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On Jan. 8, 2019, the U.S. Supreme Court issued a unanimous decision regarding an important procedural issue under the Federal Arbitration Act (FAA). In Henry Schein, Inc. v. Archer & White Sales, Inc., No. 17-1272, it held that under the FAA, courts must enforce provisions in arbitration agreements delegating threshold questions of whether claims are subject to arbitration to the arbitrator. In so doing, the Court overruled a rule that allowed federal courts to…
On March 20, Florida Governor Rick Scott signed Senate Bill 220 into law. The bill is designed to limit the ability of defendants in foreclosure proceedings to keep contesting the foreclosure after agreeing, in bankruptcy, to surrender the property to their lenders. By way of background, when an individual debtor files for bankruptcy, whether under Chapter 7 (liquidation) or Chapter 13 (reorganization), the debtor is required to make a statement under penalty of perjury as…
The Second Circuit’s Sept. 19, 2017 decision in Katz v. The Donna Karan Company, LLC, et al., Dkt. No. 15-464, has potentially provided a new road map to defeating class actions alleging statutory damages for bare procedural violations. The case arose under the Fair and Accurate Credit Transactions Act (FACTA). Passed in 2003, FACTA prohibits merchants from showing certain personally identifying information, including more than five digits of the customer’s payment card number, on a…
Yesterday, the Consumer Financial Protection Bureau (CFPB) announced the issuance of a consent decree with a former mortgage loan officer arising out of alleged violations of the Real Estate Settlement Procedures Act’s (RESPA) anti-kickback laws and Dodd-Frank’s prohibition on unfair, deceptive or abusive acts or practices (UDAAP). The officer was required to pay an $85,000 fine and was prohibited from working in the mortgage industry for one year. According to the consent decree, the officer,…
On May 16, 2016, in Sheriff v. Gillie, Case No. 15-338, the Supreme Court reversed a decision of the Sixth Circuit holding that private attorneys contracted by a state attorney general’s office to collect debt owed to state agencies or instrumentalities violated the Fair Debt Collection Practices Act (FDCPA) by sending collection letters on state letterhead (a practice authorized and directed by the attorney general’s office). In Ohio, the state attorney general is responsible…
Yesterday’s oral argument in the CFPB v. PHH Corporation appeal included sharp questioning about the constitutionality of the Consumer Financial Protection Bureau’s (CFPB) single-director structure, which the parties agreed had few other precedents in American government. This questioning followed an order issued by the panel on April 4, 2016, raising, sua sponte, these constitutional questions. During the argument, Circuit Judge Brett A. Kavanaugh described the CFPB as having a “very unusual structure” and commented, “You…
In March, BakerHostetler and the Ohio Banker’s League held a Financial Services Risk Summit in Cleveland, Ohio, where nearly 140 bankers, mortgage lenders, regulators, compliance officers, and counsel gathered to discuss and learn about the leading compliance, regulatory, and litigation risks facing the financial services industry. The proceedings of the Summit have now been published as the Financial Services Risk Summit Brief, available for download free here.…
In remarks delivered yesterday at a field hearing in Louisville, Kentucky, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced three actions the CFPB is taking to encourage financial institutions to expand access to checking accounts to the 10 million households it claims lack access to basic checking or savings accounts. These steps focus on encouraging institutions to improve credit reporting accuracy and expanding the offering of “low risk” deposit account options, particularly accounts that…
In a 6-3 decision yesterday, the Supreme Court in DirecTV, Inc. v. Imburgia, 577 U.S. ___, S. Ct. (2015) reversed a decision of the California Court of Appeals that refused to enforce a class action arbitration waiver on unconscionability grounds. At issue in that case was a class action arbitration waiver that contained a provision stating that the entire arbitration provision was unenforceable if “the law of your state” made class action waivers unenforceable. At…
On Wednesday, November 4, the Federal Trade Commission announced the largest-ever-coordinated federal-state enforcement initiative targeting allegedly deceptive and abusive debt collection practices. The initiative, consisting of 30 enforcement actions by federal, state, and local authorities, targets debt collectors who utilize harassing phone calls and false threats of litigation, arrest, and wage garnishment. The FTC is also cracking down on attempts to collect so-called “phantom debts” (fake debts that are not actually owed) and on debt…