On March 7, 2018, the FDIC entered into a consent order with The Bancorp Bank for allegedly inaccurate disclosures concerning the amount of transaction fees assessed on cardholders. This consent order is the latest in a series of consent orders from federal agencies in recent years regarding allegedly inadequate or misleading account disclosures. Read our… Read More
Tag Archives: Enforcement Actions
First State Charges Broker-Dealer in Connection with Violations of DOL Fiduciary Rule
Posted in Enforcement ActionsOn February 15, 2018, the Enforcement Section of the Massachusetts Securities Division (the “Division”) of the Office of the Secretary of the Commonwealth charged a registered broker-dealer (the “Broker-Dealer”) that operated in Massachusetts with violating its own internal policies designed to ensure compliance with the U.S. Department of Labor’s (the “DOL”) Fiduciary Rule. The DOL… Read More
Leading on Leads? CFPB Takes Action Against Online Lead Aggregators
Posted in CFPB, Enforcement Actions, Payday Lending, Privacy, UDAAPOn September 6, 2017, the CFPB announced that it has taken action against an online lead aggregator. The allegations revolved around the company’s selling personal information of consumers who were interested in small-dollar or installment loans to online lenders. It was alleged that the loans ultimately offered to consumers were, or were likely to be, void… Read More
CFPB and Card Issuers Resolve ECOA Action Involving Cards Offered in U.S. Territories and Cardholders with Spanish Language Preference
Posted in CFPB, Credit Cards, Disparate Impact, Enforcement Actions, Fair LendingOn August 23, 2017, the CFPB announced the resolution of an administrative action under the Equal Credit Opportunity Act and its implementing regulation, Regulation B, against American Express Centurion Bank and American Express Bank, FSB. In the proceeding, the CFPB alleged the Issuers violated ECOA by (i) offering credit and charge card products and services to… Read More
CFPB Case Against Payment Processors Dismissed: Court Sanctions Bureau for Non-Responsive Discovery
Posted in CFPB, Enforcement ActionsIn another significant litigation setback for the CFPB, a U.S. District Court in Atlanta imposed discovery sanctions against the Bureau and dismissed all claims against payment processors alleged to have aided and abetted an unlawful debt collection scheme. Cases brought by the CFPB’s Division of Enforcement have seen the imposition of significant levels of damages… Read More
FDIC Action Is a Reminder that Bank Partnerships Are Not a Panacea for Non-Banks
Posted in Enforcement Actions, UDAAPOn May 11, 2017, the FDIC announced that it had reached settlements with Bank of Lake Mills and two of its “institution-affiliated parties””—Freedom Stores, Inc. and Military Credit Services, LLC—for allegedly engaging in unfair and deceptive practices in violation of Section 5 of the FTC Act. Read our client alert.
Court Finds CFPB Case Against Payment Processor Lacking
Posted in CFPB, Enforcement Actions, UDAAPOn March 17, 2017 the United States District Court for the District of North Dakota granted the motion of Intercept Corporation and its senior executives to dismiss the complaint filed almost a year ago by the CFPB. Intercept is a payment processor that initiates ACH transactions to consumer accounts on behalf of its merchant-customers. This… Read More
Financial Services Report – Winter 2016
Posted in Arbitration, Auto Lending, CFPB, Credit Cards, Disparate Impact, Electronic Payments, Enforcement Actions, Fair Lending, Foreclosure, Military Issues, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, UDAAPHope you survived all of those awkward Thanksgiving holiday conversations—amazing how divided people are on whether the court got it right in the PHH case, isn’t it? So on we go into the holiday season, while visions of Dodd-Frank repeal dance in our heads. No long winter’s nap for the CFPB, not with the inauguration… Read More
CFPB and California Announce Enforcement Actions Against Online Lender
Posted in CFPB, Enforcement ActionsOn Tuesday, September 27, 2016, the CFPB and the California Department of Business Oversight (“DBO”) announced separate enforcement actions against Flurish, Inc., an online lender that does business as “LendUp” in California and two dozen other states. LendUp agreed to pay, collectively, $3.43 million in restitution to consumers and $2.8 million in civil money penalties… Read More
CFPB Levies Largest Civil Money Penalty in Agency History, Alleges “Abusive” Conduct
Posted in CFPB, Credit Cards, Enforcement ActionsOn September 8, 2016, the CFPB, the OCC, and the City and County of Los Angeles entered into a Consent Order with Wells Fargo, with civil money penalties totaling $185 million. The CFPB’s portion of those penalties is $100 million, which is the largest fine the Bureau has imposed since opening its doors in July… Read More
CFPB Relies on “Mystery Shoppers” in BancorpSouth Mortgage Discrimination Settlement
Posted in CFPB, Disparate Impact, Enforcement Actions, Fair Lending, MortgageCFPB “mystery shoppers,” along with secret recordings, were part of the CFPB’s factual allegations in a recent mortgage discrimination settlement. The DOJ and CFPB announced a settlement with BancorpSouth Bank to resolve alleged violations of the Fair Housing Act and Equal Credit Opportunity Act (ECOA). The complaint alleges that from at least 2011 to 2013,… Read More
ACH Debit Transactions – Whose Agent Are You?
Posted in CFPB, Enforcement Actions, UDAAPTucked away in a seeming innocuous paragraph in a complaint, the CFPB has asserted an extraordinary and potentially far-reaching expansion of its authority. On June 6, 2016, the CFPB filed an action in a U.S. district court asserting that Intercept Corporation (Intercept) (and each of its owners) engaged in unfair acts and practices in violation… Read More
CFPB Suffers First Official CID Challenge
Posted in CFPB, Enforcement ActionsOn April 21, 2016, Judge Richard J. Leon of the United States District Court for the District of Columbia ruled on the first judicial challenge to the Consumer Financial Protection Bureau’s (“CFPB,” or “Bureau”) authority to issue and enforce a civil investigative demand (“CID”). The Bureau had issued to the Accrediting Council for Independent Colleges… Read More
Is the CFPB the New Cop on the Data Security Beat?
