CFPB Can Enforce $50M Order Against Online Lender, CEO – Law360

Law360 (July 30, 2021, 5:31 PM EDT) — A Kansas federal judge on Friday granted the Consumer Financial Protection Bureau’s bid to enforce an administrative order for more than $50 million in restitution and fines against an online payday lender and its CEO while they fight the order at the Tenth Circuit.U.S. District Judge John W. Lungstrum directed Integrity Advance LLC and James Carnes to stop holding out and comply with the CFPB’s January order, which required them to pay restitution of $38.5 million and penalties of $12.5 million as part of an enforcement action that dates back to 2015.

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Help available for renters after eviction moratorium ends: ConsumerFinance.gov

The eviction moratorium started by the US Centers For Disease Control and Prevention at the beginning of the COVID crisis more than a year ago comes to an end this weekend. Federal authorities have opened a new web site to provide help to renters who may soon be pushed out of their homes.
In an interview with News Center 7, U.S. Housing and Urban Development Secretary Marcia Fudge said the site is designed to make it easy for renters to check out their options on their own and determine if they might qualify for financial assistance. 
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“We know within the system there’s about $46 billion total. We know it is enough money to not only pay arrearages but to bring people current and if there are additional resources available, we can even pay so many months in advance,” Fudge said.
A link to the site is at the top of the home page of the Consumer Financial Protection Bureau at ConsumerFinance.gov and it provides options for renters and homeowners who have a mortgage through the VA or FHA. There is also a chapter for apartment owners who are thinking about evicting renters once the moratorium expires.
Melissa Tuttle, Clark County Clerk of Courts, said she does expect an increase in both apartment eviction filings in the Municipal Court and for foreclosures with her office.
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“Some courts have continued to accept eviction filings and they will just hold their hearings after the moratorium is lifted. I know some courts will have backlogs of going through the ones that have already been filed as long as those cases have not been dismissed. And then some courts have not been accepting the filings,” Tuttle said.
Monday will be the first business day after the moratorium ends and Tuttle expects many courts will see much more traffic, with a rush to file eviction notices.
“There will be a large volume. There are a significant number of people who are not reaching out for assistance that is available to them because they are afraid of filing for that assistance and getting denied,” Tuttle said.
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Tuttle added that she expected landlords will be judging whether it is better for them to file for eviction now or to wait and see if the renter can come up with what they owe in the near future.
Advice to people who fear they may be evicted now?
Tuttle said help is available through local organizations, including Clark County OIC. They can be found at https://oicofclarkco.org/
She also mentioned legal aid through the group Ohio Legal Help at https://www.ohiolegalhelp.org/  so that people can learn more about their legal rights if they are facing eviction.

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Daily Decision Recap: NY Court Finds Multiple Hunstein-type Plaintiffs Lack Standing

