In its proposed debt collection rules, the CFPB would allow a debt collector to satisfy the FDCPA requirement to provide the validation notice by sending the debtor an email or text message that includes a hyperlink to a secure website on which the notice is accessible, subject to a series of specific conditions set forth in the proposed rules.  The permissibility of that approach under the FDCPA was called into question by the decision issued…

A new CFPB blog post titled “An update on credit access and the Bureau’s first No-Action Letter” provides a boost to lenders using alternative data and machine learning in their underwriting models. The Bureau issued its first (and so far only) no-action letter in September 2017 to Upstart Network Inc. stating that the CFPB had no present intention to take enforcement or supervisory action against the lender under the ECOA relating to the…

The Department of Housing and Urban Development is expected to soon release proposed revisions to its 2013 rule under which HUD or a private plaintiff can establish liability under the Fair Housing Act (FHA) for discriminatory practices based on disparate impact even if there is no discriminatory intent (Rule).  The proposal has been submitted to Congress for review pursuant to the Congressional Review Act.  Comments on the proposal will be due on or before 60…

Last Friday, the CFPB announced that it had filed yet another meaningful attorney involvement lawsuit against a debt collection law firm – Forster & Garbus, P.C.  It’s notable enough that the Bureau continues to pursue these cases (even while proposing a “safe harbor” for meaningful attorney involvement in its proposed debt collection rules), but there are a number of very notable – and troubling – things about this particular case. The primary thrust of the…

As part of our continuing discussion of the CFPB’s proposed debt collection rules, we focus in this blog post on a provision that occupies very little real estate in the proposal, but could have tremendous significance: a new “safe harbor” provision relating to meaningful attorney involvement by debt collection law firms, contained in section 1006.18(g) of the proposed rules. Now, you have seen the concept of meaningful attorney involvement play a prominent role in CFPB…

The Bureau’s proposed debt collection rules, released last week, only apply to debt collectors, as defined under the Fair Debt Collection Practices Act.  So, why should creditors and servicers be interested in them?  Lots of reasons. First, a number of provisions call for creditors (or by extension, servicers) to take action before a debt is assigned to a collection agency in order to facilitate the collection agency’s use of electronic communications with the consumer. …