Posted in CFPB, Enforcement Actions, Privacy, UDAAPOn March 2, 2016, the Consumer Financial Protection Bureau (“CFPB”) broke new ground (at least for the CFPB) when it released a consent order against Dwolla, Inc., an online payment platform, regarding data security. While in many respects the data security “message” sent by the CFPB is not a new one (e.g., companies must live up to… Read More
CFPB Argues Statute of Limitations Not Applicable in Certain UDAAP Actions
Posted in CFPB, Enforcement Actions, Mortgage, UDAAPOn January 15, 2016, the CFPB filed a brief opposing a motion to dismiss in the Matter of Integrity Advance, LLC (“Integrity”) asserting that there is no time bar for certain CFPB actions under its UDAAP authority. The CFPB’s argument cites its own RESPA enforcement action, which is currently on appeal, in contending that the… Read More
EVENT: ACI’s 14th National Forum on Prepaid Card Compliance
Posted in CFPB, Enforcement Actions, EventsThursday, January 28, 2016 8:05 a.m. – 9:20 a.m. Mandarin Oriental 1330 Maryland Avenue SW Washington, D.C. 20024 Morrison & Foerster partner Obrea Poindexter is speaking on the “An In-Depth Analysis of the CFPB’s Proposed Rule for Prepaid Cards, Assessment of What the Final Rule Will Look Like, and an Analysis of Recent CFPB Enforcement… Read More
Big Data, Big Deal
Posted in Disparate Impact, Enforcement Actions, PrivacyThe FTC rang in the New Year with a report, Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues. The report wrestles with the implications of using big data analytics to target and make decisions about customers. Some of the FTC’s observations are common sense, but others require more careful analysis. For example,… Read More
Higher One, Inc. Enforcement Actions Remind Nonbank Service Providers of Their Legal Obligations When Partnering With Banks
Posted in CFPB, Enforcement Actions, UDAAPOn December 23, 2015, the Federal Reserve Board (“Federal Reserve”) and the Federal Deposit Insurance Corp. (“FDIC” and, collectively with the Federal Reserve, the “Agencies”) announced settlements with Higher One, Inc. (“Higher One”) for alleged violations of the prohibition against deceptive acts and practices under Section 5 of the Federal Trade Commission Act. In conjunction… Read More
CFPB Takes Action Against Lead Aggregators
Posted in CFPB, Enforcement ActionsOn December 17, 2015, the Consumer Financial Protection Bureau (“CFPB”) announced that it has taken action against lead aggregators that resold sensitive personal information to lenders and debt collectors. In a complaint against T3Leads and a consent order against a sole proprietorship (“Lead Publisher”), the CFPB alleged that the lead aggregators exposed millions of consumers… Read More
CFPB Keeps the Heat on Debt Collection, Consumer Reporting
Posted in CFPB, Enforcement ActionsOn December 7, 2015, the CFPB announced another consent order going after a firm for alleged violations the Consumer Financial Protection Act, FCRA, and FDCPA. The CFPB alleges that Massachusetts debt collection firm Collecto, Inc. (dba EOS) paid a cell phone provider over $35 million for a portfolio of more than three million cellphone accounts,… Read More
#ThrowbackThursday: CFPB as HUD: Another Section 8 Consent Order Displays CFPB’s RESPA Approach
Posted in CFPB, Enforcement Actions, MortgageIn October 2014, Morrison & Foerster published the client alert “CFPB as HUD: Another Section 8 Consent Order Displays CFPB’s RESPA Approach.” Summary: In a recent RESPA enforcement action, the CFPB negotiated a consent order with Lighthouse Title, Inc. (“Lighthouse”) for alleged violations of RESPA’s prohibition against kickbacks. RESPA Section 8(a) and its implementing regulation,… Read More
CFPB’s Message to Employment Background Screening Providers: A Rose by Any Other Middle Name is Probably the Wrong Person
Posted in CFPB, Enforcement ActionsOn October 29, the CFPB took action against two of the country’s largest employment background screening report providers for violations of the FCRA. This is one of the CFPB’s most significant FCRA actions to date, following a relatively small number of FCRA consent orders by the CFPB over the past few years. The providers are… Read More
#ThrowbackThursday: FTC Comments on the CFPB’s Foray into Mobile Financial Services, Emphasizing Its Extensive Consumer Protection Efforts in the Space, Including Enforcement Actions
Posted in CFPB, Enforcement Actions, Mobile PaymentsIn September 2014, Morrison & Foerster published the client alert “FTC Comments on the CFPB’s Foray into Mobile Financial Services, Emphasizing Its Extensive Consumer Protection Efforts in the Space, Including Enforcement Actions.” Summary: Earlier this month, the Bureau of Consumer Protection of the FTC submitted comments to the CFPB in response to the CFPB’s June… Read More
#ThrowbackThursday: How to Be a Good Corporate Citizen CFPB Style
Posted in CFPB, Enforcement ActionsIn July 2013, Morrison & Foerster published the client alert “How to Be a Good Corporate Citizen CFPB Style.” Summary: On June 25, 2013, CFPB issued Bulletin 2013-06 identifying “responsible business conduct” that may impact the exercise of its “enforcement discretion.” The Bulletin specifies the following four broad categories of conduct that the CFPB “may… Read More