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According to numerous media sources, the White House announced on Friday, June 16, that President Trump plans to nominate Kathy Kraninger as CFPB Director later this week.

The nomination means that pursuant to the Federal Vacancies Reform Act, Mick Mulvaney can continue to serve as Acting Director while Ms. Kraninger’s nomination is pending confirmation by the Senate and, as we explain below, potentially until mid-2020 if she is not confirmed.  In the absence of a nomination by President Trump, the FVRA would not have allowed Mr. Mulvaney to continue to serve as Acting Director beyond June 22 and created the potential for his post-June 22 actions to be challenged as invalid.  (The otherwise applicable FVRA time limit on service–210 days after the date the vacancy occurs—began to run on November 25, 2017, the date former Director Cordray’s resignation became effective.)

Ms. Kraninger is currently the Program Associate Director for General Government at the Office of Management and Budget.  (In addition to serving as CFPB Acting Director, Mr. Mulvaney currently serves as OMB Director.)  At OMB, Ms. Kraninger oversees budget development for several agencies, including DOJ, HUD, and Treasury. She has been at OMB since March 2017.  She has also held positions with two Congressional committees, the House Committee on Homeland Security and the Senate Homeland Security and Governmental Affairs Committee, and has worked in two agencies, Treasury and Homeland Security.  At Homeland Security, she served as Deputy Assistant Secretary for Policy Secretary Tom Ridge during the Bush Administration. Ms. Kraninger is a 2007 graduate of Georgetown University Law Center.

Ms. Kraninger’s nomination “resets the clock” on Mr. Mulvaney’s tenure as Acting Director under the FVRA.  He can continue to serve as Acting Director until Ms. Kraninger’s nomination is withdrawn, rejected, or returned by the Senate.  Senate rules provide that a nomination that has not been acted on by the end of the session in which it was submitted is returned to the President.  (The current target date for the Senate’s adjournment is December 14.)  Under the FVRA, the withdrawal, rejection, or return of Ms. Kraninger’s nomination would allow Mr. Mulvaney to continue to serve as Acting Director for an additional 210-day period.  If a second nomination is made (which we assume would not happen before 2019), Mr. Mulvaney could continue to serve as Acting Director until the second nomination is confirmed, withdrawn, or rejected or returned by the Senate.  If the second nomination is withdrawn or rejected or returned by the Senate at the end of the 2019 session, a further 210-day period would be triggered during which Mr. Mulvaney could continue to serve as Acting Director until approximately July 2020.  (It appears that Mr. Mulvaney’s tenure as Acting Director could not be further extended by subsequent nominations.)

If confirmed as CFPB Director, Ms. Kraninger is expected to follow Mr. Mulvaney’s philosophy of not using the CFPB’s enforcement authority to “push the envelope” or to engage in “rulemaking by enforcement.”  In addition, her nomination and potential confirmation is not expected to have any impact on the CFPB’s regulatory priorities outlined in its Spring 2018 rulemaking agenda of reopening rulemaking on the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule) and proposing a debt collection rule dealing with third-party collectors.  Most significantly, by eliminating a possible challenge to the validity of actions taken by Mr. Mulvaney as Acting Director after June 22, Ms. Kraninger’s nomination allows Mr. Mulvaney to move forward (hopefully expeditiously) on staying the Payday Rule’s compliance date pursuant to the Administrative Procedure Act’s notice-and-comment procedures.  (Last week, a Texas federal court granted the stay of the lawsuit filed by two trade groups challenging the Payday Rule requested in a joint motion filed by the trade groups and the CFPB but denied the stay of the Payday Rule’s August 19, 2019 compliance date also requested in the joint motion.)

The continuing “wildcard” for Ms. Kraninger’s nomination and Mr. Mulvaney’s tenure as Acting Director is the possibility of a decision from the D.C. Circuit adverse to Mr. Mulvaney in Leandra English’s appeal challenging Mr. Mulvaney’s appointment as Acting Director.  One possible outcome is that the D.C. Circuit could find that Ms. English is entitled to serve as Acting Director pursuant to the Dodd-Frank Act (DFA) provision that provides the Deputy Director shall serve as Acting Director in the Director’s “absence or unavailability” and that the DFA provision supersedes the President’s FVRA authority.  It is unclear whether the DFA provision that only allows the President to remove the CFPB Director “for cause” would similarly limit the President’s removal of an Acting Director.  (Mr. Mulvaney has asserted on various occasions that President Trump can remove him without cause.)

