As the Mortgage Bankers Association gathers for its Regulatory Compliance conference next week in Washington, DC, Mayer Brown’s Consumer Financial Services group will be addressing all the hot topics.

Melanie Brody will be talking about the Equal Credit Opportunity Act (ECOA) on a panel called “Fair Lending and Equal Opportunity Laws” on Sunday, September 16.

On Monday, September 17th, Phillip Schulman will discuss trends in RESPA Section 8 compliance. He will also join in the round-table discussion of RESPA later that afternoon.

Ori Lev will speak on panel entitled “UDAAP Compliance.”

Krista Cooley will be discussing the latest developments in FHA servicing compliance. She will also field questions on the topic during the afternoon servicing round-table.

On Tuesday, September 18th, Keisha Whitehall Wolfe will discuss state compliance issues.

Also in attendance from Mayer Brown will be new partner Michael McElroy, partner David Tallman, and associates Christa Bieker, Joy Tsai, and James Williams.

We look forward to seeing you there!

 

On July 26, 2018, the Federal Reserve Board (“FRB”) announced the launch of a new publication called the Consumer Compliance Supervision Bulletin. Similar to the Bureau of Consumer Financial Protection’s (“BCFP”) Supervisory Highlights, the new publication summarizes examiners’ observations from recent supervisory activities and offers guidance on what supervised institutions can do to address consumer compliance risks. The first bulletin focuses on three areas: fair lending, unfair or deceptive acts or practices (“UDAP”), and recent regulatory and policy developments. Continue Reading Key Takeaways from the Fed’s July 2018 Consumer Compliance Supervision Bulletin

Nearly seven months into Mick Mulvaney’s tenure as Acting Director of the Bureau of Consumer Financial Protection (Bureau), the agency issued just its second enforcement action under his leadership on June 13, 2018. You may have missed it, as the press release was not pushed out through the Bureau’s email notifications and the cursory press release may have flown under your radar. The settlement is with a parent company and its subsidiaries that originated, provided, purchased, serviced, and collected on high-cost, short-term secured and unsecured consumer loans. The consent order contains allegations of violations of the prohibition on unfair practices under the Consumer Financial Protection Act and of the Fair Credit Reporting Act, and requires the respondents to pay a $5 million civil money penalty. Notably, the consent order does not require any consumer redress, despite Mr. Mulvaney’s stated intent to only pursue cases with “quantifiable and unavoidable” harm to consumers.

Debt Collection Practices

The Bureau alleges that respondents engaged in unfair in-person debt collection practices, including discussing debts in public, leaving the respondents’ “field cards” (presumably identifying the respondents) with third parties (including the consumers’ children and neighbors), and visiting consumers’ places of employment. The Bureau alleges that these practices were unfair because they caused substantial injury such as humiliation, inconvenience, and reputational damage; consumers could not reasonably avoid the harm because consumers were not informed of whether and when such visits would occur and could not stop respondents from engaging in the visits; and any potential benefit in the form of recoveries were outweighed by the substantial injury to consumers. The consent order notes that respondent attempted 12 million in-person visits to more than 1.3 million consumers over a five-year period, and requires respondents to cease in-person collection visits at consumers’ homes, places of employment, and public places. Continue Reading Mulvaney’s Bureau Issues Second Enforcement Action: Debt Collectors Beware?

Last week, we wrote about how the Bureau of Consumer Financial Protection (“Bureau”) under Acting Director Mick Mulvaney had surprisingly doubled down on claims of unfair, deceptive and abusive practices (“UDAAP”) brought under former Director Richard Cordray in a case against a lead aggregator (back when the Bureau referred to itself as the Consumer Financial Protection Bureau). As if to prove the point that the Bureau is not backing off aggressive UDAAP claims, the very next day the Bureau filed a brief  in another case similarly supporting novel UDAAP claims brought under Cordray. The Bureau’s brief was filed in opposition to a motion to dismiss by defendants Think Finance, LLC and related entities. The case involves Bureau claims that Think Finance engaged in unfair, deceptive and abusive conduct when it attempted to collect on loans that were, according to the Bureau, void under state law. Continue Reading UDAAP Strikes Again: The New BCFP Seems a Lot Like the Old CFPB

Much has been written about Mick Mulvaney’s statements about how the Consumer Financial Protection Bureau (CFPB) will no longer “push the envelope” when it comes to enforcement and no longer engage in “regulation by enforcement.” But a little-noticed filing by the CFPB in the Ninth Circuit last month suggests that the CFPB is not necessarily scaling back its enforcement efforts with respect to novel claims under its authority to prevent unfair, deceptive, and abusive acts and practices (UDAAP). Continue Reading Meet the New Boss; Same as the Old Boss? The CFPB’s Take on UDAAP Might Surprise You

Several of Mayer Brown’s Consumer Financial Services lawyers will be featured at the upcoming Legal Issues and Regulatory Compliance Conference in Los Angeles, sponsored by the Mortgage Bankers Association.

