Arizona Governor Doug Ducey signed HB 2154 into law on April 11, 2018, amending and strengthening the state’s data breach notification law. Notably, the amended law significantly expands the definition of “personal information” to include a number of new data elements, including online account credentials, certain health information, and biometric data used to authenticate an individual when the individual accesses an online account.  The amended law also requires that notice be provided within 45 days after a determination that a “security system breach” has occurred and adds an obligation to notify the Arizona Attorney General and nationwide consumer reporting agencies if the security system breach involves more than 1,000 individuals.

On April 25, 2018, from 1 p.m. to 2 p.m. MT, Ballard Spahr attorneys will hold a webinar—Arizona Strengthens and Expands Data Breach Notification Law.  The webinar registration form is available here.

Click here for the full alert.

On April 12, 2018, Mick Mulvaney, the Acting Director of the Consumer Financial Protection Bureau (Bureau) testified before the Senate Committee on Banking, Housing, and Urban Affairs regarding the Bureau’s Semi-Annual Report to Congress.  The Senate Hearing comes the day after Democrats in the House Financial Services Committee questioned Mulvaney about his leadership at the Bureau.  A copy of his written testimony is here.

At the hearing, Mulvaney stuck to the theme of Bureau accountability—an issue raised in his written remarks and Semi-Annual Report—and fielded questions on topics including the Bureau’s role of protecting consumers, payday lending, data security, political favoritism, and constitutionality of the Agency:

  • Increased Congressional Oversight. Throughout the hearing, Mulvaney stressed his recommendations for greater oversight to hold the Bureau accountable.  “I don’t think that any director of any bureaucracy has ever come to you and said please take my power away, but that is what I am doing, and to the extent you can do that, I think we will all be well served by it.”  To illustrate his point, Mulvaney quipped in his opening remarks that Dodd-Frank merely required him to “appear” before Congress, but not to answer any questions.  Later, in exchanges with Republican senators, Mulvaney explained that Congress currently could do nothing to him as the Acting Director:  “You could make me look bad and that’s about it.  You can’t touch me statutorily. . . . Don’t rely on the person.  Fix the structure.”  According to Ranking Member Sherrod Brown (D-OH), however, Mulvaney “is hoping that if he does a bad enough job running the CFPB, Congress will take away CFPB’s ability to protect consumers.  Congress should not fall for it.”
  • Consumer Protection.  Several Democratic senators confronted Mulvaney about the Bureau’s goal of protecting consumers.  Sen. Elizabeth Warren (D-MA) outlined past Bureau successes, as well as Mulvaney’s attempts as a Congressman to get rid of the agency, and rebuked Mulvaney for “tak[ing] an obvious joy in talking about how the CFPB will help banks more than it will help consumers….  You’re hurting real people to score cheap political points.”
  • Payday Lending.  Other Democrats targeted Mulvaney’s payday lending decisions, including his decision to dismiss a lawsuit filed by his predecessor against a payday lender and his decision to reconsider the Bureau’s payday lending rules. Mulvaney refused to comment on the dismissal based on advice from legal staff and an ongoing investigation.  He also defended his decision to reconsider the payday lending rules.  He repeatedly stated that he has no “preconceived notions” about revoking the payday lending rules, but rather believes the rules were “rushed” and should go through the notice and comment period.  Mulvaney noted, however, that he has the discretion to reach a different conclusion about the payday lending rules than his predecessor, Richard Cordray.  During questioning by Sen. Doug Jones (D-AL), Mulvaney flaunted his view that payday lending concerns should be resolved by state legislatures, not consigned to the discretion of the Bureau’s director or Congress: “Who do you trust more, home town legislature or United States Congress.  Personally, I have a great deal of faith in my state legislature.”  Surprisingly, as was the case during his appearance before the House Committee, nobody asked him to comment on the lawsuit filed last week by the CFSA (the trade association of payday lenders) against the Bureau challenging the legality of the payday lending rule.
  • Data Security.  While data security was an issue that spanned both sides of the aisle, Republican senators focused on the Bureau’s handling of consumer data while their Democratic colleagues focused on Mulvaney’s position on the Equifax data breach.

