Author - K&L Gates

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Federal Courts Follow Two Approaches Post-Spokeo When Analyzing Standing
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“Survey Says”: CFPB Report Provides Further Insight Into Forthcoming Debt Collection Regulations
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Court Rejects TCPA Claims Based on Theory of Third-Party Liability
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Down But Not Out: The CFPB’s Future May Be Uncertain, But Industry Participants Must Remain Vigilant
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Massachusetts Title Clearing Act To Take Effect December 31, 2016 – Are you Ready?
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OCC Explores Special Purpose National Bank Charter for Fintech Companies
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The Post-Election FinTech World: Are Happy Days (for Bankers) Here Again?
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Securitization developments for Alternative Finance
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TRUMP’S CAMPAIGN TO GO IT ALONE ON FIRST AMENDMENT CHALLENGE TO THE TCPA
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Bankruptcy Payment Change Notice Rule Changes to Take Effect December 1, 2016

Federal Courts Follow Two Approaches Post-Spokeo When Analyzing Standing

By Andrew C. Glass, Gregory N. Blase, Ryan M. Tosi, Lindsay Sampson Bishop, and Roger L. Smerage

From the January 27, 2017 issue of the Washington Legal Foundation’s LEGAL BACKGROUNDER, Vol. 32 No. 3, with permission from the Washington Legal Foundation (WLF).

Last term, in Spokeo, Inc. v. Robins, the United States Supreme Court issued a much-anticipated opinion on Article III standing. The Court reiterated that to establish standing at the pleading stage, a plaintiff must allege an injury-in-fact that is both particularized and concrete. In other words, a plaintiff bringing suit upon an alleged statutory violation may not establish standing by merely alleging “a bare procedural violation, divorced from any concrete harm.”

Much has been written about Spokeo in the intervening months. Some members of the plaintiffs’ bar have lauded the decision as purportedly protecting consumer rights; some members of the defense bar have suggested Spokeo may signal the end of statutory class actions. Yet, to date, courts have not taken a uniform, bright-line approach in applying Spokeo to civil litigation asserting statutory causes of action, including those styled as putative class actions. Even still, courts have begun to develop two apparent schools of thought on how to analyze standing under Spokeo, resulting in increasingly divided case law across the country.

This article analyzes a few notable decisions applying each of these two approaches and considers the possibility that courts may begin to apply a third, “hybrid” approach.

To read the full article, click here.

“Survey Says”: CFPB Report Provides Further Insight Into Forthcoming Debt Collection Regulations

By Andrew C. Glass, Brian M. Forbes, Gregory N. Blase, Roger L. Smerage, and Hollee M. Watson

The Consumer Financial Protection Bureau (“CFPB”) recently released a report detailing the results of a first-of-its-kind survey on consumer experiences with debt and debt collection. The CFPB conducted the survey in connection with its ongoing effort to promulgate the first-ever federal debt collection regulations. The agency sent the survey to nearly 11,000 consumers, of whom only a little over 2,000 (just less than 20%, roughly) responded. The CFPB explained that “[t]o ensure that the survey included a sufficient number of responses from consumers who had experienced debt collection,” it targeted consumers with recent debt collection experiences at a higher rate than other consumers. Of the approximately 20% of consumers who responded to the survey, 30% were consumers with long-term debt whereas only 15% were respondents with more recent debt. The survey was comprised of 67 questions ranging from the consumers’ general financial experiences and preferences for the ways in which collectors could contact them to questions about specific debt collection attempts in the year preceding the survey (which was conducted between December 2014 and March 2015). The latter category inquired about the types of debt in collection, the manner and frequency of contacts, whether there were any erroneous attempts to collect a debt, and whether the consumer paid the debt after being contacted. Notably, the CFPB did not release the results for all 67 questions.

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Court Rejects TCPA Claims Based on Theory of Third-Party Liability

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Matthew T. Houston

The U.S. District Court for the Northern District of West Virginia recently granted summary judgment for the defendant alarm manufacturers in In re Monitronics International, Inc. Telephone Consumer Protection Act Litigation (“Monitronics”). In doing so, the Monitronics court rejected Telephone Consumer Protection Act (“TCPA”) claims based on alleged liability for acts of vendors, distributors, or other third parties. The court also expressly overruled its own earlier, contrary opinion rendered in Mey v. Monitronics International, Inc., which matter was consolidated into Monitronics as part of a multidistrict litigation (“MDL”). Thus, the court joined a growing number of jurisdictions that have questioned the ability of plaintiffs to prove vicarious liability in connection with TCPA claims.

To read the full alert, click here.

Down But Not Out: The CFPB’s Future May Be Uncertain, But Industry Participants Must Remain Vigilant

By Daniel F. C. Crowley, Soyong Cho, Jennifer Janeira Nagle, Roger L. Smerage, Jeremy M. McLaughlin, Mark A. Roszak, and Brandon R. Dillman

Since its inception, the Consumer Financial Protection Bureau (“CFPB”) has been a lightning rod, and there is little dispute that recent events threaten, at a minimum, the current operational structure of the CFPB and possibly its future existence. Specifically, the constitutionality of the CFPB has been under direct judicial attack and President-elect Trump’s incoming administration, and legislative reform that may follow, threatens to make good on Mr. Trump’s plan to “dismantle the Dodd-Frank Act,” which created the CFPB, “and replace it with new policies to encourage economic growth and job creation.” In the aftermath of these developments, there has been no shortage of predictions on the CFPB’s future and some predictions allude to a near certain doomsday for the agency. But many may have rushed to judgment. While the continued existence of the CFPB is certainly an open question, it is more likely that the CFPB will receive a makeover, not a shutdown.

