On October 19, a divided Ninth Circuit ruled that a trustee of a deed of trust who takes action to initiate non-judicial foreclosure is not a “debt collector” under the Fair Debt Collection Practices Act (FDCPA). See Ho v. ReconTrust Co., NA, No., 10-56884 (9th Cir. Oct. 19, 2016).  The court reasoned that because the object of a non-judicial foreclosure is to retake and resell the property that secures a debt, as opposed to collecting money from the borrower, the trustee was not acting as a “debt collector” under the statute.  In further support of its conclusion, the court reasoned that holding otherwise would create a conflict between the trustee’s duties under state law and its obligations under the FDCPA.

In reaching this conclusion, the majority expressly rejected the position put forth by the Consumer Financial Protection Bureau (CFPB), Continue Reading Ninth Circuit Rejects CFPB Amicus Position as Unpersuasive

The Consumer Financial Protection Bureau (CFPB) has offered its new mortgage servicing rule for public inspection today, meaning it is scheduled to be published in the Federal Register on October 19, 2016.  The CFPB informally released the rule on its website in August.

The effective date of the rule is tied to its publication date, so the bulk of its requirements (with some exceptions) will take effect in 12 months, on October 19, 2017.

To learn more about the rule, read our Mayer Brown white paper.

Today, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit issued a ruling overturning a $109 million monetary penalty imposed by the Consumer Financial Protection Bureau (“CFPB” or “Bureau”).  The decision in PHH Corporation v. CFPB, written by Circuit Judge Brett Kavanaugh, addressed the unconstitutionality of the Bureau’s structure and its retroactive application of a new RESPA interpretation, and imposed RESPA’s three-year statute of limitations on the Bureau.  Continue Reading Court Rejects CFPB’s RESPA Interpretation, Declares Single-Director Structure Unconstitutional

On September 29, 2016, the U.S. Supreme Court agreed to review a decision that addressed whether state credit card surcharge restrictions are constitutional. The decision the Court will review is Expressions Hair Design v. Schneiderman, a challenge to New York’s law.  Continue Reading Supreme Court Agrees to Hear Credit Card Surcharge Case

New regulations under the federal Military Lending Act (“MLA”) that become effective next week will prohibit consumer loans to covered US Service members if those loans have a “military annual percentage rate” (“MAPR”) greater than 36 percent. The Defense Department’s regulations will impose that MAPR limit on additional types of consumer credit transactions (beyond just payday, vehicle title, and tax refund anticipation loans) to active duty members of the armed forces and their spouses/dependents. The regulations will also change how a lender may determine whether applicants are “covered borrowers” and modify the disclosures required for those borrowers.

The MLA’s enforcement provisions include criminal and civil liability for noncompliance and provide for a private right of action.

Read more about the new regulations in Mayer Brown’s Legal Update.

Kris Kully, of Mayer Brown’s Financial Services and Regulatory Enforcement group, will speak to credit union mortgage lenders at the 20th Annual Conference of the American Credit Union Mortgage Association in Washington, DC.

On September 19th, she will discuss the next wave of compliance regulations and enforcement priorities.  On September 20th, she will participate in a panel discussion of compliance matters ranging from the Department of Labor’s treatment of mortgage loan originators under the Fair Labor Standards Act, the Consumer Financial Protection Bureau’s regulation of originator compensation, and any other issues the audience requests!

If you think the shadow of the Consumer Financial Protection Bureau (“CFPB”) is hiding behind a tree, you may well be right. On July 7th, the CFPB posted a Request for Information (“RFI”) on the federal government contracts website, called FedBizOpps.gov, in which it “pre-solicited” vendor capabilities to develop an automated technology solution for nonbank financial institutions to register with the CFPB.  It noted that such a potential registration system “might also be used to collect financial and operational data as well as organizational structure data.”  In other words, in the name of supervision, the CFPB might condition your future ability to offer goods and services on your advance registration and satisfaction of ongoing reporting requirements. Continue Reading Papers Please: CFPB Advances Plans to Register Nonbank Financial Services Providers

Five Mayer Brown attorneys in the Financial Services Regulatory & Enforcement group presented at the American Bar Association Business Law Section Annual Meeting in Boston last week.

Ori Lev spoke on a panel discussing the CFPB’s enforcement track record.  The panel addressed a study by Professor Chris Peterson of the S.J. Quinney College of Law at the University of Utah that provided an empirical analysis of the CFPB’s enforcement cases and Ori’s analysis of the CFPB’s use of its new abusiveness authority.

Matthew Bisanz moderated, and Jeff Taft participated on, a Banking Law Committee panel discussion of current cybersecurity issues for large financial institutions, including the regulatory and enforcement posture of the federal banking agencies; examiner expectations; government response to cyber events at financial institutions; and the relevance of the CFPB’s consent order against Dwolla to larger banking organizations.

David Beam moderated a panel on legal issues presented by various applications of blockchain technology, particularly in connection with consumer financial products.  Panelists included representatives of American Express Company, Capital One, and the Federal Trade Commission.

Alicia Kinsey spoke on a panel discussing BSA/AML compliance challenges for community banks, which included a discussion of FinCEN’s new customer due diligence rule, NYDFS AML/sanctions rule on transaction monitoring and filtering programs, as well as observations on AML compliance issues from regulators from the FRB and NCUA.

Tomorrow, September 13, 2016, Mayer Brown partner Jeff Taft will be speaking at the inaugural Marketplace Lending Policy Summit in Washington, D.C.  Jeff will be on a panel covering “Hot Legal Topics in Marketplace Lending.”

David BeamKeisha Whitehall-Wolfe, and Eric Mitzenmacher also will be attending the conference.


Several of Mayer Brown’s Consumer Financial Services partners will be featured at this month’s Regulatory Compliance Conference in Washington, DC, sponsored by the Mortgage Bankers Association.

On Sunday, September 18th, Kris Kully will participate in the Compliance Essentials Workshop outlining how the Dodd Frank Act changed the regulatory framework for mortgages.  This panel will be useful for attendees looking for an introduction or refresher course in mortgage origination compliance, and those seeking MBA certification.

Also on Sunday the 18th, Krista Cooley will participate on the Servicing Essentials panel, which will include a discussion of the latest updates to the CFPB’s servicing rules, the TCPA, and the FDCPA.

Melanie Brody will participate on a Sunday panel addressing fair lending and HMDA.

Phil Schulman will participate on a panel on Monday, September 19th, discussing how the CFPB’s views affect marketing and advertising campaigns under RESPA. If the Circuit Court releases its opinion in the PHH case before the Conference, Phil will discuss how the court’s opinion will affect future RESPA compliance.

We look forward to seeing you there!