Governor Cuomo Mandates Compliance by Credit Reporting Agencies with Sweeping New Cybersecurity Requirements

New York Governor Andrew Cuomo has issued a final regulation that requires credit reporting agencies doing business in New York to register annually with the Department of Financial Services (DFS) and also to comply with accompanying cybersecurity regulations, including the implementation of a cybersecurity program consistent with the requirements already in place for banks, insurance companies and other financial services institutions. The purpose of the new regulation is to protect New Yorkers from data breaches, such as the Equifax breach which exposed the private data of millions of individuals. More ›

Is CFPB's Constitutionality Headed for the U.S. Supreme Court?

At the close of a 108 page decision filed in response to motions to dismiss a CFPB enforcement action, Consumer Financial Protection Bureau v. RD Legal Funding, LLC, C.A. No. 17-cv-890, Judge Loretta Preska of the U.S. District for the Southern District of New York (within Second Circuit jurisdiction) granted the motions by concluding the CFPB's structure was unconstitutional. This is significant because the D.C. Circuit had determined en banc earlier this year that the CFPB was constitutional in PHH Corp. v. CFPB. More ›

Mortgage Creditors Confront Five Year Extension of Mandatory Pre-Foreclosure Mediation Process in Rhode Island

The Rhode Island Senate recently approved a five-year extension of R.I. Gen. Laws § 34-27-3.2, which had established a mandatory mediation program any out-of-state mortgagee must follow before initiating foreclosure on owner-occupied, residential property. The current law is set to expire on July 1, 2018. If approved by the House, Senate Bill 2270 will extend the expiration date to July 1, 2023. Companion legislation, House Bill 7385, which sought to repeal the sunset clause thereby removing rather than extending the expiration date, has stalled. Rhode Island Banking Regulation 5, which clarifies mortgagees' duties under § 34-27-3.2 and the consequences of a mortgagee's failure to comply with the law and regulation, would likewise cease if the law expires. More ›

Congress Waters Down Dodd-Frank for Small and Regional Banks, Updates Consumer Protections

After much anticipation, Senate bill 2155—which rolls back major aspects of the Dodd-Frank law—was approved by Congress and was signed into law by President Trump.

Among the most notable changes, the legislation waters down regulations for small and regional banks. The threshold for banks "too big to fail" will be raised from $50 billion in assets to $250 billion, so that fewer than ten major U.S. banks will now be subject to Dodd-Frank's strictest regulations, including the Federal Reserve's stress test.

While the bill is widely regarded as regulatory roll back, the legislation also updates certain consumer protections, mostly regarding credit reports and student loans. More ›

Credit Card Holder has Remedies under the TILA and FCBA against Issuer due to unauthorized use of Credit Card according to Third Circuit

In Krieger v. Bank of America, the plaintiff unknowingly gave a scammer access to his personal computer, which was used to make a $657 Western Union charge on his Bank of America (BOA) credit card. Upon realizing the scam, the plaintiff immediately contacted BOA and was told that nothing could be done until he received his monthly billing statement. On receipt of the statement one month later, the plaintiff again contacted BOA, which credited his account while it investigated. In a confirmatory letter, BOA stated that, although Western Union could provide additional facts, BOA considered the dispute resolved. Although the plaintiff's next statement showed the credit, BOA followed up with a subsequent letter, which stated that, based upon additional information from Western Union, BOA believed the charge was in fact valid and would reinstate it to the plaintiff's account. The plaintiff then sent a letter detailing the events, declaring the charge invalid, and requested it be removed. BOA denied his request. The plaintiff paid the charge and filed suit. More ›

Third Circuit Disagrees with Fourth and Ninth Circuit, Rules that Limitations Period for FDCPA Claims Starts on Occurrence

In Rotkiske v. Klemm, the Third Circuit ruled that the statute of limitations for a Fair Debt Collection Practices Act (FDCPA) claim begins to toll on the date of the alleged violation, not when the plaintiff discovers the violation. That's significant, because the Fourth and Ninth Circuits have ruled otherwise. More ›

TCPA Developments: Consumer's Attempt to Revoke Consent to Text Messages Found to be Unreasonable

In Nicole Rando v. Edible Arrangements, International, LLC, a consumer sued Edible Arrangements under the Telephone Consumer Protection Act (TCPA) arguing that the company sent her text messages after she had revoked her consent. The New Jersey federal court granted Edible's Motion to Dismiss, finding that the consumer's revocation was not "reasonable." The consumer was prompted to text "STOP" if she wished to revoke her consent, but the consumer responded instead with long sentences such as "Thank you. I'd like my contact info removed" or "I asked to be removed from this service a few times. Stop the messages." More ›

Eighth Circuit Joins Five Other Circuits in Applying a Materiality Requirement to FDCPA Claims

In Hill v. Accounts Receivable Services, LLC, a consumer sued a collection agency for violations of § 1692e of the Fair Debt Collection Practices Act (FDCPA) on allegations that the collection agency's exhibits submitted in a state court action—which proved the assignment of the debt from the creditor—were false, misrepresented the legal status of the debt, and threatened actions the agency did not intend to take. The FDCPA action followed the state court's decision to grant judgment in favor of the consumer. The district court granted the collection agency's motion for judgment on the pleadings, concluding that the complained of actions were not material. The consumer appealed. More ›

Hinshaw Obtains Major Win for Passive Debt Buyer Before Massachusetts Supreme Judicial Court

Hinshaw secured a major victory last week before the Massachusetts Supreme Judicial Court on behalf of passive debt buyers. At issue was whether LVNV Funding, LLC was operating as an unlicensed debt collector in Massachusetts. Passive debt buyers are investors who purchase debt, and then hire debt collectors to collect the debt on their behalf. The passive debt buyer takes no action in furtherance of the collection of debt it owns, and never has any contact with any debtor. More ›

Despite Acceleration of Debt Through Prior Dismissed Foreclosure Action, Bankruptcy Petition Tolls Statute of Limitations on Subsequent Action

In Lubonty v. U.S. Bank National Association, a mortgagor sought to void a mortgage loan claiming that the six-year statute of limitations to foreclose had expired. The mortgagor had commenced multiple bankruptcy proceedings that trigged automatic stays and prevented foreclosure from proceeding for approximately four and a half years. New York law, CPLR § 204, extends the statute of limitations "[w]here the commencement of an action has been stayed by a court or by statutory prohibition," and the trial court held that the six-year statute of limitations was extended by the time period during which the foreclosure was stalled through successive bankruptcy petitions. More ›