On Sunday, April 29th, Ori Lev will participate on a panel analyzing unfair, deceptive, or abusive acts or practices (UDAAP), as part of the conference’s Applied Compliance track.

On Monday, April 30th, Kris Kully will participate in a panel attempting to look on the bright side of HMDA — how understanding that additional data will be useful not just for lenders’ compliance function, but also for production growth, and perhaps even operational efficiencies.

On Tuesday, May 1st, Krista Cooley will discuss the latest developments in False Claims Act enforcement.

In addition, Phil Schulman will address “TRID 2.0” — with the resolution of the PHH decision, how can lenders work with other service providers to market their loans to potential borrowers? Phil also will participate in the RESPA Section 8 “Deep Dive” Compliance Roundtable later that afternoon.

On Wednesday, May 2nd, Keisha Whitehall Wolfe will participate in what promises to be a lively discussion about “Compliance in Action,” discussing real life examples related to analyzing, addressing, responding to, and resolving compliance issues.

Other Mayer Brown lawyers in the group, including Debra Bogo-Ernst, Holly Bunting, Jon Jaffe, Rebecca LobenherzLarry Platt, and Tori Shinohara also will be on hand.  See you in Los Angeles!

The ABA Business Law Section is holding its 2018 Spring Meeting in Orlando next week and will offer nearly 90 CLE programs and many more committee meetings and events.

Mayer Brown’s Matthew Bisanz will co-moderate, and Anjali Garg will participate on, a panel on April 13th discussing current developments in UDAP/UDAAP enforcement involving financial institutions, including considerations for advertising disclosures and the potential for increased state enforcement activity. Matthew and Anjali are members of Mayer Brown’s Financial Services Regulatory and Enforcement Group in Washington, DC.

Also on April 13th, restructuring partner Luciana Celidonio (Tauil & Chequer, São Paulo) will participate on a panel exploring the issues and actors involved in international bond defaults.

For more information, please visit the event webpage.

In a decision expressly based on the novelty of the legal claims brought by the Consumer Financial Protection Bureau (CFPB), a federal district court has rejected the CFPB’s broad demand for consumer restitution and civil money penalties in a case that has already produced several important rulings. The case represents the second time that a federal district judge has rejected the CFPB’s expansive view of remedies following a bench trial. The CFPB’s loss suggests that parties willing to litigate against the CFPB may achieve success even if they lose on the merits, as courts appear reluctant to award the robust remedies the CFPB typically demands, particularly in cases where the CFPB’s claims do not sound in fraud or are based on novel legal theories. Continue Reading District Court Rejects CFPB Restitution and Penalty Demand

On October 5th, the CFPB finalized its long-awaited payday lending rule, reportedly five years in the making. The final rule is substantially similar to the proposal the Bureau issued last year. However, the Bureau decided not to finalize requirements for longer-term high-cost installment loans, choosing to focus only on short-term loans and longer-term loans with a balloon payment feature.

The final rule will be become effective in mid-summer 2019, 21 months after it is published in the Federal Register (except that provisions facilitating “registered information systems” to which creditors will report information regarding loans subject to the new ability-to-repay requirements become effective 60 days after publication).

The final rule identifies two practices as unfair and abusive: (1) making a covered short-term loan or longer-term balloon payment loan without determining that the consumer has the ability to repay; and (2) absent express consumer authorization, making attempts to withdraw payments from a consumer’s account after two consecutive payments have failed. Continue Reading CFPB’s Final Payday Lending Rule: The Long and Short of It

Dealing the Consumer Financial Protection Bureau (CFPB) another setback, on April 21, 2017, the DC Circuit Court of Appeals refused to enforce a Civil Investigative Demand (CID) issued by the CFPB. The decision is likely to have broad implications for how the CFPB identifies the nature and scope of its investigations in its CIDs, which to date have provided investigation subjects with little information about the nature of the CFPB’s concerns. More precisely defined investigations could provide significant benefits to CID recipients, as well as establish a basis to challenge the requests set forth in CIDs. To learn more about the ruling and its implications, read our Legal Update.