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CFPB Issues Final Decision in In Re: PHH Corp.: First Agency Decision in Contested Administrative Proceeding

Jun 24 2015

Earlier this month, the Consumer Financial Protection Bureau (CFPB) issued the Director’s final decision in the CFPB’s enforcement action against PHH Corp. (PPH). The decision is the agency’s first ruling in a contested administrative proceeding and sheds light on how the agency—at least under the leadership of Director Richard Cordray—will approach these matters. Most strikingly, Director Cordray overturned several key rulings by the Administrative Law Judge (ALJ), resulting in a decision requiring PHH to pay over $109 million in disgorgement, nearly 17 times as much as the $6.4 million recommended by the ALJ.

FCC Empowers TCPA Plaintiffs At Peril Of Businesses

Jun 22 2015

By: Martin L. Stern, Andrew C. Glass, Gregory N. Blase, Joseph C. Wylie

At its June 18, 2015, open meeting, a sharply divided Federal Communications Commission made good on Chairman Tom Wheeler’s recent promise to bolster the Telephone Consumer Protection Act’s already strict rules and to bring about “one of the most significant FCC consumer protection actions since it established the Do-Not-Call Registry with the FTC in 2003.” While plaintiffs’ class action lawyers are likely to applaud the new measures, businesses are concerned that the new rules could unfairly restrict legitimate communications with customers.

DOJ and CFPB Settle Discriminatory Mortgage Pricing Case with Wholesale Lender

Jun 01 2015

By: Melanie Brody, Anjali Garg

On May 28, 2015, the DOJ and the CFPB filed a complaint and proposed consent order against Provident Funding Associates (Provident) alleging that the mortgage lender violated the Fair Housing Act and ECOA by charging African American and Hispanic borrowers higher broker fees than it charged white borrowers. To resolve these claims, Provident will pay $9 million to approximately 14,000 borrowers who allegedly paid higher interest rates and/or fees for mortgages between 2006–2011. The agencies did not impose a civil money penalty against Provident.

HUD Reached Record-Breaking Settlement in Redlining Case

Jun 01 2015

By: Melanie Brody, Tori Shinohara, Christa Bieker

On May 26, 2015, the Department of Housing and Urban Development (“HUD” or the “Department”) announced an approximately $200 million settlement with Associated Bank resolving allegations that the bank engaged in racial redlining in violation of the Fair Housing Act.

Supreme Court Grants Cert. to Consider Whether Offer of Complete Relief Moots TCPA Class Action

May 27 2015

By: Andrew C. Glass, Joseph C. Wylie II, Gregory N. Blase, Jennifer J. Nagle, Eric W. Lee

The United States Supreme Court recently granted certiorari in a Telephone Consumer Protection Act class action challenging text messages which a U.S. Navy vendor sent to recruit new sailors. In Campbell-Ewald Company v. Gomez, No. 14-857, the Supreme Court will review (1) whether a defendant’s offer to provide complete relief as to individual claims deprives the plaintiff of Article III standing, and (2) whether such an offer can also prevent a putative class plaintiff from proceeding where no class has yet been certified.

S.D.N.Y. Judge Denies Class Certification in Fair Housing Act Suit against Morgan Stanley

May 20 2015

By: Andrew C. Glass, Roger L. Smerage, Eric W. Lee

The United States District Court for the Southern District of New York recently denied class certification in a Fair Housing Act disparate-impact case in which plaintiffs attempted to hold Morgan Stanley liable for investing in subprime mortgage loans that another entity originated. Adkins v. Morgan Stanley, No. 12-CV-7667, 2013 WL 3835198 (S.D.N.Y. May 14, 2013).

Proposed Arbitration Fairness Act Would Ban Pre-Dispute Arbitration Clauses in Consumer Contracts

May 06 2015

By: Andrew C. Glass, Robert W. Sparkes, III, Roger L. Smerage, Eric W. Lee

Two members of Congress are seeking to expand the reach of a federal ban on pre-dispute arbitration agreements to cover nearly all consumer contracts. The proposed legislation would have a widespread effect, barring the use of pre-dispute arbitration provisions in credit card agreements, auto loan agreements, wireless telephone service contracts, and many other types of consumer-facing agreements that often contain such provisions.

CFPB Releases its 2014 Fair Lending Report

May 05 2015

By: Melanie Brody, Anjali Garg

On April 28, the CFPB issued its third Fair Lending Report, highlighting fair lending developments from calendar year 2014. The CFPB reports that in 2014, its fair lending supervisory and public enforcement actions resulted in $224 million in remediation to approximately 303,000 consumers. The CFPB referred 15 matters to the Department of Justice in the areas of mortgage lending, auto finance, unsecured consumer lending and credit cards, and student lending. DOJ declined to open an independent investigation in five of those matters.

Spokeo, Inc. v. Robins: U.S. Supreme Court to Consider Whether Plaintiffs Have Standing to Assert a Statutory Violation without Alleging any Actual Harm

May 05 2015

By: Andrew C. Glass, Brian M. Forbes, Gregory N. Blase, Robert W. Sparkes, III, Roger L. Smerage, Eric W. Lee

The United States Supreme Court has granted certiorari to decide whether a statutory violation alone, unaccompanied by any actual harm to the plaintiff, is sufficient to establish Article III standing. See Spokeo, Inc. v. Robins, No. 13-1339 (U.S. Apr. 27, 2015).

CFPB Targets Pre-Dispute Arbitration Agreements in Consumer Financial Services Contracts in New Report to Congress

Mar 16 2015

By: Andrew C. Glass, Robert W. Sparkes, Roger L. Smerage

In the wake of the Great Recession, numerous federal government actors have sought to limit, and in some cases, eliminate, the inclusion of pre-dispute arbitration agreements in consumer financial services contracts. For instance, in 2010, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), Congress amended the federal Truth-in-Lending Act to prohibit the use of pre-dispute arbitration provisions in residential mortgage contracts and home-equity line-of-credit agreements. See 15 U.S.C. § 1639c(e)(1). Now, acting pursuant to a mandate provided by the Dodd-Frank Act, see 12 U.S.C. § 5518(a), the Consumer Financial Protection Bureau (“CFPB”) has joined the hunt. On March 9, 2015, the CFPB issued a report to Congress that appears to put the use of such agreements in all consumer financial services agreements – including credit card, checking account, and payday loan agreements – in the agency’s cross-hairs.

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