A second possible outcome is that the D.C. Circuit could find that Ms. English is not entitled to serve as Acting Director pursuant to the DFA because “absence or unavailability” does not include a vacancy created by a resignation and, although the President can use his FVRA authority to appoint an Acting Director, his appointment of Mr. Mulvaney is invalid because Mr. Mulvaney cannot simultaneously serve as OMB Director and CFPB Acting Director.  The 210-day time limitation established by Section 3346(a)(1) of the FVRA on an acting officer’s tenure runs from “the date the vacancy occurs.”  While a permanent officer’s nomination can extend the tenure of an existing acting officer beyond 210 days, it appears that the President cannot use the FVRA to appoint another person as acting officer after the 210-day period expires.  Thus, assuming that after June 22 President Trump could not use the FVRA to appoint someone else to serve as Acting Director, the CFPB would remain without an Acting Director until a nominee is confirmed by the Senate.  (Ms. English, unless removed by President Trump, would continue to serve as Deputy Director but could not exercise the authority of the Director.  As noted above, while the DFA only allows the President to remove the CFPB Director “for cause,” it does not speak directly to the Deputy Director’s removal.)

It is important to also note that once a new Director appointed by President Trump is confirmed, he or she will be entitled to serve for a full five-year term regardless of how long Mr. Mulvaney has served as Acting Director.  As a result, if Mr. Mulvaney were to serve as Acting Director for as long as possible (i.e. until mid-2020), even if a Democrat is elected President in 2020, a new Director appointed by President Trump and sworn-in in mid-2020 could potentially serve until mid-2025.

Such a possible scenario underscores the need for Congress to enact legislation to change the CFPB’s leadership structure to a five-member commission, something industry has previously urged lawmakers to do.  While we are pleased with the direction in which Mr. Mulvaney has moved the CFPB, regardless of whether the President is a Republican or a Democratic, in our opinion, it is better policy and will provide more stability for the Bureau to be led by a group of people with diverse viewpoints rather than a single individual tied to the President’s political agenda.

 

A group of 15 Democratic state attorneys general have submitted a letter responding to the CFPB’s request for information seeking comment on potential changes to the CFPB’s practices for the public reporting of consumer complaint information.  (Last month, a group of 35 Democratic U.S. Senators sent a letter to Mick Mulvaney and Leandra English urging the CFPB to continue to publicly disclose consumer complaint information.)

In their letter, the AGs indicate that since December 2012, state agencies have had access not only to the public-facing database but also to a secure portal that allows them to view information the general public cannot (such as complaint narratives which were not publicly disclosed until June 2015.)

The AGs state that the complaint database “has been an invaluable resource for identifying trends and patterns.”  They indicate that they “have used information gleaned from the CFPB’s database in connection with investigations into debt collection companies, student loan servicers, for-profit universities, and other companies whose misconduct was initially brought to our attention through a critical mass of complaints filed with the CFPB.”

The AGs also assert that in addition to being an invaluable resource in their investigations, the database “has proven useful to consumers at large.”  According to the AGs, the database:

  • Empowers consumers to educate themselves about financial decisions, options in the marketplace, and how to avoid bad actors
  • Because of its visibility, incentivizes companies to treat their customers fairly
  • Reveals patterns of widespread misconduct that “the CFPB and its state counterparts can use…to analyze the issue and determine what steps, if any, to take”
  • Represents “a commitment by the CFPB to honor not only the letter but the spirit of its statutory mandate to bring more transparency to consumer financial transactions by, inter alia, ensuring that corporate misconduct will not be shielded from view

The AGs close their lender by commenting that while they are submitting their letter with the expectation that the CFPB “will carefully weigh the comments it receives,” there have been press reports suggesting that the CFPB has already decided to end public disclosure of complaint data and that, if such reports are accurate, they suggest the RFI “is meant to paper over a decision already made.”  (The AGs specifically reference reports indicating that at an April 2018 American Bankers Association conference, CFPB Acting Director Mulvaney strongly criticized the CFPB’s policy of publicly disclosing consumer complaint information and suggested that the policy is likely to be discontinued.)

 

The CFPB has published a post blog indicating that it plans to reconstitute three of its advisory groups: the Consumer Advisory Board (CAB), the Community Bank Advisory Council (CBAC), and the Credit Union Advisory Council (CUAC).

