Financial Institutions Law Blog

Up-to-date Information on Financial Institutions

As expected, and with few changes, the Consumer Financial Protection Bureau adopted its proposed rule barring financial companies regulated by the agency from including class action waivers in arbitration agreements. Arbitration clauses in new contracts offering a consumer financial product or service will need to include specified language indicating that arbitration cannot be used to stop the consumer from pursuing a class action.…
On Oct. 19, 2016, the Ninth Circuit held that merely enforcing a security interest is not “debt collection” under the federal Fair Debt Collection Practices Act (“FDCPA”).  In so holding, the Ninth Circuit disagreed with earlier decisions by the Fourth and Sixth Circuits, creating a split that might eventually be resolved by the U.S. Supreme Court.…
On August 31, 2016, in a ground breaking decision, the United States District Court in Los Angeles ruled that CashCall, Inc. violated the Consumer Financial Protection Act in connection with efforts to collect on certain loans that would have been held void under state law had CashCall originated the loans in question in the states where the borrowers resided.  According to the pleadings, CashCall had worked closely with the originator of the loans in question, assisting…
Where do marketplace lenders and secondary loan market participants find themselves on the issue of preemption of state usury laws after the June 27 denial of the petition for a writ of certiorari in Madden v. Midland by the U.S. Supreme Court? In Madden v. Midland, the US Court of Appeals for the Second Circuit refused to follow the “valid-when-made” rule when considering the scope of federal preemption of state usury laws under the National…
An act passed by Congress last year makes changes to IRS Form 1098 (Mortgage Interest Statement) starting in tax year 2016 (reported commencing in calendar year 2017).  Internal Revenue Code Section 6050H(b)(2)(D) requires that a Form 1098 include “the amount of outstanding principal on the mortgage as of the beginning of the calendar year” as well as the date of origination of the mortgage loan.  Earlier this month, the IRS released a revised Form 1098…
Many consumer-facing businesses have learned to identify high-risk Prop 65 targets:  soft, flexible plastics; faux and colored leathers; and any kind of brass or metal that may contain lead or other heavy metals.  But businesses need to take action to avoid Prop 65 liability based on a new culprit: bisphenol-A (BPA) that may be lurking in your cash register receipts and other thermal papers. …
Google announced on May 11 that effective on July 13, 2016 it will ban all payday loan advertisements from its site.  Google was responding to concerns raised by consumer advocates who argued that the lending practice exploits the poor and vulnerable by offering them immediate cash that must be repaid at exorbitant interest rates.  Google joins Facebook in prohibiting such advertisements.  The decision marks the first time that Google has announced a global ban on…
In a news conference today President Obama addressed rules and proposed regulations announced Thursday intended to help the U.S. fight tax evasion and other crimes connected to anonymous offshore companies and accounts.  The announcements come after a month of intense review by the administration following the first release of the so-called Panama Papers, millions of documents stolen or leaked from Panamanian law firm Mossack, Fonseca.  The papers have revealed a who’s who of international politicians,…