As to the Bureau’s handling of data, Mulvaney explained that he has instituted a data freeze and commissioned a report about the Bureau’s data collection and protection.  While the data freeze does not apply to enforcement actions, the Bureau plans “to limit data that we take possession of.  . . . instead of having them send it to us electronically, we are going to look at it.”  Mulvaney acknowledged that “everything that we keep is subject to being lost.”  When Sen. David Perdue (R-GA) asked what data had been lost, Mulvaney declined to publicly comment.

Sen. Mark R. Warner (D-VA) explained that much of the data collected by the Bureau is anonymous and needed to show discriminatory patterns.  He, along with Sen. Chris Van Hollen (D-MD) and Sen. Robert Menendez (D-NJ), questioned Mulvaney instead on the Bureau’s failure to take action against Equifax for its data breach.  Mulvaney testified that his regulatory agenda includes rulemaking to protect consumers from credit reporting abuses and agreed that companies should have to inform the public about hacked data in a certain amount of time.

  • Political Favoritism.  Democrats also scrutinized Mulvaney’s decision to hire political “cronies” for Bureau positions and pay them large salaries.  Mulvaney asserted that he used the same “pads-and-dads” system used at the OMB, where a career staffer and political designee work on a team, and that the appointees were paid using the scale set by his predecessor.  While Mulvaney also claimed that he had “complete authority under the statute” to hire and pay such appointees, the Committee questioned how his hiring decisions were consistent with Mulvaney’s fiscally conservative views.  Sen. Jon Tester (D-MT) noted that Mulvaney’s chief of staff is paid $47,000 more per year than her predecessor and stated the hiring “smacks of political favoritism…. [Mulvaney] can’t be conservative just when it’s convenient.”

Sen. Tom Cotton (R-AR) struck back on the salary issue with questions about the salary of Leandra English, the Deputy Direct of the Bureau and the plaintiff in a pending lawsuit that seeks to have her named as Acting Director instead of Mulvaney. Mulvaney testified that he does not speak with English because of the litigation, nor does he know what she does at the Bureau.  Sen. Cotton commented, and Mulvaney agreed, that “she’s earning $212,000, claiming to be the director, running around and we have no idea what she does all day long.”  Ranking Member Brown took a different view, however, noting earlier in the hearing that Mulvaney’s appointment ignores the law, which states that the deputy director, rather than a political appointee, should take over the Acting Director role.

  • Constitutionality of the Bureau.  Mulvaney also walked a narrow line to answer questions about the constitutionality of the agency that he heads.  “I’m not sure that I have the discretion to consider this agency to be unconstitutional. . . . I think the system starts to break down if people who work at places make their own conclusions about constitutionality.  If the President tells me it is unconstitutional, I’ll pay attention.  I am assuming it’s constitutional every single day when I go in. . . .”

On April 12, 2018, the United States Court of Appeals for the District of Columbia Circuit held oral argument on the appeal brought by Leandra English, CFPB Deputy Director, of the district court’s denial of her application for preliminary injunction. If granted as requested by Ms. English, the injunction would install Ms. English as the Acting Director, in lieu of Mick Mulvaney, whom President Trump appointed to the position following the resignation of Richard Cordray.

Judges Judith W. Rogers, Thomas B. Griffith, and Patricia Millet comprised the panel. All three judges showed significant interest in the issues presented by Ms. English’s appeal.  Oral argument was scheduled for twenty minutes per side, but the hearing lasted over an hour.

The fundamental issue presented by the appeal is whether or not President Trump had the statutory authority under the Federal Vacancies Refom Act (the “FVRA”) to appoint Mr. Cordray’s successor.  Ms. English argued through her counsel that he lacked such power because the Dodd Frank Act specifies that the Deputy Director – i.e., Ms. English – shall serve as Acting Director in the “absence or unavailability” of the Director until a new Director has been appointed by the President and confirmed by the Senate.  The Justice Department disagreed and argued that the FVRA affords the President the power to select an Acting Director upon resignation by the Director, regardless of the language in Dodd/Frank.