Each week, ACA International’s compliance team covers relevant case summaries for ACA members. Members may also submit cases for consideration to our compliance team at dailydecision@acainternational.org.
Here are the cases covered July 27 – July 30:
July 27
Cunningham v. Creative Edge: Judge Affirms No Article III Standing, Motion For Default DeniedA judge in the U.S. District Court for the Eastern District of Texas again found a TCPA plaintiff lacks standing for claims, consistent with the Creasy decision, one day after a judge in the U.S. District Court for the Northern District of Texas took the contrary position and found a TCPA plaintiff did have standing for claims arising during the key time period between 2015 and 2020.
Continue reading the summary here.
 Stewart v. Network Cap. Funding: An Expression of Disinterest Does Not Revoke ConsentA consumer stated a telemarketer contacted him using an ATDS after he revoked consent. The court found that the consumer did not allege enough facts for the court to consider whether the telemarketer used an ATDS and was disinterested in the request to revoke consent.
Continue reading the summary here.
June 28
Webb v. AWA Collections: Court Dismisses Consumer’s FDCPA Claims
The debt collector attempted to collect a medical debt from the consumer, who then claimed the debt collector violated several provisions of the Fair Debt Collection Practices Act and filed a complaint with the Consumer Financial Protection Bureau. The debt collector removed the account from the consumer’s credit report and closed the account in response to the CFPB complaint. The consumer then sued the debt collector for violating the FDCPA.
Continue reading the summary here.
Jones v. State Farm: TCPA Claim Survives Plaintiff’s Death, Amendment Not Futile
In a Telephone Consumer Protection Act action, the representative of a deceased plaintiff’s estate was permitted to amend the complaint to substitute the representative in place of the plaintiff because the factual support contained in the complaint met the standard for pleading under Rule 12(b)(6).
Continue reading the summary here.
July 29Bonner v. Radius Global Solutions: Collection Letter Not Misleading Under FDCPA
The consumer defaulted on a home improvement loan. The debt collector attempted to collect the debt and sent a letter to the consumer, who claimed it violated the Fair Debt Collection Practices Act.
Continue reading the summary here.
FDCPA Mailing Vendor Cases: NY Court Finds Multiple Hunstein-type Plaintiffs Lack Standing
In dismissing multiple actions because the plaintiffs lack Article III standing, the court found (1) Hunstein was instructive but not binding upon courts in the 2nd Circuit, (2) the U.S. Supreme Court’s decision in Ramirez cast significant doubt on the continued viability of Hunstein, and (3) even if valid, Hunstein may not apply to the facts of the instant cases.
Continue reading the summary here.
 July 30
Troy v. Equifax: Court Allows Claims of Negligent and Willful Violation of FCRA to Proceed
The consumer informed the CRA that he no longer disputed a debt on his credit report. The CRA did not remove the disputed notation from the consumer’s credit report. The consumer alleges the CRA did not conduct a reasonable reinvestigation of his claim.
Continue reading the summary here.
Haynes v. TransUnion: Plaintiff’s FDCPA & FCRA Claims Survive Motion to Dismiss
General factual allegations of injury are sufficient at the pleading stage, and even threadbare recitations of facts may suffice.
Continue reading the summary here.      
If you’ve recently obtained a judicial opinion that might benefit other ACA members, email it to us: dailydecision@acainternational.org.

Join the discussion on legal and compliance topics with your fellow members on the Members Attorney Program community on The Hub. Simply log on to The Hub and select Members Attorney Program under the Communities menu.
ACA’s Daily Decision is powered by ACA’s Litigation Advocacy and Compliance Teams.

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CFPB shelves plan to extend debt collection compliance deadline

The Consumer Financial Protection Bureau said two debt collection rules will go into effect on Nov. 30 as originally planned, rejecting a plea by consumer advocates for the agency to reopen the rulemakings.
The CFPB said Friday that the agency no longer plans to extend the effective dates to Jan. 29, 2022, as previously proposed. The agency had considered allowing more time to weigh concerns by consumer advocacy groups that the Trump-era rules were too weak. But reopening the regulations has legal issues, the bureau said.
“Although consumer advocate commenters generally supported extending the effective date, they did not focus on whether additional time is needed to implement the rules,” the CFPB said in a press release. “A reconsideration of the rules was beyond the scope of the [notice of proposed rulemaking] and could raise concerns under the Administrative Procedure Act.”

The final debt collection rules limit how often a collector can call a borrower to seven calls per week, but allow unlimited contact by voice mail, email and text messages.

Consumer advocates objected to the latter provision, saying consumers should be able to opt in to unlimited electronic communications. Consumers will be allowed to opt out at any time.
“They’re leaving the rules as-is, which I think this is a huge win for industry,” said Joann Needleman, a leader at Clark Hill’s consumer financial services regulatory group.
The CFPB’s first debt collection rule, issued in October by former CFPB Director Kathy Kraninger, a Trump appointee, focused on texts and emails, updating the Fair Debt Collection Practices Act.
A second rule clarified which disclosures collectors must provide to consumers at the beginning of a correspondence and prohibits debt collectors from suing or threatening to sue consumers on time-barred debt. The second rule also requires that debt collectors take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency.
The CFPB reiterated that it can still consider changes to either rule at any time.
“Nothing in this decision precludes the CFPB from reconsidering the debt collection rules at a later date,” the bureau said.

