Category: Bureau of Consumer Financial Protection (CFPB)

1
California Continues Its Role as a Privacy Vanguard: California Consumer Privacy Act Of 2018
2
CFPB Left with Rulemaking to Modify or Delay Payday Rule
3
Another Shot at the Target: CFPB Payday Loan Rule Faces New Challenge from Trade Groups
4
SAVED BY THE EN BANC: CFPB Appears Here To Stay
5
Back from the Dead: The D.C. Circuit Breaths Life Into RESPA Section 8 Safe Harbor
6
Payday Loan Rule To Be Officially Reconsidered
7
Payday Loan Rule Is Officially A Go—Or Is It?
8
Supreme Court Again Declines to Review Ruling That Courts Determine Availability of Classwide Arbitration
9
President Signs Congressional Resolution Overturning CFPB Arbitration Rule
10
“True Lender” Litigation Heats Up: Small Business Sues Marketplace Lender and Partner Bank, Alleging Conspiracy to Evade Usury Laws

California Continues Its Role as a Privacy Vanguard: California Consumer Privacy Act Of 2018

By Julia B. Jacobson, Jeffrey S. King, Alidad Vakili                   

On June 28, 2018, California Governor Jerry Brown signed into law the California Consumer Privacy Act of 2018 (“CCPA”).[2] CCPA grants new privacy rights to Californian residents and applies a notice and consent framework to most businesses operating in California that collect personal information from those residents.

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CFPB Left with Rulemaking to Modify or Delay Payday Rule

By: Jennifer Janeira Nagle, Robert W. Sparkes, Scott B. Hefferman

On Tuesday, June 12, 2018, a Texas federal judge denied a joint request from the Consumer Financial Protection Bureau (“CFPB”) and two payday-lending trade groups to stay the August 2019 deadline for industry compliance with the Payday Loan Rule (the “Rule”). The decision was issued in Community Financial Services Association of America, Ltd., v. Consumer Financial Protection Bureau, No. 1:18-cv-295-LY, an action that was filed in April 2018 by the trade groups against the CFPB, seeking to invalidate the Rule as arbitrary and capricious in violation of the Administrative Procedures Act (“APA”), among other things.  (For more about the litigation, click here.)  In late May 2018, the plaintiff trade groups and the defendant CFPB jointly asked the Court to stay the Rule’s compliance deadline, but the Court’s decision Tuesday quickly and summarily rejected that request.  The Court stayed only the litigation, leaving August 2019 as the operative date for industry participants to comply with the Rule.

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Another Shot at the Target: CFPB Payday Loan Rule Faces New Challenge from Trade Groups

By Jennifer Janeira Nagle, Robert W. Sparkes, III, Hayley Trahan-Liptak

The Consumer Financial Protection Bureau’s Payday Loan Rule (the “Rule”), with a looming compliance deadline in August 2019, is facing yet another attack—this time from trade groups seeking relief directly from the courts. On April 9, 2018, two payday lending industry trade associations — the Community Financial Services Association of America, Ltd. and the Consumer Services Alliance of Texas — filed suit in the U.S. District Court for the Western District of Texas against the Consumer Financial Protection Bureau (“CFPB”) and its Acting Director, Mick Mulvaney, seeking an order enjoining and setting aside the Rule.

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SAVED BY THE EN BANC: CFPB Appears Here To Stay

By Andrew C. Glass, Daniel F. C. Crowley, Jennifer Janeira Nagle, Brandon R. Dillman   

The Consumer Financial Protection Bureau (“CFPB” or “Bureau”) has been an agency under fire. Acting Director Mick Mulvaney has begun to institute significant changes at the Bureau. And last year, a panel of the D.C. Circuit Court of Appeals held that the Bureau’s leadership structure – a single director who can be removed only for cause – violates the separation of powers requirement of Article II of the U.S. Constitution. But in a long awaited en banc decision, the D.C. Circuit reversed that panel’s decision. Rather, in PHH Corp. v. Consumer Financial Protection Bureau, the court held that the Bureau’s structure is consistent with separation of powers principles. As discussed below, businesses subject to the CFPB’s supervisory and enforcement authority will need to continue to remain vigilant.