The panel expressed skepticism toward both sides. The panel was skeptical as to English’s argument that the language of Dodd-Frank is sufficiently specific to justify a ruling that would supersede the FVRA.  However, the panel was also skeptical as to the arguments advanced by the Justice Department, principally because President Trump appointed Mr. Mulvaney, the current Director of the Office of Management and Budget (“OMB”).  The panel seemed sympathetic to English’s argument that having Mr. Mulvaney wear the proverbial two hats, as noted by Judge Millett, would threaten the CFPB’s status as an independent agency. In underscoring this point, English pointed to specific language in Dodd-Frank which precludes the OMB from having any oversight over the CFPB. The Justice Department argued that there is no language in Dodd-Frank which specifically precludes someone from being both the acting Director of the CFPB and the Director of OMB.

The panel appeared troubled by the prospect of issuing an injunction limiting the powers of the President under the FVRA.  The tenor of the panel’s comments suggests that such a ruling might nevertheless issue, though in a limited fashion.  If the problem identified by the panel is the specific selection of Mr. Mulvaney, rather than the more general power of the President under the FVRA to select an Acting Director after the Director of the CFPB has resigned, then any victory awarded to Ms. English would likely be short-lived.  If the panel concludes that President Trump had the power to appoint the Acting Director but erred in selecting the current OMB Director, the President could correct his error by promptly appointing another Acting Director as long as such person has been previously confirmed by the Senate for another position and is independent of the President.   Even during any brief interim after such a ruling and the President’s appointment of a new Acting Director, it is not clear that Ms. English would serve as Acting Director.  As the panel noted, there is a substantial standing question that also needs to be addressed.  As noted by Judge Griffith, Ms. English’s standing problem could mean that if she prevails on her application for an injunction, she prevents Mr. Mulvaney from functioning as Acting Director, but that does not necessarily mean that she will occupy the position. However, someone needs to be in charge of the agency during that interim period and if it is not English, who else could it be?

The panel also raised questions to both sides regarding their shared assumption that the phrase “absence or unavailability” in the relevant Dodd-Frank provision applies to a vacancy created by the CFPB Director’s resignation.  Although the Office of Legal Counsel has concluded that this phrase does apply to a vacancy resulting from a resignation, for the compelling reasons set forth in our previous blog post [], we believe the phrase should not be construed so broadly.  Both parties responded to this line of questioning by noting that they do not disagree with each other on this point.  However, the panel’s questioning indicated that the issue may not be resolved by the parties’ agreement, or by the OLC’s opinion on the matter.

If the court should conclude that Mulvaney was not lawfully appointed as acting director, what are the implications for formal actions which he has taken during his tenure?  Although it is not free of doubt, it would seem that the new acting director appointed by the President could ratify all the actions previously taken by Mulvaney. While he has made many statements about how he is changing the CFPB, he has not taken too many formal actions. One example of a formal action would be his issuance of a final prepaid accounts rule.

In short, today’s oral argument suggested the possibility that Ms. English may prevail but that any victory secured by Ms. English may very well be pyrrhic.

An audio recording of the hearing is available on the court’s website.

We will monitor the case and update our blog after the panel issues its decision.

On April 4, Georgia Attorney General Chris Carr (“AG Carr”) announced an $8.5 million settlement with a national debt collection company, resolving alleged Fair Debt Collection Practices Act (FDCPA) and the Georgia Fair Business Practices Act violations.

