Cyber threats to the financial services industry continue to increase. At the same time, regulatory requirements, litigation risk, contractual requirements and regulator expectations continue to grow. Please join us for a half-day Cybersecurity Awareness Month program that will highlight key recent cyber legal developments and tools that financial services companies can use to mitigate associated
Enforcement
RESPA Enforcement is Back! The CFPB Takes Aim at Marketing and Promotional Activities
It has been more than five years since the Consumer Financial Protection Bureau (“CFPB”) has issued a consent order based on alleged violations of Section 8 of the Real Estate Settlement Procedures Act (“RESPA”). On August 17, 2023, the CFPB announced a consent order with a non-bank mortgage lender and a consent order with a real estate brokerage company—totaling nearly $2 million in combined penalties—based on allegations that the mortgage company provided things of value and the real estate brokerage company received things of value in violation of Section 8 of RESPA. Perhaps it should come as no surprise that the activities at issue in the consent orders are promotional events and marketing services agreements, two arrangements about which the CFPB provided guidance in its Frequently Asked Questions in October 2020. …
UDAAP Round-Up
Please check out the latest edition of our UDAAP Round-Up — a periodic review of federal activities regarding the prohibition on unfair, deceptive, or abusive acts or practices (“UDAAPs”) in the consumer financial services space. In this edition, we cover notable policy, enforcement, and supervisory developments from October 2022 through March 2023
Pennsylvania Targets Rent-to-Own Company Over Practices
Pennsylvania Attorney General Michelle Henry just announced an $11 million settlement with a rent-to-own provider resolving allegations of deceptive and predatory financing practices. The May 15, 2023, settlement, which is awaiting court approval, resolves allegations that Snap Finance LLC and its affiliates (“Snap”) disguised the nature of financing products it offered, concealed outstanding balances, engaged in deceptive collection practices, and used a web portal that allowed retailers to sign consumers up for financing without their knowledge, among other claims.…
Continue Reading Pennsylvania Targets Rent-to-Own Company Over Practices
CFPB Addresses RESPA Compliance for Digital Comparison-Shopping Platforms
Can online lead generation be done compliantly under Section 8 of the Real Estate Settlement Procedures Act? The answer is yes, but it is important to navigate the impermissible activities recently identified by the Consumer Financial Protection Bureau. On February 7, 2023, the CFPB issued long-awaited guidance in an advisory opinion addressing how it interprets…
Court Dismisses CFPB Suit Against Townstone
Today, in another legal blow to the CFPB, a federal court in Illinois dismissed the Bureau’s redlining lawsuit against Townstone Financial (“Townstone”) and its owner.
The Bureau made waves back in 2020 when it filed the lawsuit, which was the first public redlining action brought by the Bureau against a non-bank mortgage lender. While the…
Chopra’s First Year – A Statistical View
Much has been written about Rohit Chopra’s tenure as Director of the Consumer Financial Protection Bureau (CFPB or Bureau). While many expected an aggressive enforcement posture, in part because of an aggressive hiring spree in enforcement, his tenure has been marked more by an aggressive use of guidance and exhortation. Recently released statistics bear this…
Iowa Targets Out-of-State Bank Partner for Usury, Shedding Light on State’s Interpretation of DIDMCA Opt-Out
State-chartered banks lending to Iowa residents will want to take note of an Assurance of Discontinuance entered into in December between the State of Iowa and an out-of-state bank to settle claims that the bank charged usurious rates of interest to Iowa consumers. The settlement also highlights the Iowa Attorney General’s interpretation of the state’s…
Vindication for the CFPB But Lack of Guidance on True Lender Issues
In a ruling with important implications for the Consumer Financial Protection Bureau (Bureau or CFPB), the Ninth Circuit has revived the CFPB’s claims for substantial civil penalties and restitution in a lawsuit that was first filed some seven years ago. In a May 23, 2022 opinion, the court reversed and remanded a district court…
Marketplace Lender’s Lawsuit Against California DFPI Challenges “True Lender” Recharacterization
Marketplace lender Opportunity Financial, LLC has gone on the offensive against the California Department of Financial Protection and Innovation to protect its bank partnership program against challenge on a “true lender” theory. On March 7, 2022, OppFi filed suit against the DFPI to ask the state court to declare that FinWise Bank, a Utah-chartered bank,…