The blog post’s publication followed an eruption of controversy over the CFPB’s cancellation of a CAB meeting scheduled for today and tomorrow as well as media reports that the blog post’s author, Anthony Welcher, CFPB Policy Associate Director for External Affairs, had informed CAB members in a conference call today that their terms were terminated and they were not permitted to reapply for membership.  (CAB members have generally been appointed for a 3-year term.)

The series of RFIs issued by the CFPB included an RFI seeking comment on its public and non-public external engagements, including meetings of the CFPB’s advisory groups.  Comments on the RFI were due by May 29, 2018.  In its blog post, the CFPB states that “this week the Bureau begins the process of transforming the Bureau’s Stakeholder Outreach and Engagement work, which includes transitioning from former modes of outreach to a new strategy to increase high quality feedback.”  It also states that the comments it received in response to the RFI “informed our shift to expand external engagements and modify our Advisory Board and Councils to be one focused tool in the evaluative process.”

Section 1014 of Dodd-Frank required the CFPB to establish the CAB and provides that the CAB “shall meet from time to time at the call of the Director, but, at a minimum, shall meet at least twice in each year.”  Dodd-Frank did not require the CFPB to establish either the CBAC or CUAC.  Both Councils were established by the CFPB in the exercise of the Director’s discretion pursuant to his executive and administrative authority under Dodd-Frank Section 1012.

The CFPB’s blog post states that it “will continue to fulfill its statutory obligations to convene the [CAB] and will continue to provide forums for the [CBAC] and the [CUAC].”  It further states that the Bureau “will continue these advisory groups and will use the current 2018 application and selection process to reconstitute the current advisory groups with new, smaller memberships.”  (The CFPB’s statement that it plans to reconstitute all three groups indicates that it has also terminated or plans to terminate the terms of current CBAC and CUAC members.)

The blog post further indicates that the CFPB plans to “increase its strategic outreach to encourage in-depth conversations, sharing information, and developing partnerships focused on consumers in underserved communities and geographies. These engagements will include regional town halls, roundtable discussions at the Bureau’s headquarters with consumer finance experts and representatives, regional roundtables, and regular national calls.”  In the blog post, the CFPB announces that on June 8, 2018, in Topeka, Kansas, the CFPB will co-host a town hall, “Fighting Elder Financial Exploitation in your Community,” with the Kansas Attorney General, to “recognize effective state and local efforts addressing elder exploitation generally and elder financial exploitation.”

The CFPB’s cancellation of the CAB meeting that was scheduled for today and tomorrow provoked criticism from CAB members.  The CFPB had previously cancelled the CAB’s February 2018 scheduled meeting.  In a letter to Acting Director Mulvaney signed by the CAB’s Chair and Vice Chair as well as 13 of the CAB’s 23 other members, CAB members stated that the cancellation “raises significant issues regarding compliance with legal obligations related to the CAB and CAB service.”  They cited to Dodd-Frank Section 1014(a) which requires the CAB to convene twice a year to “advise and consult with the Bureau in the exercise of its functions under the Federal consumer financial laws and to provide information on emerging practices in the consumer financial products and services industry, including regional trends, concerns and other relevant information.”  Calling the cancellation “a troubling sign,” the members state that they “are extremely concerned that our collective input is not valued.”

In a letter responding to the members’ letter, Mr. Mulvaney stated that he “can assure [them] that there is no cause for concern” and that the CAB “will meet at my call (or at the call of a newly confirmed Director) at least twice this calendar year, in fulfillment of the Bureau’s legal obligations.”  Under former Director Cordray, the CAB held three meetings each year.  As noted above, Section 1014 of Dodd-Frank requires only two CAB meetings per year.  Acting Director Mulvaney’s response is consistent  with his general practice of adhering to what Dodd-Frank requires rather than following the expansive approach to the CFPB’s exercise of its authorities that prevailed under former Director Cordray.

 

 

The end of the 210-day period during which Mick Mulvaney can serve as CFPB Acting Director under the Federal Vacancies Reform Act (FVRA) in the absence of President Trump’s nomination of a permanent Director is drawing dangerously closer.  Former Director Cordray’s resignation became effective at midnight on November 24, 2017, thereby making November 25 the first day on which the position of CFPB Director was vacant.  President Trump’s appointment of Mick Mulvaney as CFPB Acting Director also became effective on November 25 upon Mr. Cordray’s resignation.  Accordingly, including today, the position of CFPB Director will have been vacant for 194 days, making June 22 the last day of the 210-day period.