Specifically, AG Carr alleged that the company harassed and deceived consumers by falsely representing to consumers that they were attorneys or otherwise affiliated with government entities, that the consumers had committed a crime and could be imprisoned because of nonpayment, failed to disclose they were debt collectors, attempted to collect illegal payday loans, and divulged information to third-parties without authorization.  The settlement required the company to stop collecting on nearly 12,000 accounts, totaling over $8.5 million in consumer debt, pay a $20,000 civil penalty, and agree to comply with the FDCPA and Georgia Fair Business Practices Act.  Any subsequent failure to do so will cause the company to owe an additional $240,000 civil penalty.

While it may not surprise the collections industry to see a state Attorney General take issue with the alleged actions above, seeing this sort of settlement come out of a Republican attorney general in a solidly Republican state is slightly more interesting.  It is yet another example of significant state-level enforcement but this time, out of a state that is generally not thought of as being particularly active within the collections arena.  Coming after confirmation from the CFPB that it plans to move forward with a third-party collections rulemaking, this recent settlement demonstrates that regardless of party, federal and state regulators continue to be interested in collections and addressing perceived violations arising under both federal and state law.

Creditors currently using the London Inter-Bank Offered Rate (LIBOR) as the index for variable-rate consumer loans should note that the Federal Reserve Bank of New York is now publishing a new index named the Secured Overnight Financing Rate (SOFR).

SOFR is intended to take the place of LIBOR when LIBOR is discontinued (as the United Kingdom’s Financial Conduct Authority has indicated will occur at the end of 2021). Creditors currently using LIBOR are advised to consult with counsel as to how best to proceed.

Yesterday, Mick Mulvaney made his first appearance as CFPB Acting Director before the House Financial Services Committee to present the Bureau’s Semi-Annual Report to Congress for the period beginning April 1, 2017, and ending September 30, 2017, a period of time when Richard Cordray was still the Director.

In his message preceding the Semi-Annual Report, Acting Director Mulvaney noted the disagreements many members of Congress have with his actions as Acting Director, just as many members of Congress disagreed with Director Cordray’s actions.  His message also included legislative recommendations for changes to the CFPB to address his view that the Bureau lacks accountability to any branch of government.  Noteworthy aspects of Mr. Mulvaney’s testimony to the Committee include:

  • While committee members did not specifically engage in a discussion with Mr. Mulvaney about his recommendations, Republican committee members focused on their concerns surrounding Bureau accountability, both with respect to its spending decisions, and control over the Bureau’s Director.
  • Democratic committee members raised a host of concerns with Mr. Mulvaney’s actions as Acting Director, ranging from questioning his authority to serve as Acting Director, to his efficacy in the role while serving concurrently as the Director of the Office of Management and Budget, to his intentions leading the Bureau.  Acting Director Mulvaney continued to return to his position that one party or the other would have concerns regarding the Director depending upon who is the appointing President, and the solution is to reform the Bureau’s structure  to ensure greater oversight by Congress and the President.
  • There was a fair amount of discussion around the decline in the number of enforcement actions initiated under Acting Director Mulvaney. Democratic Representative Carolyn Maloney stated that under former Directory Cordray, the Bureau brought an average of four enforcement actions per month, while in the first five months of Acting Director Mulvaney’s tenure, no enforcement actions have been brought.  However, in response to Republican Representative Bill Huizenga’s question asking how many enforcement actions were brought under former Director Cordray in his first six months, Acting Director Mulvaney stated there were zero enforcement actions brought.  He also indicated the lack of new enforcement actions so far does not indicate a lack of action on the part of the Bureau; it is continuing to prosecute several enforcement actions and to manage over 100 investigations, some of which are in the “sue or settle” phase.  Acting Director Mulvaney did not say anything about widespread rumors that the CFPB is about to enter into a major consent order with a large bank (other than stating, to correct a committee member citing the rumors, that the Bureau had not announced any enforcement actions on Tuesday).
  • Acting Director Mulvaney indicated the Bureau is continuing to review the final Payday Loan Rule (although he was not asked any questions about the recently filed lawsuit challenging the validity of the rule). He also noted the Bureau’s request for information regarding the Bureau’s adopted regulations and encouraged members to engage with the Bureau in exploring ways to better serve their constituents.
  • When asked about current bank legislative reform, Mr. Mulvaney indicated his support for further negotiations with the Senate to incorporate additional pieces of the Financial CHOICE Act, stating “I know it’s not easy to pass a piece of bipartisan legislation anywhere, let alone in the Senate, and I think they’ve done an excellent job. I don’t think that necessarily needs to be the end of the analysis. To the extent y’all have done really good work to find ways on a bipartisan basis to improve Dodd-Frank, God bless you, and let’s see if we can’t add that to the Senate bill. If not, the Senate bill is a great fallback. But if it can get better, why wouldn’t we accept that as a really good outcome?”  At the end of the hearing, Acting Director Mulvaney reiterated with respect to reform, “I don’t think that we’re in a rush, I don’t think that we have to have a bill by the end of this week from the Senate.  I think we need to go ahead and do it right, because I don’t think you’ll get a chance to do it again for a long time.”

