On July 30, 2024, Heights Finance Holding Co. f/k/a Southern Management Corporation and a group of its wholly-owned, state-licensed subsidiaries (collectively, “Southern”) filed a motion for judgment on the pleadings (the “JOP Motion”) in the lawsuit filed by the CFPB against Southern in South Carolina federal district court. That lawsuit alleges that Southern violated the Consumer Financial Protection Act’s (“CFPA’s) prohibition on UDAAPs by “churning payment-stressed borrowers in fee-laden refinances.”… Continue Reading

On August 8, 2024, the CFPB filed its Appellant Brief with the Fifth Circuit, appealing the September 2023 decision by the Federal District Court for the Eastern District of Texas that vacated the March 2022 changes to the CFPB’s unfair, deceptive or abusive acts or practices (UDAAP) Exam Manual. In the 2022 amendments to the Exam Manual, the CFPB purported to use the unfair prong of UDAAP under the Consumer Financial Protection Act (CFPA) to prohibit discriminatory conduct, whether or not it is covered by fair lending laws.… Continue Reading

On August 12, 2024, the plaintiffs filed their brief in opposition to the CFPB’s motion to dismiss Plaintiff Fort Worth Chamber of Commerce (Fort Worth Chamber) for lack of standing and if granted, transfer the case to the Federal District Court for D.C. in the lawsuit challenging the CFPB’s credit card late fee final rule (“Rule”).… Continue Reading

Career Step LLC, an online career training company has been ordered to pay $43.5 million in cash and debt cancellation to resolve FTC charges that the company “lured consumers, specifically servicemembers and their families, with deceptive ads that falsely touted inflated employment outcomes, job placement, and partnerships with prominent companies.”

The company will cancel $27.8 million in debt and pay $15.7 million to provide redress to consumers harmed by its deceptive advertising.… Continue Reading

Many financial services providers would be required to allow consumers seeking assistance to be connected to a “real person” by clicking on one button, under a new Biden Administration “Time is Money” initiative.

“Companies often deliberately design their business processes to be time-consuming or otherwise burdensome for consumers, in order to deter them from getting a rebate or refund they are due or canceling a subscription or membership they no longer want—all with the goal of maximizing profits,” the administration said in a fact sheet.… Continue Reading

Very soon, briefing by the parties in the 10th Circuit will commence with respect to Colorado’s appeal of a preliminary injunction entered by the Federal District Court for the District of Colorado. The District Court enjoined the Colorado Attorney General and UCCC Administrator from applying to out-of-state, state banks making loans to Colorado residents its (1) recently enacted statute opting out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (the “DIDMCA”) (conferring on state-chartered, FDIC-insured banks the same right to export interest rates as Section 85 of the National Bank Act) pursuant to Section 525 of the DIDMCA and (2) Colorado’s usury laws.… Continue Reading

On August 7, 2024, the U.S. District Court for the Eastern District of Kentucky granted the CFPB’s motion to stay the small business lending rule litigation before the court until resolution of the similar case pending in the Southern District of Texas.

In 2023, a group of Kentucky banks and the Kentucky Bankers Association brought suit against the CFPB challenging the Small Business Lending Rule, which amends Regulation B and creates data collection and reporting requirements pertaining to credit extended to small businesses.… Continue Reading

CarShield, a company that sells vehicle service contracts (VSCs), will pay $10 million to settle FTC allegations that its advertisements and telemarketing pitches deceived consumers, the agency announced on July 31.

The money will be used to provide refunds to consumers who were defrauded.

The stipulated complaint filed by the FTC stated that American Auto Shield (AAS) has designed, provided and administered VSCs through CarSheld; it said that between September 2019 and November 2022, CarShield sold VSCs solely on behalf of AAS and has earned commissions of about $600 million.… Continue Reading

The plaintiffs challenging the CFPB payday lending rule should not be entitled to an en banc rehearing because the issues they cite already have become final and the time for rehearing has lapsed, the CFPB said last week responding to a request for such a rehearing. The rule prohibits lenders from continuing to attempt to withdraw money from a borrower’s account after two prior attempts failed for lack of sufficient funds, unless the lender obtains new authorization from the borrower.… Continue Reading

On August 8, 2024, the plaintiffs filed their brief in opposition to the CFPB’s motion to dissolve the preliminary injunction in the lawsuit challenging the CFPB’s credit card late fee final rule (“Rule”). In their brief, the plaintiffs renew their arguments that the CFPB exceeded its authority under Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and the Truth in Lending Act (TILA) in promulgating the Rule.… Continue Reading