FVRA Section 3346(a)  provides:

Except in the case of a vacancy caused by sickness, the person serving as an acting officer as described under section 3345 may serve in the office—(1)  for no longer than 210 days beginning on the date the vacancy occurs; or (2) subject to subsection (b) [which addresses a rejected, withdrawn or returned nomination], once a first or second nomination for the office is submitted to the Senate, from the date of such nomination for the period that the nomination is pending in the Senate.

As an initial matter, it appears that President Trump could not use the FVRA to appoint another Acting Director once the 210-day period has expired.  According to a Congressional Research Service report, because the 210-day time limitation established by Section 3346(a)(1) runs from “the date the vacancy occurs,” the limitation is tied to the vacancy itself, rather than to any person serving in the office.

The absence of a nominee for permanent Director by June 22 could be problematic in several respects.  First, the expiration of the 210-day period could strengthen Leandra English’s claim that she is entitled to be the Acting Director under the Dodd-Frank Act (DFA) provision that provides that the Deputy Director shall serve as Acting Director in the Director’s “absence or unavailability.”

At the April 12 oral argument in the D.C. Circuit on Ms. English’s appeal from the district court’s denial of her preliminary injunction motion, the DOJ indicated that it did not dispute Ms. English’s position that “absence or unavailability” includes a vacancy created by a resignation.  In asserting that Mr. Mulvaney is the rightful Acting Director, the DOJ has relied on the argument that the President can use his FVRA authority as an alternative to the DFA provision.  Since it appears the President could not use the FVRA to replace Mr. Mulvaney as Acting Director after the 210-day period expires, Ms. English could argue that she is entitled to be Acting Director because the President’s FVRA authority is no longer available.

To avoid this possibility, Mr. Mulvaney might attempt to remove Ms. English prior to June 22.  While the DFA allows the President to only remove the CFPB Director “for cause,” it does not speak directly to the Deputy Director’s removal.  Since the Director appoints the Deputy Director, presumably the Director could remove the Deputy Director  for any reason.  It is unclear, however, whether Mr. Mulvaney, as Acting Director, would also have that authority.

It is also unclear whether Mr. Mulvaney could appoint a new Deputy Director if he were able to remove Ms. English and whether a new Deputy Director appointed by Mr. Mulvaney would become Acting Director at the end of the 210-day period.  Another open question is whether President Trump could remove Ms. English without cause should she become Acting Director.  (Mr. Mulvaney has asserted on various occasions that President Trump can remove him without cause.)

Second, subject to our comment below, under the FVRA, any action taken by Mr. Mulvaney as Acting Director after 210 days would be void and could not be ratified.  Section 3348(d)(1) provides that “an action taken by any person who [is not acting in compliance with the FVRA] in the performance of any function or duty of a vacant office . . . shall have no force or effect.”  Section 3348(d)(2) provides that “an action that has no force or effect under paragraph (1) may not be ratified.”

We note that in a 1999 opinion, the Office of Legal Counsel indicated that once a nomination is made, even if after the 210-day period has expired, the Acting Director can resume the exercise of his authority.  The opinion describes FVRA Section 3346(a)(2) as containing a “spring-back provision, which permits an acting officer to begin performing the functions and duties of the vacant office again upon the submission of a nomination.”

Of course, Ms. English’s lawsuit continues to be the “wildcard” in any potential scenario.  A ruling in favor of Ms. English would not only be problematic for Mr. Mulvaney’s continued tenure as Acting Director but could also call into question the validity of any actions he has taken as Acting Director.

We are hopeful that President Trump will soon nominate a permanent Director, thereby eliminating these concerns and allowing Mr. Mulvaney to continue to serve as Acting Director pursuant to the FVRA pending confirmation of the President’s nominee.

On June 6, 2018, the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit will hold a hearing entitled “Improving Transparency and Accountability at the Bureau of Consumer Financial Protection.”

The members of the panel of witnesses will be :

  • Steven G. Day, President, American Land Title Association
  • Richard Hunt, President and CEO, Consumer Bankers Association
  • Kate (Larson) Prochaska, Director, The Chamber of Commerce
  • Elmer K. Whitaker, Chief Executive Officer, Whitaker Bank Corporation of Kentucky

The Committee Memorandum states that the hearing will discuss the recommendations for legislative changes to the CFPB made by Acting Director Mick Mulvaney in the CFPB’s Semi-Annual Report issued in April 2018 as well as “other reforms that would promote greater transparency and accountability at the Bureau.”  (We note that Whitaker Bank’s inclusion as a witness is surprising since, based on its publicly available financial statements, its total assets appear to be substantially below the $10 billion threshold for a bank to be subject to the CFPB’s supervision or enforcement authority.)

