Consumer Financial Services Law Monitor

Monitoring the financial services industry to help companies navigate through regulatory compliance, enforcement, and litigation issues

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The Texas House of Representatives recently introduced new legislation, H.B. No. 996, to amend the Texas Fair Consumer Debt Collection Act (“TFCDCA”) to require debt buyers to provide additional written disclosures to consumers regarding debt that could be subject to a statute of limitations defense in a collection action.  The proposed bill comes as courts across the country continue to wrestle with the language of the statute of limitations disclaimer in debt collection letters…
The Federal Reserve Board of Governors and the Federal Deposit Insurance Corporation (“FDIC”) issued a joint advisory making financial institutions aware of a recent change to the Fair Credit Reporting Act (“FCRA”) that provides that financial institutions may offer to remove defaults in private education loan borrowers’ consumer reports under an approved rehabilitation program. Qualifying borrowers must show consumer reports containing a default on a private education loan, and the financial institution must submit a…
On February 7, the Seventh Circuit Court of Appeals ruled in favor of the accounts receivable management industry, finding that a debt collector did not misrepresent the “character” of debt by reporting unpaid medical bills owed to a single provider separately rather than in the aggregate. In Rhone v. Medical Business Bureau, LLC, the Seventh Circuit Court of Appeals reversed a decision by the United States District Court for the Northern District of Illinois,…
The District Court for the Eastern District of Arkansas granted summary judgment in favor of defendant debt collector ProCollect, Inc. in Jennifer Fox v. ProCollect, Inc. by ruling that ProCollect did not violate the Fair Debt Collection Practices Act by making two phone calls to a wrong number after first learning the number was not the debtor’s phone number.  The Court’s ruling illustrates the difference between a debt collector that mistakenly contacts the wrong individual…
In a recent case, the United States District Court for the Southern District of California partially dismissed a consumer’s claims under the Telephone Consumer Protection Act.  The case is Bodie v. Lyft, No. 3:16-cv-02558-L-NLS (S.D. Cal. Jan. 16, 2019).  Plaintiff Jason David Bodie’s complaint alleged that he received two unsolicited text messages from a telephone number that belongs to or was used by Lyft on or about October 10, 2016.  Bodie alleged that the…
The Seventh Circuit recently affirmed judgment in favor of the national consumer reporting agencies (“CRAs”), rejecting a plaintiff’s attempt to impose Fair Credit Reporting Act liability upon the CRAs for reporting information the furnisher had verified as accurate.  This case represents a significant victory for CRAs facing collateral attacks of the accuracy of the accounts they report.  The case is Humphrey v. Trans Union, LLC, et al.  A copy of the opinion can be found…
If a recent proposal is any indication, the Federal Housing Finance Agency (“FHFA”) may feel more comfortable with the status quo than with permitting Fannie Mae and Freddie Mac (“the Enterprises”) to explore the benefits of using VantageScore 3.0, a credit-scoring alternative jointly created by the nationwide consumer reporting agencies, or “CRAs.” Last month, the FHFA announced a proposal that establishes standards and criteria for the Enterprises to adopt new credit-scoring models. This proposal satisfies…
On January 29, the District Court in Georgia, in Jones v. Jason A. Craig and Associates, P.C., denied a motion for judgment on the pleadings by a defendant-collections law firm seeking dismissal of a Fair Debt Collection Practices Act claim.  Plaintiff John Jones alleges that the law firm’s use of “& Associates,” as part of its name in a debt collection letter, was a violation of the FDCPA.  The collection letter at issue reads “JASON…
On January 25, the Consumer Financial Protection Bureau posted a list of four frequently asked questions, or “FAQs,” clarifying some aspects of the TILA-RESPA Integrated Disclosure Rule (“TRID Rule”).  The TRID Rule, which applies to many consumer mortgage loans, consolidated the various disclosure forms that were required under the Truth in Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”) into two forms: (1) a Loan Estimate that must be given to a…
On January 25, the Illinois Supreme Court sided with consumers in issuing a unanimous decision that a Six Flags season pass holder could bring a claim under Illinois’ Biometric Information Privacy Act (the “BIPA”) based on the amusement park’s collection of customer fingerprints—even absent allegations of real-world injury.  This opinion provides a boost to the state’s unique privacy law and the hundreds of pending cases involving allegations under the law.  A copy of the full…