On September 29, 2016, the United States Supreme Court granted certiorari in the matter of Expressions Hair Design et al. v. Schneiderman, on appeal from the Second Circuit Court of Appeals, in order to resolve a circuit split involving whether state “no-surcharge” laws violate the First Amendment.

Continue Reading United States Supreme Court to Resolve Circuit Split Involving the Constitutionality of “No Surcharge” Laws

Last month, the Seventh Circuit reversed the dismissal of a putative class action alleging that debt collector defendants used misleading language in their state court collection complaints in violation of the federal Fair Debt Collection Practices Act (FDCPA). In so ruling, the Seventh Circuit joined the numerous other circuits that have already addressed the issue in concluding that “pleadings or filings in court can fall within the FDCPA.”

Continue Reading Seventh Circuit Holds That Filings in Court Can Fall Within the FDCPA

A court settlement involving Illinois lenders suggests that Illinois Attorney General Lisa Madigan is making good on her promise to crack down on lenders’ attempts to charge excessive fees to debtors. The settlement in Illinois v. CMK Investors, Inc., which the Attorney General’s office announced this week, requires CMK Investors, Inc. to both cease efforts to collect on accounts with excessive fees and reimburse customers who overpaid. The settlement also permanently and immediately prohibits CMK from making loans with an interest rate above the state’s 36 percent limit.

A court settlement involving Illinois lenders suggests that Illinois Attorney General Lisa Madigan is making good on her promise to crack down on lenders’ attempts to charge excessive fees to debtors. The settlement in Illinois v. CMK Investors, Inc., which the Attorney General’s office announced this week, requires CMK Investors, Inc. to both cease efforts to collect on accounts with excessive fees and reimburse customers who overpaid. The settlement also permanently and immediately prohibits CMK from making loans with an interest rate above the state’s 36 percent limit.


Continue Reading Lenders Beware: Settlement Suggests Illinois Attorney General Is Cracking Down on Interest Fees

On October 11, 2016, the United States Supreme Court granted certiorari in the matter of Johnson v. Midland Funding LLC, on appeal from the Eleventh Circuit Court of Appeals, in order to resolve whether a conflict exists between the Fair Debt Collection Practices Act (“FDCPA”) and the Bankruptcy Code. In Midland Funding, the appellate court found a debt collector to have violated the FDCPA by filing a proof of claim on time-barred debt in a Chapter 13 bankruptcy.

Continue Reading Supreme Court to Hear Case Involving Interplay Between Fair Debt Collection Practices Act and Bankruptcy Code

The Consumer Finance Protection Bureau has stated that discrimination by creditors based on gender identity or sexual orientation violates the Equal Credit Opportunity Act. As Slate online magazine put it, when providing the first widespread coverage of this issue in an article published last week,“[t]he federal government just accomplished a decades long goal of LGBTQ advocates with a single letter.” The letter referred to was actually sent on August 30, 2016, from the CFPB to Services and Advocacy for GLBT Elders (“SAGE”), a national social service and advocacy organization for gay, lesbian, bisexual, and transgender elders.

Continue Reading Don’t Ask, Don’t Discriminate: CFPB States That ECOA Prohibits Creditor Discrimination Based on Gender Identity and Sexual Orientation

The Consumer Financial Protection Bureau has issued yet another suite of regulatory changes related to mortgage servicing. The rules add additional protections for borrowers—and therefore increased requirements for servicers—as well as clarify certain issues that have been the subject of questions and confusion by servicers.

Continue Reading New CFPB Mortgage Servicing and Loss Mitigation Rules to Take Effect in 2017 and 2018; New FDCPA Safe Harbor CFPB White Paper May Signal More to Come from CFPB on Loss Mitigation

The Consumer Financial Protection Bureau (“CFPB”) announced yesterday at a field hearing in Sacramento, California, that it is considering several potential approaches to issuing rules on debt collection. The CFPB would take this action pursuant to its authority under the Dodd-Frank Act to issue regulations implementing the Fair Debt Collection Practices Act (“FDCPA”) as well as to issue regulations prohibiting unfair, deceptive, and abusive acts and practices. This rulemaking would mark the first time regulations would be issued to implement the FDCPA, and it is likely to have significant effects on the debt collection industry.

Continue Reading CFPB Releases Outline of Proposals for Debt Collection Rules

In an important ruling for debt collectors, the Ninth Circuit Court of Appeals held in Hernandez v. Williams, Docket No. 14-15672 (2016), that the failure of a debt collector (successor or otherwise) to send its own “validation notice” under 15 U.S.C. §  1692g(a) to a consumer violates the Fair Debt Collection Practices Act (“FDCPA”), specifically 15 U.S.C. § 1692g, even when a prior debt collector sent its own validation notice to the same person. In doing so, the Court reasoned that placing the requirement on any and all debt collectors involved was in line with the consumer-protection purpose of the FDCPA.

Continue Reading Ninth Circuit Holds That Each Debt Collector Must Send to the Consumer Disclosures After Its Own Initial Communication Under the Fair Debt Collection Practices Act (FDCPA)