 

This afternoon, President Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) into law.  The Act was passed by the House on Tuesday by a vote of 258 to 159 and by the Senate on March 14 by a vote of 67 to 31.

Although the Act does not make the sweeping changes to the Dodd-Frank Act contemplated by other proposals, it nevertheless provides welcome regulatory relief to both smaller and larger financial institutions.  After President Trump signed the Act, CFPB Acting Director Mick Mulvaney issued a statement applauding Congress for passing the Act and indicating that he is “pleased to see the long-overdue reforms to the regulations governing mortgage lending.”  Mr. Mulvaney also stated that he “stand[s] ready to work with Congress and the rest of the Administration to implement these new reforms that will promote a brighter, more prosperous future.”

On June 19, 2018, from 12 p.m. to 1 p.m. ET, Ballard Spahr attorneys will hold a webinar—Economic Growth, Regulatory Relief, and Consumer Protection Act: Anatomy of the New Banking Statute.  The webinar registration form is available here.

In addition to the changes regarding mortgage lending, the Act makes a number of changes to provisions of federal laws regarding credit reporting, and loans to veterans and students.  It also reduces the regulatory burdens on financial institutions—particularly financial institutions with total assets of less than $10 billion.  Bank holding companies with up to $3 billion in total assets would be permitted to comply with less-restrictive debt-to-equity limitations instead of consolidated capital requirements.  This change should promote growth by smaller bank holding companies, organically or by acquisition.  Larger institutions should benefit from the higher asset thresholds that would apply to systemically important banks subject to enhanced prudential standards.  The higher thresholds may lead to increased merger activity between and among regional and super regional banks.

For a summary of some of the Act’s key provisions applicable to financial institutions, click here for our full alert.

 

 

A group of 35 Democratic Senators have sent a letter to Mick Mulvaney and Leandra English urging the CFPB to continue to publicly disclose consumer complaint information.

In remarks last month at an American Bankers Association conference, CFPB Acting Director Mick Mulvaney is reported to have strongly criticized the CFPB’s policy of publicly disclosing consumer complaint information and suggested that the policy is likely to be discontinued.  Mr. Mulvaney is reported to have said that while the CFPB will maintain the consumer complaint database as required by Dodd-Frank, he did not see any legal requirement for the CFPB “to run a Yelp for financial services sponsored by the federal government.”

In their letter, the Senators assert that consumers would be hurt by the elimination of public access to the database.  They ask the CFPB to provide, if a decision is made to end public access, “an explanation of any proposed changes, a detailed accounting of your justification, and a copy of any analysis you undertook in support of your decision.”

The CFPB has issued a request for information that seeks comment on potential changes to its practices for the public reporting of consumer complaint information.  Comments on the RFI are due by June 4.

 

Neither PHH Corporation nor the CFPB has filed a petition for certiorari asking the U.S. Supreme Court to review the D.C. Circuit’s en banc PHH decision.  The filing deadline was May 1.

In that decision, which was issued on January 31, the D.C. Circuit ruled in favor of PHH on its challenge to the CFPB’s RESPA interpretation but rejected PHH’s challenge to the CFPB’s constitutionality based on its single-director-removable-only-for-cause structure.

While the decisions of the CFPB and PHH not to seek certiorari means the PHH case will not be the vehicle for a Supreme Court ruling on the CFPB’s constitutionality, other pending cases could provide such a vehicle.  Among such cases is CFPB v. All American Check Cashing, in which the Fifth Circuit recently agreed to hear an interlocutory appeal challenging the CFPB’s constitutionality.

 

A group of 16 Democratic state attorneys general have sent a letter to the CFPB in response to its Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes.

The AGs express their opposition to any curtailment of the Bureau’s investigatory authority because “it would significantly hinder the Bureau’s ability to fulfill its mandate of promoting fairness, transparency, and competitiveness in the markets for financial products and services.”  According to the AGs, judicial supervision of the Bureau’s investigatory authority “ensure[s] that the Bureau does not overstep its bounds in exercising its civil investigative demand authority.”  They also assert that the CFPB has used its investigative authority “responsibly and effectively.”

Perhaps the most notable aspect of the AGs’ letter is its discussion of the investigative powers available to state AGs, with the authority of various of the AGs who signed the letter used as examples.  The AGs who signed the letter, which include the New York and Pennsylvania AGs, can be expected to use their extensive investigative powers and pursue an aggressive enforcement agenda in support of efforts to fill any void created by a less aggressive CFPB under the Trump Administration.