To read the full alert, click here.       

Back from the Dead: The D.C. Circuit Breaths Life Into RESPA Section 8 Safe Harbor

By Brian M. ForbesDavid D. Christensen and Matthew N. Lowe

Through its recent en banc decision in PHH Corp. v. Consumer Financial Protection Bureau, the D.C. Circuit reinstated the holding of the three-judge panel regarding the safe harbor provision in Section 8(c) of the Real Estate Settlement Procedures Act (RESPA). Specifically, the court reaffirmed that under Section 8(c), payments made by one settlement service provider to another do not violate Section 8(a), even if made in connection with a captive relationship or a referral, when the payments are reasonably related to the market value of the goods, services, or facilities provided. Although potentially overshadowed by the portion of the en banc court’s holding that the leadership structure of the Consumer Financial Protection Bureau (CFPB) is constitutional, the panel court’s reinstated holding regarding RESPA’s Section 8(c) safe harbor is notable and important for the simple confirmation that the safe harbor “is what it is.”

To read the full alert, click here.

Payday Loan Rule Is Officially A Go—Or Is It?

By Jennifer Janeira Nagle and  Robert W. Sparkes III

Today, January 16, 2018, officially marks the effective date of the Consumer Financial Protection Bureau’s final rule targeting what it refers to as “payday debt traps” (the “Rule”).  As outlined in our previous publications (found here and here), the Rule marks a significant change in the landscape for lenders offering short-term loans or longer-term loans with balloon payments, including payday and vehicle title loans.  Looming large is the new requirement that lenders determine a borrower’s ability to repay prior to originating covered loans.

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Supreme Court Again Declines to Review Ruling That Courts Determine Availability of Classwide Arbitration

By Andrew C. Glass, Robert W. Sparkes III, Roger L. Smerage, Elma Delic

The United States Supreme Court recently declined to review a ruling that courts, not arbitrators, determine the availability of classwide arbitration. Previous attempts by putative collective or class representatives to obtain certiorari on the issue were unsuccessful. See, e.g., Opalinski v. Robert Half International Inc., 61 F.3d 326, 330-35 (3d Cir. 2014) (“Opalinski I”) (For K&L Gates’ coverage on the denials of the prior petitions see here and here). The Court’s most recent decision in Opalinski v. Robert Half International Inc. suggests that the Court still does not perceive sufficient disagreement, if any, among the federal courts of appeals on the issue. 677 F. App’x 738, 740 (3d Cir. 2017) (“Opalinski II”). As a result, the trend continues that the availability of classwide arbitration is a gateway issue for the courts.

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President Signs Congressional Resolution Overturning CFPB Arbitration Rule

By Andrew C. Glass, Robert W. Sparkes III, Roger L. Smerage, Elma Delic

The President signed this week the congressional joint resolution nullifying the Consumer Financial Protection Bureau (“CFPB”) arbitration agreements rule. Following adoption by the House, the Senate, in a 50-50 split with the Vice President breaking the tie, voted last week to approve the resolution (noted in a previous post here). The CFPB can only reinstate the rule, or one that is similar, if Congress expressly authorizes it to do so in subsequent legislation.

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“True Lender” Litigation Heats Up: Small Business Sues Marketplace Lender and Partner Bank, Alleging Conspiracy to Evade Usury Laws

By David D. Christensen and Jennifer Janeira Nagle

Over the last several years, a number of U.S. state and federal government enforcement actions have challenged the viability of the bank partnership model that many marketplace lenders have used to fund consumer and small business loans. Specifically, regulators have argued that, in partnerships where the non-bank entity controls much of the funding process or the bank has little-to-no risk of loss, the non-bank entity is the “true lender.”

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