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The CFPB recently announced the issuance of its first no-action letter (“NAL”) to Upstart Network, Inc., an online lending platform that uses alternative data to model consumer credit decisioning and pricing. The letter signifies that the CFPB has no present intention to recommend an enforcement or supervisory action against Upstart for violation of the Equal Credit Opportunity Act. This NAL comes as the Bureau “continues to explore the use of alternative data to help make…
CFPB Director Richard Cordray has a little more job security this week than last week. On February 16, 2017, the U.S. Court of Appeals for the District of Columbia granted the CFPB’s request for an en banc review of its October 2016 decision finding the CFPB leadership structure unconstitutional. As detailed in our client alert: CFPB Hit by Major Setback In D.C. Circuit, the D.C. Circuit previously found that the single-director structure of the…
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 May 20, 2015, the attorneys general of 31 states settled with three major credit reporting agencies (CRAs) for six million dollars and commitments to make a number of business practice changes. With the exception of $6 million payment–which can be seen as relatively small, all things considered–the settlement largely mirrors the CRAs’ March 2015 agreement with the New York Attorney General. Collectively, these agreements require CRAs to comply with the Fair Credit Reporting Act…
On April 29, 2015, the CFPB, in conjunction with the Maryland Attorney General, filed six proposed consent orders—five of which are against individual defendants—in its latest RESPA enforcement action. The Bureau alleges that a title company, two of its executives, and four loan officers concocted and carried out a mortgage-kickback scheme. These consent orders follow related proceedings against two national banks, which settled via consent orders requiring over $24 million in civil monetary penalties. Read…
A divided Seventh Circuit found that the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., requires mortgage servicers to credit online electronic payments on the day the customer authorizes the payment, despite not actually receiving the payment at that time. Fridman v. NYCB Mortg. Co., LLC, No. 14-2220 (7th Cir. Mar. 11, 2015). TILA generally requires mortgage servicers to credit payments to consumer accounts on “the date of receipt,” unless the delay…