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A California appellate court has ruled that bail bond premium financing agreements are consumer credit contracts for which cosigners must be given a statutorily prescribed notice that warns of the potential consequences of acting as a cosigner.

In BBBB Bonding Corporation v. Caldwell, Kiara Caldwell, to bail a friend out of jail, signed an “Unpaid Premium Agreement” (Premium Agreement) in which she became legally responsible for the bail bond premium of $5,000, representing 10% of her friend’s bail. … Continue Reading

The CFPB has filed its brief with the Fifth Circuit in the appeal filed by the trade groups challenging the payment provisions in the CFPB’s 2017 final payday/auto title/high-rate installment loan rule (2017 Rule).  The trade groups have appealed from the district court’s final judgment granting the CFPB’s summary judgment motion and staying the compliance date for the payment provisions until 286 days after August 31, 2021 (which would have been until June 13, 2022). … Continue Reading

The California Department of Financial Protection and Innovation (DFPI) has published a notice on its website concerning delays that debt collectors and buyers seeking to comply with the new licensing requirement in the state’s Debt Collection Licensing Act are currently experiencing.

The new law, passed in September 2020, requires debt collectors and buyers to apply for a DFPI license by December 31, 2021. … Continue Reading

The CFPB recently announced the terms of a stipulated judgment and order in its lawsuit filed in November 2016 against (1) Access Funding, LLC (Access), a limited liability company that purchases structured settlements from consumers and two related companies (Access); (3) three individual principals of Access; and (4) an attorney who purported to provide advisory services to consumers who sold structured settlements to Access.  … Continue Reading

In their June 2021 request for information regarding financial institutions’ use of artificial intelligence (AI), including machine learning, the CFPB and federal banking regulators flagged fair lending concerns as one of the risks arising from the growing use of AI by financial institutions.

Last week, in an apparent effort to increase its scrutiny of machine learning models and those that use alternative data, the CFPB published a blog post titled “CFPB Calls Tech Workers to Action,” in which it made a direct appeal to “engineers, data scientists and others who have detailed knowledge of the algorithms and technologies used by companies and who know of potential discrimination or other misconduct within the CFPB’s authority to report it to us.”… Continue Reading

Last week, the California Department of Financial Protection and Innovation (DFPI) announced that it had entered into a consent order with Wheels Financial Group, LLC d/b/a LoanMart, a California-based company that markets and services automobile title loans.  LoanMart was the subject of an investigation launched in September 2020 in which the DFPI (then still named the Department of Business Oversight) was investigating whether LoanMart, through its partnership with a Utah bank, was evading the interest rate cap in the Fair Access to Credit Act (FACA). … Continue Reading

The Delaware federal district court, in CFPB v. National Collegiate Master Student Loan Trust et al., has rejected the Trusts’ argument that because the enforcement action was filed by an unconstitutionally structured CFPB, it was void when filed and could not stop the statute of limitations from running.

The CFPB first filed the enforcement action in 2017, alleging that the Trusts engaged in unlawful debt collection practices. … Continue Reading

The FTC has announced that it plans to move forward on an ambitious rulemaking agenda.  In contrast to the CFPB’s Fall 2021 rulemaking agenda which offered no meaningful insights into the Bureau’s rulemaking plans in many key areas, the FTC has provided a clear indication of the direction it intends to take in 2022.… Continue Reading

At the end of last week, the CFPB sent orders to five companies that offer buy-now-pay-later (BNPL) products directing them to provide information to the Bureau.  The orders were issued as market monitoring orders under the Dodd-Frank Act, which directs the Bureau to monitor for risks to consumers in the offering or provision of consumer financial products or services and authorizes the Bureau to require covered persons and service providers to provide information needed to perform such monitoring.… Continue Reading