To read the full alert, click here.

Massachusetts Title Clearing Act To Take Effect December 31, 2016 – Are you Ready?

On December 31, 2016, the remedial provisions of “An Act Clearing Titles to Foreclosed Properties” (the “Act”) will take effect in Massachusetts. The Act is designed to clear legal title for Massachusetts homeowners who purchased homes with a prior foreclosure, by limiting the time period that former homeowners can challenge the foreclosure sale.  The Act should be seen as welcome relief to the industry, but as detailed below, the Act still has some limitations.  Indeed, like most rules governing foreclosure-related litigation, attorneys representing individuals that are the subject of a foreclosure action will inevitably try to find ways to challenge the Act and seek to avoid its intended and desired results.

To read the full alert, click here.

OCC Explores Special Purpose National Bank Charter for Fintech Companies

By Judith E. RinearsonAnthony R.G. NolanRebecca H. Laird and Jeremy M. McLaughlin

On December 2, 2016, the Office of the Comptroller of the Currency (“OCC”) announced its plans to move forward with a proposal to consider applications from financial technology (“fintech”) companies to receive charters as special purpose national banks. The OCC simultaneously released a white paper detailing the program. The OCC is seeking comments on its proposal, including responses to 13 specific questions listed in the paper. The announcement is potentially significant for the fintech sector, but questions remain as to whether a special bank charter would represent a fundamental change or merely an incremental enhancement. The comment period ends on January 15, 2017.

To read the full alert, click here.

Securitization developments for Alternative Finance

K&L Gates partner Anthony Nolan will be speaking on “Securitization in Alternative Lending” at the Marketplace Lending & Alternative Financing Summit 2016 in Dana Point, California, on December 5th. This session will bring together participants with various perspectives, including investment bankers, platform representatives and service providers, in addition to Nolan’s viewpoint as a U.S. securitization and fintech lawyer. They will address recent commercial and regulatory developments that may affect the securitization of online and marketplace loans which include the impact of risk retention, which becomes effective on December 24, the implications of rating agency reform, emerging standards for asset-level representations and warranties, and the prospects for reform or rollback of Dodd-Frank consumer financial services regulation following President Trump’s inauguration in January.

The Marketplace Lending & Alternative Financing Summit is an educational forum for financial services professionals to delve into industry topics and trends to maximize returns and reduce risk in the growing field of marketplace lending. It brings together some of the thought leaders and market movers within the marketplace lending & alternative financing industry. Topics will include legal, tax and structural considerations, rating agency methodology, and information and tools for attendees to keep up with this dynamic industry. To see the agenda for the conference, please click here.

TRUMP’S CAMPAIGN TO GO IT ALONE ON FIRST AMENDMENT CHALLENGE TO THE TCPA

By Andrew C. Glass, Gregory N. Blase, Christopher J. Valente, and Michael R. Creta

On Monday, the U.S. Department of Justice (“DOJ”) declined to intervene in Thorne v. Donald J. Trump for President, Inc., 1:16-cv-04603 (N.D. Ill.). As previously discussed here, a class of plaintiffs sued President-Elect Trump’s campaign alleging violations of the Telephone Consumer Protection Act (“TCPA”) in connection with text messages sent during the campaign. In seeking dismissal of the suit, the campaign argued that the TCPA does not pass muster under the First Amendment. Specifically, the campaign asserted that Congress’s November 2015 exemption of calls relating to government debt constitutes “preferential treatment” and qualifies as a “blatant and egregious form of content discrimination.”

The DOJ did not provide a reason for declining to intervene, and the campaign is now faced with the prospect of going it alone in its First Amendment challenge to the TCPA.

Bankruptcy Payment Change Notice Rule Changes to Take Effect December 1, 2016

By Phoebe S. Winder and Ryan M. Tosi

On December 1, 2016, the amendments to Bankruptcy Rule 3002.1 aimed at clarifying when a secured creditor must file a payment change notice (“PCN”) in a Chapter 13 bankruptcy take effect. The new rule requires secured creditors to file PCNs on all claims secured by the Chapter 13 debtor’s primary residence for which the debtor or Chapter 13 Trustee is making post-petition payments during the bankruptcy, without regard to whether the debtor is curing a pre-petition arrearage. The new rule also clarifies that the PCN requirement ceases once the creditor obtains relief from stay, unless the court orders otherwise.

Our prior alerts and articles detailing the amendments can be viewed at:

Take Notice of This Change: Supreme Court Adopts Recommended Amendments to Bankruptcy Notice of Payment Change Rule

Advisory Rules Committee Adopts Amendments to Bankruptcy Rule 3002.1

Have You Noticed Your Payment Change? Advisory Rules Committee Proposes Amendments to Bankruptcy Rule 3002.1

 

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