB Director, Richard Cordray, called on all 50 states to sign a memorandum of understanding (MOU) to assuage industry concerns regarding the protection of confidential information shared among states and the bureau. To date, only 12 states have answered the call. Oklahoma Attorney General Scott Pruitt explains that some attorney generals are declining to sign the MOU over legal objections to Dodd-Frank and the recess appointment of Cordray. “There are misgivings I have about the authority and scope and power of the CFPB and the power granted to the director. Frankly, until some of those issues are fleshed out, it is very premature for a state to enter into an MoU.”  Indeed, it has been reported that some states, including Oklahoma, South Carolina, Kansas and Michigan, are preparing a lawsuit to challenge the constitutionality of Dodd-Frank and the powers it grants to the bureau and its director. South Carolina Attorney General Alan Wilson warned that the lawsuit would be filled later this month.   Read More ›

Court Grants Preliminary Injunction That Prevents CFPB From Enforcing TILA Rules on Credit Card Fees

A federal district court in First Premier Bank v. U.S. Consumer Financial Protection Bureau (D.S.D.) granted a preliminary injunction to First Premier Bank (“Premier”) to block the CFPB’s enforcement of an amendment to Regulation Z, which would narrow the scope of fees credit card companies can impose on the type of cards typically offered to subprime borrowers. The injunction, based in part on the finding that the Federal Reserve Board (“FRB”) had exceeded its authority, prevents the CFPB from enforcing the amendment until a final decision is made in the case. Read More ›

Senate Committee Approves Cordray to Head Consumer Financial Protection Bureau

The Senate Banking Committee voted 12-10 to approve Richard Cordray’s nomination to be the first director of the CFPB. Cordray is a former Ohio attorney general who currently leads the Bureau’s enforcement division. The committee voted along party lines, with no Republican committee member voting to approve the nomination. Cordray’s nomination now proceeds to the full Senate for a vote. Read More ›

Date Calls for Greater Transparency in Checking Account Fees

On the heels of Bank of America’s announcement that it will impose a monthly fee on debit card users, the Consumer Financial Protection Bureau (“CFPB”) has signaled that it will work toward increasing transparency regarding checking account fees and might require more simplified checking account disclosures. Raj Date, special advisor to the Secretary of the Treasury on the CFPB, recently issued a statement noting that “checking accounts often come with a wide variety of unexpected costs that can quickly add up for consumers.” Read More ›

CFPB Drafting Qualified Mortgage Regulations in Hopes of Expanding Mortgage Loan Originations

The CFPB is currently drafting regulations that define the requirements of a Qualified Mortgage (“QM”) and the benefits to lenders whose loans fall within the QM parameters. Recognizing that “[t]here can be little or no access to credit unless suppliers of capital are willing to finance home mortgages,” Patricia McCoy, the CFPB’s assistant director for mortgage markets, is appreciative of the hundreds of extremely thoughtful comment letters received that will inform this “critical and difficult rulemaking.” Read More ›

CFPB Releases Mortgage Servicing Examination Procedures and Manual

The Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) announced its initial approach to supervising mortgage servicers. Specifically, the Bureau released its Mortgage Servicing Examination Procedures (the “Procedures”), along with its CFPB Supervision and Examination Manual (the “Manual”). The devotion of CFPB resources to servicer regulation was foreshadowed by a speech from Raj Date, special advisor to the Secretary of the Treasury, on September 20, 2011. The CFPB, of course, was the brainchild of Professor Elizabeth Warren, who argued in a November 2008 law review article for the creation of a “single, highly motivated federal regulator” to police mortgage servicing activity. The Manual and the Procedures constitute the CFPB’s first broad attempt to implement that vision. Read More ›