Click here to read Acting Director Mulvaney’s  written testimony. He appears today before the Senate Committee on Banking, Housing, and Urban Affairs.

The CFPB has issued a request for information that seeks comment on its handling of consumer complaints and inquiries.  Comments on the RFI must be received on or before 90 days after the date the RFI is published in the Federal Register, which the CFPB expects to occur on approximately April 16, 2018.

The CFPB defines consumer complaints as “submissions that express dissatisfaction with, or communicate suspicion of wrongful conduct by, an identifiable entity related to a consumer’s personal experience with a financial product or service.”  It defines “consumer inquiries” as “consumer requests for information—typically proffered by telephone—to its Office of Consumer Response about consumer financial products and services, the status of a complaint, an action taken by the Bureau, and often combinations thereof.”

The CFPB seeks feedback on all aspects of its consumer complaint and inquiry handling process, including the following:

  • Specific statutorily-permitted suggestions regarding how the CFPB currently allows consumers to submit complaints and inquiries, including whether the CFPB should require consumers to classify their submission affirmatively as a complaint or inquiry prior to submission
  • Specific statutorily-permitted suggestions regarding the CFPB’s consumer complaint process, such as whether the CFPB should add or discontinue any channels for accepting complaints or expand, limit, or maintain the ability of authorized third parties to submit complaints
  • Specific statutorily-permitted suggestions regarding the CFPB’s consumer inquiry process, such as whether the CFPB should add or discontinue any channels for accepting inquiries, develop web chat systems to support consumers’ submission of inquiries, develop a process for companies to provide timely responses to consumer inquiries sent to them by the CFPB, or publish data about consumer inquiries

The new RFI represents the twelfth and final RFI in the series of RFIs announced by Mr. Mulvaney.  The subjects of the CFPB’s first eleven RFIs and their comment deadlines are as follows:

(The initial comment deadlines for the first three RFIs listed above were extended to the dates indicated.)


We believe the CFPB’s recent RFI on the Bureau’s adopted regulations, which Acting Director Mulvaney discussed during his testimony before the House Financial Services and Senate Banking Committees, provides the prepaid industry an opportunity to persuade the Bureau to reconsider its prepaid rule that was issued in October 2016 and amended in January 2018.

As I stated during a panel discussion at the Network Branded Prepaid Card Association-American Banker Power of Prepaid Conference in Washington, DC earlier this week, this opportunity gives new life to industry officials who interpreted the Bureau’s decision to finalize the prepaid rule amendments without any significant changes to the amendments as proposed by former Director Cordray to mean that Acting Director Mulvaney would not reconsider any part of the prepaid rule.

We surmise that Acting Director Mulvaney’s finalization of the prepaid rule amendments was based on the mistaken belief that industry concerns were largely addressed by the amendments proposed in June 2017.  Because the most recent comment period was limited to the proposed amendments, we believe that Acting Director Mulvaney did not have an opportunity to consider other aspects of the prepaid rule that were not addressed by the amendments, such as the inclusion of certain digital wallets and onerous restrictions on overdraft and credit features.