State AGs and regulators have direct enforcement authority under various federal consumer protection statutes and, pursuant to Section 1042 of the Consumer Financial Protection Act, can bring civil actions to enforce the provisions of the CFPA, most notably its prohibition of unfair, deceptive or abusive acts or practices.

Ballard Spahr attorneys submitted comments to the CFPB in response to its RFI on the CID process in which we urge the CFPB to make significant changes to the current process to address the lack of basic procedural safeguards and help alleviate the unreasonable burdens that the current process imposes on CID recipients.

 

The CFPB (referring to itself as the Bureau of Consumer Financial Protection) has filed what appears to be its first amicus brief since former Director Cordray’s departure.

The amicus brief was filed in Lavallee v. Med-1 Solutions, LLC, an appeal to the U.S. Court of Appeals for the Seventh Circuit in which the issue before the court is whether the defendant sent the plaintiff a written validation notice containing the disclosures required by the FDCPA in 15 U.S.C. Section 1692g(a).  The defendant claimed that it satisfied the FDCPA requirement when it sent the plaintiff two emails relating to two medical debts that each included a link to a webpage on which the plaintiff could open a “secure package” that would then take the plaintiff to another webpage on which she could open (or save to her computer) the validation notice which was in electronic Portable Document Format (PDF).  There was undisputed evidence that the plaintiff never viewed or accessed either of the two secure packages containing the validation notices for her two medical debts.

The district court granted summary judgment to the plaintiff, finding that the defendant had violated Section 1692g(a) because it had not “sent” validation notices to the plaintiff.  The court stated that if a notice “is not sent in a manner in which receipt should be presumed as a matter of logic and common experience, then it cannot be considered to have been ‘sent.'”  The district court also questioned whether in light of the frequent warnings consumers receive that email attachments can contain viruses, the use of a click-through attachment was a method likely to accomplish a consumer’s receipt of a validation notice.  In addition, it found no evidence that that plaintiff had given her email address to the defendant or anticipated it would have her address.

In its amicus brief, which was filed in support of the plaintiff/appellee, the Bureau argues that if the Seventh Circuit reaches the question of whether the validation notices purportedly sent to the plaintiff complied with the “written notice” requirement of Section 1692g(a), the court’s analysis should address the applicability of the E-SIGN Act.  The E-SIGN Act applies to any statute that “requires that information relating to a transaction or transactions in or affecting interstate or foreign commerce be provided or made available to a consumer in writing.”  It allows “the use of an electronic record” to satisfy a written notice requirement if the consumer has given prior, informed consent to receiving electronic notices in lieu of paper, and if the Act’s other conditions are satisfied.

The Bureau argues that, for purposes of the E-SIGN Act, a debt collector’s actions in collecting consumer debt involves a “transaction” and the FDCPA’s validation notice requirement is a requirement for information to be provided “in writing.”  Thus, according to the Bureau, because the E-SIGN Act’s requirements serve “as an overlay on other laws,” the Seventh Circuit cannot assess the defendant’s argument that it provided a written notice under Section 1692g(a) without determining whether such requirements were satisfied.  The Bureau observes that the summary judgment record before the district court contained no evidence that the E-SIGN Act’s requirements were satisfied and suggested that the defendant had not complied with the Act.

In its amicus brief, the Bureau notes that the topics addressed in the advance notice of proposed rulemaking regarding debt collection that it published in November 2013 included the electronic delivery of validation notices and requested information about collectors’ current practices and experience with the “consent regime under the E-Sign Act…for electronic delivery of validation notices.”  The Bureau states that “the next step in the rulemaking-issuance of a  proposed rulemaking—is currently being considered by the Bureau.”  It also notes the authority that the E-SIGN Act grants to federal regulatory agencies to “exempt without condition a specified category or type of record from the requirements relating to consent” and comments that “any policy concerns related to the application of the E-SIGN Act to validation notices are more appropriately addressed through the exercise of that statutory authority.”

ACA International submitted an amicus brief in support of the defendant/appellant in which it urges the Seventh Circuit to reverse the district court and thereby provide guidance “which would establish that email can be ‘written notice” within [Section 1692g(a)’s] meaning, and that the [FDCPA] applies to email in the same way that it applies to postal mail.”  ACA also observes in its brief that if the Seventh Circuit affirms the district court, the district court’s approach “raises several questions about which guidance from this Court would be very helpful to the credit and collection industry” and lists such questions.