With the return to repayment of federal student loans on February 1, 2022 quickly approaching, the Department of Education’s Office of Federal Student Aid (FSA) recently notified the private collection agencies (PCAs) under contract with FSA to collect Direct Loans that it would begin the process of recalling approximately 5.1 million borrower accounts and winding down the PCAs’ contracts. … Continue Reading

In the latest demonstration that there’s a “new CFPB” as well as other new regulatory sheriffs in town, the CFPB, the federal banking agencies (OCC, FDIC, Federal Reserve Board, and NCUA), and state financial regulators issued a joint statement yesterday to announce that they will no longer provide “supervisory and enforcement flexibility” to mortgage servicers in meeting compliance requirements. … Continue Reading

Targeted advertising has become an important marketing tool for many providers of consumer financial services.  After discussing the primary screening methods offered to providers for identifying consumers to receive their advertising, we look at claims made in private lawsuits involving the intersection of targeted marketing and anti-discrimination laws and how the courts have responded to such claims, the status of regulatory activity, whether advertisers using targeted marketing are vulnerable to redlining claims, and issues for providers to consider before engaging in targeted marketing.… Continue Reading

On October 29, the New York Department of Financial Services issued proposed amendments to 23 NYCRR 1, its regulation titled “Debt Collection by Third-Party Debt Collectors and Debt Buyers.”  The proposed amendments would make significant changes to the sections of the current regulation dealing with initial disclosure requirements, statute of limitations disclosures, substantiation requirements, and telephone and electronic communications. … Continue Reading

The CFPB Education Loan Ombudsman has issued his annual report covering the period  from September 1, 2020 through August 31, 2021.

The report includes an analysis of the approximately 5,300 complaints related to private or federal student loans that the Bureau received during that period.  While complaints overall during this period trended lower, the decrease was most pronounced for federal student loan complaints which decreased approximately 32% compared to the prior year.… Continue Reading

At the end of last month, the CFPB sent orders to six large technology platforms offering payment services that directs them to provide information to the Bureau about their payments products and services and their collection and use of personal payments data.

On November 5, 2021, the CFPB published a notice in the Federal Register seeking public comments to inform its inquiry. … Continue Reading

The California Department of Financial Protection and Innovation has published a fourth round of modifications to implement SB 1235, the bill signed into law on September 30, 2018 that requires consumer-like disclosures to be made for certain commercial financing products, including small business loans and merchant cash advances.  The law contains exemptions and carve-outs for, among other things, depository institutions, financings of more than $500,000, closed-end loans with a principal amount of less than $5,000, and transactions secured by real property. … Continue Reading

The CFPB has issued an advisory opinion that affirms that the use of “name-only matching” by consumer reporting agencies, including tenant and employment screening companies, does not satisfy the FCRA requirement for a CRA ”to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the [consumer] report relates.”  … Continue Reading

The CFPB recently published a new report, “Disputes on Consumer Credit Reports.”  Using data on auto loan, student loan, general purpose credit card, and retail card accounts opened between 2012 and 2019, the report looks at the demographic characteristics of disputers and the outcomes for accounts with dispute flags. … Continue Reading

In Part II of this two-part podcast, we continue our examination of the CFPB’s proposed rule implementing Sec. 1071 of the Dodd-Frank Act which would impose significant new data collection and reporting requirements on lenders in connection with credit applications made by small businesses, including women- or minority-owned small businesses.  We discuss the “firewall provision” restricting employee access to data, the proposal’s intersection with HMDA reporting requirements, the likely timeline for issuance of a final rule and compliance deadlines, the outlook for CFPB supervision and enforcement of the final rule, operational considerations in preparing for implementation, and fair lending risk management implications and mitigants.… Continue Reading