Because the CFPB rulemaking resources will be prioritized and deployed in the near future, companies who want the CFPB to reconsider the prepaid rule (as it announced it plans to do with the payday and HMDA rules) should submit responses to the RFI well before the June 19, 2018 deadline.  We are working with clients and trade associations to submit responses to the various RFIs, including the RFI focusing on the adopted regulations.

Two trade groups, the Consumer Financial Service Association of America, Ltd. and the Consumer Service Alliance of Texas, have filed a lawsuit against the CFPB in a Texas federal district court challenging the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule).  The plaintiffs seek an order and judgment holding the Payday Rule unlawful and enjoining and setting aside the Payday Rule.  The case has been assigned to Judge Lee Yeakel, who was nominated by President George W. Bush in 2003.

The lawsuit appears to be a third bite at the apple in that it represents a third possible route for overturning the Payday Rule.  More specifically, the filing appears to reflect industry concern about the viability of overturning the rule through a resolution under the Congressional Review Act (CRA) or the reopening of rulemaking by the CFPB.

The complaint alleges that the Payday Rule is unlawful for the following reasons:

  • The CFPB’s structure is unconstitutional because of the President’s inability to remove the CFPB Director other than for-cause and the funding of the CFPB outside of the normal appropriations process
  • The Consumer Financial Protection Act (CFPA) unconstitutionally delegates legislative power to the CFPB by granting it “legislative authority” to prescribe rules identifying as unlawful unfair, deceptive, or abusive acts or practices and not providing “an intelligible principle” that the CFPB must follow in exercising such authority
  • The Payday Rule exceeds the CFPB’s statutory authority for reasons that include:
    • The Final Rule’s identification of unfair and abusive lending practices conflicts with the CFPA limitations on the CFPB’s authority to declare an act or practice unfair or abusive
    • The Final Rule violates the CFPB prohibition on the CFPB’s establishment of a usury limit because it “determines the legal status of certain covered loans based solely on their interest rates”
    • The CFPB does not have the authority to impose an ability-to-repay requirement on the loans covered by the Payday Rule
  • The Payday Rule is arbitrary and capricious in violation of the Administrative Procedure Act (APA) because the CFPB’s unfairness and abusive determinations “are unsupported by substantial evidence and reflect a clear error in judgment”
  • The CFPB’s cost-benefit analysis of the Payday Rule does not satisfy the requirements of the CFPA for such an analysis
  • The CFPB failed to satisfy various procedural requirements in promulgating the Payday Rule including:
    • The APA notice and comment rulemaking process because “the history of the rulemaking demonstrates that the Bureau will not consider or evaluate empirical studies or evidence that diverges from the Bureau’s pre-determined decision that payday lending and title lending are harmful and must be burdened by draconian regulations”
    • The CFPB has “reduced the elaborate rulemaking process to little more than a sham” because it “has largely allowed outside groups opposed to payday lending to drive this rulemaking, and has not adequately disclosed its reliance on these groups”
    • The CFPB failed to adequately consider the Payday Rule’s impact on small businesses as required by SBREFA
    • The CFPB failed to give adequate consideration to the “over one million comments [it received] from consumers who opposed the proposed rule”

Resolutions under the Congressional Review Act (CRA) to override the Payday Rule have been introduced in the House and Senate.  In January 2018, the CFPB announced that it intends to engage in a rulemaking process to reconsider the Payday Rule pursuant to the APA.  The Payday Rule became “effective”on January 16, 2018.  However, the compliance date for the rule’s substantive requirements and limits (Sections 1041.2 through 1041.10), compliance program/documentation requirements (Section 1041.12), and prohibition against evasion (Section 1041.13) is August 19, 2019.

It is doubtful that there are 51 votes in the Senate to pass a CRA resolution.  Adoption of a new rule through a reopened rulemaking could take too long to accomplish because of the many APA regulatory hoops that the CFPB would have to jump through.  In addition, consumer advocacy groups would likely file a lawsuit against the CFPB challenging any new rule.

