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On September 30, 2018, California Governor Jerry Brown signed into law SB 1235, which requires disclosures of key terms in connection with certain commercial financing by non-banks and could impact bank/non-bank arrangements as well. With the passage of the Act, California became the first state to require consumer-style disclosures for commercial financing. The Act is intended to facilitate comparisons of financing options by recipients of covered financing offers. It establishes a general framework for the…
A mere nine days after releasing its Final Rule regarding arbitration to the public, the CFPB has published the Final Rule in the Federal Register. This is significant because publication in the Federal Register triggers the countdown to the Final Rule’s effective date (60 days after publication) and ultimately its application to new agreements (180 days after the effective date). By our calculations, the Final Rule becomes effective on September 18, 2017, and will apply to…
Ending months of speculation and insider reading of tea leaves, on July 10, 2017, the CFPB issued a final rule regarding the use of arbitration agreements in specified consumer financial contracts (Final Rule). The Final Rule was published in the Federal Register on July 19, 2017. As was substantively expected, the Final Rule: 1) bars class action waivers; and 2) imposes reporting requirements for individual arbitrations conducted pursuant to pre-dispute arbitration agreements. The Final Rule…
As widely anticipated, the Consumer Financial Protection Bureau (CFPB) issued a Notice of Proposed Rulemaking seeking comments on proposed regulations that would: 1) bar class action waivers; and 2) impose reporting requirements for individual arbitrations pursued pursuant to pre-dispute arbitration agreements (“Proposed Rule”). The Proposed Rule is accompanied by over 350 pages of Supplementary Information in which the CFPB makes it case that class action litigation and CFPB monitoring of individual arbitrations are both “in…
On October 7, the CFPB announced that it is considering two rulemaking proposals that would severely limit the use of pre-dispute arbitration clauses in consumer financial service contacts. Ignoring the well-documented problems and abuses associated with class action litigation, the Bureau has concluded that because class actions effect a greater aggregate transfer of wealth from alleged “wrongdoers” to plaintiffs’ class action lawyers and plaintiff classes than does arbitration, it is in the public interest and…
Today, the CFPB announced its proposals regarding arbitration agreements in consumer financial product contracts. In a move that has plaintiffs’ class action lawyers cheering, the CFPB proposes to require litigation of class claims in court. The CFPB will not ban arbitration of individual actions—at least not yet. Instead, it proposes to require companies to submit claims filed and awards issued for Bureau review and possible publication. The CFPB’s proposal was issued in conjunction with a…
The CFPB’s exercise of its sweeping authority to prohibit unfair, deceptive, and abusive acts or practices (UDAAP) continues to command the attention of financial institutions and financial services companies regulated by the agency. As promised by CFPB Director Richard Cordray, the CFPB has defined UDAAP primarily through enforcement actions, along with a few agency-issued supervisory findings and guidance bulletins. To assist regulated and potentially regulated entities in understanding how the CFPB will exercise its UDAAP…
On Wednesday, July 8, the CFPB announced its latest — and largest — settlement of claims of unfair and deceptive debt collection practices. The OCC and 47 State Attorneys General all were part of the overall settlement. The numbers are significant: $50 million in restitution and $166 million in penalties. The injunctive relief is extensive, with pages and pages of requirements that extend for several years even though the credit card issuer stopped the practices…
You will feel right at home with the CFPB’s newly augmented web-based public-facing complaints database. In accordance with its Final Policy Statement issued on March 19, 2015, the CFPB began publishing consumer complaint narratives. There are about 7,700 narratives in the database, which have been collected since March 2015. The narratives are scrubbed of all personal information in accordance with the methodology specified in the Final Policy Statement, which requires reading around numerous redactions…
Zombie or no-injury plaintiffs seeking to represent zombie or no-injury classes are on the rise. In these suits, plaintiff was not injured, and there’s no way to prove who, if anyone, in the class was. Thomas Robins is one of those plaintiffs who brought suit on behalf of a class of similarly situated consumers against Spokeo for alleged violations of the Fair Credit Reporting Act (FCRA). The Ninth Circuit found Robins had standing to pursue…