Recently, the FTC and California Department of Financial Protection (DFPI) sued several companies and owners for allegedly operating an illegal mortgage relief operation. This action alleges that the defendants’ conduct violated the California Consumer Financial Protection Law (CCFPL), the FTC Act, the FTC’s Mortgage Assistance Relief Services Rule (the MARS Rule or Regulation O), the
Financial Services
CFPB Supervisory Examinations Find Violations by Student Loan Servicers and University-Owned Lenders
On September 29, the CFPB released a special edition of Supervisory Highlights on student loan servicing practices of loan servicers and schools lending to students directly. The report highlights three notable findings related to transcript-withholding practices: Federal Student Loan transfers, and Federal Student Loan payment relief and cancellation programs:
- Transcript Withholding Findings: As enders and
…
DOJ Investigating FinTech Over PPP Loans
On June 3, a federal court filing in the Southern District of Florida by an Atlanta-based FinTech company revealed that the small business lender is under DOJ investigation for alleged PPP loan approval practices. According to the FinTech, by August 2020, it processed over $7 billion in PPP loans to at least 300,000 small businesses.…
CFPB Report on Mortgage Servicers Examines Industry Responses After Pandemic Protections End
On May 16, the CFPB released a report examining metrics on mortgage servicers’ responses to the COVID-19 pandemic. According to the report, homeowners are still facing significant risks and challenges in working with mortgage servicers, particularly borrowers struggling with mortgage payments after their COVID-19 hardship forbearances and other protections under the CARES Act have expired.…
No Relief in Sight: CFPB and FTC Continue to Take Action Against Debt Settlement Companies
On April 29, the CFPB filed a proposed order in federal court seeking final judgment against three California-based defendants for engaging in unlawful fee-charging practices and deceptive telemarketing. According to the complaint, the defendants, a student loan debt relief business and a general debt-settlement company, along with their owner and CEO charged illegal upfront fees…
FTC, DOJ Seek to Enjoin Internet Provider From Facilitating Illegal Robocalls
On April 26, the DOJ filed a federal complaint on behalf of the FTC against a Voice over Internet Protocol (VoIP) service, a related company, and its owner for allegedly facilitating the transmission of illegal telemarketing robocalls.
According to the complaint, the companies and owner assisted in the transmission of millions of robocalls, including…
CFPB Signals Foray into Protecting Small Businesses from Abusive Debt Collectors
On April 15, the CFPB and FTC announced the release of a joint annual report to Congress administering the Fair Debt Collection Practices Act (FDCPA). The annual report highlights both agencies’ efforts to protect and provide debt collection relief to consumers, particularly in light of the COVID-19 pandemic and resulting economic hardship.
The report also…
Online Investment Site Settles with FTC, $2.4M Fine
On March 8, the FTC settled with the operators of an online stock trading platform over allegations that the operators fraudulently marketed investment-related services that they claimed would enable consumers to make consistent profits and beat the market. FTC alleged that the consumers were misled and those who subscribed to the operators’ stock and option…
FTC Order: Auto Marketing Company and Owner Banned From Industry for Misleading Consumers
On January 28, the FTC announced that it banned an automotive marketing company and its owner from the auto industry for the next twenty years for allegedly engaging in unfair and deceptive practices in violation of the FTC Act and failing to comply with the Truth in Lending Act’s (TILA) disclosure requirements. According to the…
CFPB Provides Guidance on How Consumers Can Obtain and Dispute Inaccuracies in Credit Reports
On January 27, the CFPB released a report directed to consumers about obtaining information in their consumer reports and disputing suspected inaccuracies in these reports with companies as needed. The CFPB notes that “[a]s families recover from the financial impact of the COVID-19 pandemic, seeking new jobs or places to live, errors in these databases…
New York Makes Remote Online Notarizations Permanent
On December 22, New York Governor, Kathy Hochul, signed Senate Bill 1780C (S1780C), which allows the state’s notaries to conduct remote online notarizations (RON). The law is to be effective on June 20, 2022. Among other things, the bill: (i) establishes definitions and sets forth registration requirements for electronic notaries public; (ii) establishes…
DFPI Reports Increase in Consumer Loans Under $2,500, Decrease in Consumer Loans Between $2,500 and $10,000
On November 16, the California DFPI released Version 2.0 of its Annual Report of Finance Lenders, Brokers and PACE Administrators Licensed under the California Financing Law (CFL). The Annual Report examined unaudited data gathered from finance lenders, brokers, and Property Assessed Clean Energy (PACE) administrators licensed under the CFL, as well as new data from…
Banking Agencies: Mortgage Servicers Should Prepare For Increased Scrutiny
The CFPB, OCC, FDIC, NCUA, and state financial regulators issued a statement this week ending the temporary supervisory and enforcement flexibility provided to mortgage servicers due to the COVID-19 pandemic by the agencies. In April 2020, the banking agencies issued an interagency statement that relaxed supervision and enforcement of mortgage servicers’ compliance with certain requirements…
CFPB Confirms November 30 Effective Date for Debt Collection Final Rules
The CFPB recently announced that its two final debt collection rules implementing the Fair Debt Collection Practices Act (FDCPA) will take effect as planned on November 30. The CFPB had previously proposed extending the final rules’ effective date by 60 days to allow for additional comments and time for implementation for those affected by COVID-19…
Debt-Collection Reforms Draw Congressional Focus Post-COVID
In April 2021, House Financial Services Committee Chair Maxine Waters (D-Calif.) introduced H.R. 2547, the “Comprehensive Debt Collection Improvement Act.” This article examines the bill’s proposed reforms, takes a closer look at a few of the key provisions related to nonjudicial foreclosure, student loan and servicemember debt-collection practices, and considers its prospects for passage in…
Navigating Troubled Company Acquisitions in the Wake of COVID-19
By Ori Katz
Distressed transactions in bankruptcy court have become big business. Sales under Section 363 of the bankruptcy code provide predictability and reliability (in the form of a court order delivering “free and clear” assets) under even the most turbulent of circumstances. Commonly known simply as “363 sales,” these transactions can provide an opportunistic purchaser with significant…