Perhaps the most important question with respect to the Texas lawsuit is how the CFPB will respond.  The CFPB’s position under the Trump Administration on the constitutional issues is uncertain.  While President Trump wanted the CFPB to be held unconstitutional when Richard Cordray was Director so that he could be removed without cause, the President no longer needs such authority.  Moreover, the President might no longer want to have such authority because it would potentially enable a Democratic President to remove whoever President Trump eventually appoints as Director.

On the other hand, based on Mr. Mulvaney’s recent recommendation that the CFPA be amended to give the President more control over the Director, some observers believe that the CFPB would agree with the complaint’s allegation that the CFPB is unconstitutional.  In addition, Mr. Mulvaney’s decision to reopen the rulemaking indicates that he has grave concerns about the Payday Rule.

All in all, we believe that the CFPB will likely file an answer to the complaint stating that it agrees with most, if not all, of the complaint’s allegations.  Should that happen, the plaintiffs would be well-positioned to file a motion for judgment on the pleadings.

A motion for judgment on the pleadings is ordinarily granted when the complaint and answer, by themselves, reveal that there are no material issues of fact to be resolved and that a party is entitled to judgment as a matter of law.  However, it is unclear whether the court would be obligated to grant a motion by the plaintiffs for judgment on the pleadings or could exercise independent judgment about the legal issues raised in the lawsuit.

It also seems likely that certain consumer advocacy groups or Democratic state attorneys general will seek to intervene as defendants in order to defend the lawsuit.  The plaintiffs (and perhaps the CFPB) would likely oppose such intervention and it is premature at this point to speculate as to how the court would rule on intervention.

While it is also noteworthy that the lawsuit was filed in federal court in Texas rather than in D.C., the reason for the plaintiffs’ choice of Texas seems obvious—they needed to initiate the lawsuit in a federal circuit that has not already ruled on their constitutional challenge.  The D.C. Circuit has already concluded in PHH that the CFPB is constitutional.  The plaintiffs undoubtedly hope that the Fifth Circuit will decide the constitutional issue differently, thus creating a conflict with the D.C. Circuit that the U.S. Supreme Court would likely resolve.  Also, unlike the D.C. Circuit, the Fifth Circuit is known for being one of the more conservative circuits in the country


The CFPB has issued its Consumer Response Annual Report that provides an analysis of the approximately 320,200 complaints received by the CFPB between January 1 and December 31, 2017.  (In 2016, the CFPB received approximately 291,400 complaints.)

The report provides data on the most common types of complaints for each product and the handling of complaints.  Unlike prior annual reports, however, the new report contains no information on the median amount of monetary relief paid for different complaint types by companies that reported such amounts. (Companies have the option to report an amount of monetary relief.)

Of the 320,200 complaints received in 2017, approximately 81% were received through the CFPB’s website, 5% via telephone calls, 8% via referrals from other agencies and regulators, and the balance via mail, e-mail and fax.  Based on the CFPB’s breakdown of the number of complaints received in each category, credit reporting (100,000), debt collection (84,500), and mortgages (37,300) accounted for 69% of all 2017 complaints.

For credit reporting complaints, 55% involved incorrect information on credit reports and 20% involved the credit reporting company’s investigation.

39% of debt collection complaints involved continued attempts to collect debts not owed, 22% involved debt validation (such as not receiving enough information to verify the debt), 13% involved communication tactics, 11% involved taking or threatening illegal action, 10% involved false statements or representations, and 4% involved improper contact or sharing of information.

For mortgage complaints, 41% involved making payments (such as issues involving servicing, posting of payments, and escrow accounts), 37% involved problems relating to inability to pay (such as issues involving loan modifications, collections, or foreclosures), and 12% involved applying for a loan or refinancing an existing mortgage.

We recently blogged that the CFPB has apparently decided to put its monthly complaint reports on hold, having issued its last monthly complaint report in October 2017.