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BREAKING: CFPB Confirms Reg F Will Take Effect on November 30, 2021

On April 7, 2021, the CFPB issued a Noticed of proposed Rule Making (NPRM), which proposed delaying the effective date of the Debt Collection Rules (Reg F) for 60 days. The CFPB issued a press release today indicating the effective date will not be delayed; Reg F will go into effect on November 30, 2021, as planned.
The CFPB determined that an extension of the effective date was unnecessary since most public comments did not support it; most industry commenters stated that they would be prepared to comply with the rules by November 30, 2021. While consumer advocates supported extending the effective date, they did not focus on whether additional time was needed for implementation. Instead, the advocates’ comments sought an extension to allow for a reconsideration of Reg F.  The CFPB noted that reconsideration of the rules was beyond the scope of the NPRM and could raise concerns under the Administrative Procedure Act.
That said, the CFPB expressly stated that nothing in today’s decision would prohibit them from reconsidering Reg F at a later date. The CFPB will consider additional guidance for debt collectors, including those servicing mortgage loans, as necessary and will publish a formal notice in the Federal Register withdrawing the April 2021 proposal.
insideARM Perspective:
Many in the accounts receivable industry were worried that if the CFPB extended the effective date of Reg F, it would use that time to reconsider the rules. It’s nice to see that although the CFPB received comments urging for reconsideration, the bureau is followed appropriate procedures and did not consider anything outside the scope of the NPRM. With this decision, those in the accounts receivable industry should feel some relief that their implementation plans will not be upended without warning.
When we first reported the NPRM, we cautioned accounts receivable entities to proceed as if November 30, 2021would remain the effective date since the NPRM was only a proposal. We hope everyone continued with their implementation strategies and will be ready to go by November 30th.
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Want to talk to your peers about Reg F before and after implementation and get answers to your Reg F questions?  if so, check out the iA Research Assistant.

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CFPB: No Extension for Effective Date of Debt Collection Final Rules | ABA Banking Journal

The Consumer Financial Protection Bureau today said it would not delay the effective date of two final rules issued under the Fair Debt Collection Practices Act, which governs the activity of third-party debt collectors. The rules will take effect as planned on Nov. 30. The CFPB in April had proposed to delay the rules’ effective date until Jan. 29, 2022, but the CFPB said it “has now determined that such an extension is unnecessary,” and will formally withdraw the extension proposal.
The FDCPA does not generally apply to creditors collecting their own debts and thus does not generally apply to banks; however, banks routinely oversee the activity of third-party collectors. The first rule—issued in October 2020—addressed the use of text messaging and email to contact consumers regarding debts, and provided for consumer opt-out of these contact methods. It also included provisions on disputes, as well as record retention requirements for FDCPA debt collectors. The second final rule—issued in December 2020—covered passive debt collection, time-barred debt and required validation notices to consumers.

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CFPB/FHFA Poll Examines Pre-Pandemic Borrow Experience

Americans who applied for mortgages in 2017-2019 reported slightly increasing apprehension about not being approved than in previous years, more used a mortgage broker, and a large portion of the respondents to a survey by two federal agencies said paperless online mortgage processes are vital when choosing a lender. Agency officials point out that the datasets reflect consumers’ views just prior to the onset of the pandemic, which could mean valuable insight for lenders and brokers in the months ahead.
The results come from a borrower-experience study by Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB), which includes updated loan-level data mined by the National Survey of Mortgage Originations (NSMO) from people obtaining residential mortgages.
“The NSMO data released today sets a baseline about how borrowers viewed the mortgage process just prior to the COVID crisis,” said FHFA Deputy Director Lynn Fisher. “Releasing this data to the public helps promote an understanding of the specific challenges and successes that borrowers experienced during the mortgage process.”
Hearing directly from borrowers involved in the origination process can bring clarity and understanding to market trends, added Mark McArdle, CFPB Assistant Director for Mortgage Markets.
“The data collected in this survey will provide us with a fuller picture of borrowers’ experiences and will improve the lending process for future borrowers.”
Below are several of the key takeaways from the study:

The percent of survey respondents who reported not being concerned about qualifying for a mortgage during the application process increased somewhat from 2018 to 2019 (from 48 to 51% for home purchase mortgages and 57 to 66% for refinances).
The percent of survey respondents who reported a paperless online mortgage process being important in choosing the mortgage lender/broker remained relatively high and unchanged from 2018 to 2019 (40% for home purchase mortgages and 44% for refinances).
The percent of survey respondents who reported applying for a mortgage through a mortgage broker increased from 2018 to 2019 (from 42 to 46% for home purchase mortgages and 30 to 38 % for refinances. The percent of survey respondents who applied directly through a bank or credit union decreased from 2018 to 2019 (from 54 to 49 for home purchase mortgages and 67 to 61 for refinances).

More recent client satisfaction data:
A J.D. Power-published survey that rates customers’ experience with their mortgage servicers showed an increase of overall satisfaction by a significant six points during the past year, as the industry combined relief efforts and pivoted to digital solutions in order to help clients weather the effects of a global health crisis. That said, the data analytics and consumer intelligence company’s 2021 U.S. Primary Mortgage Servicer Satisfaction Study indicated that, as stated in a press release, “the pandemic-driven goodwill belies a larger collection of client-satisfaction challenges, especially for bank-affiliated lenders. As loan forbearance programs come to an end and more normalized customer interactions resume, traditional banks are starting to lose their edge over non-bank lenders.

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Mortgage delinquencies see first year-over-year decline since the 2020 recession, with a caveat

The U.S. mortgage market is finally turning a corner on delinquency rates.
The nation’s overall delinquency rate, meaning residential mortgages 30 days or more delinquent including those in foreclosure, was 4.7% for April 2021. Compared with April 2020, which experienced a 6.1% overall delinquency rate, a 1.4-percentage point year-over-year decrease occurred in April 2021.
This overall delinquency rate change represents the first year-over-year decrease and the lowest overall delinquency rate since the onset of the pandemic and 2020 recession, according to CoreLogic.
Although the overall delinquency rate is lower, the serious delinquency rate – mortgages 90+ days past due – are still rising.
Mortgage delinquency rates in April 2021 were:

1.0% for early-stage delinquencies, down from 4.2% a year earlier when delinquencies first spiked;
0.3% for 60-to-89-day delinquencies, down from 0.7% a year earlier; and
3.3% for 90+ day delinquencies, up from 1.2% a year earlier.

Here in California, 7.4% of mortgaged homeowners report being behind on their mortgage payment as of July 2021, according to the latest U.S. Census Bureau Household Pulse Data.
90+ day delinquencies rising
Despite overall delinquencies falling, delinquent homeowners are falling further behind on payments, casting doubt they will be able to catch up or resume payments without major intervention.
The nationwide foreclosure moratorium is scheduled to expire July 31, 2021. Homeowners unable to become current by the expiration date may be able to enter a forbearance program. The enrollment period for forbearance programs will remain open through September 30, 2021. To request mortgage forbearance, homeowners are advised to contact their servicer.
As of July 11, 2021, 3.5% of mortgages or 1.75 million homeowners are in a forbearance plan, according to the Mortgage Bankers Association (MBA).
Additional grace periods have been proposed by the Consumer Financial Protection Bureau (CFPB) to prepare for the onslaught of homeowners exiting forbearance when the foreclosure moratorium is lifted in the latter half of 2021. Mortgage servicers are thus limited from initiating foreclosure for all mortgages secured by a principal residence until after December 31, 2021, according to the CFPB’s final rules published June 28, 2021.
With California jobs still down 1.4 million from the pre-recession December 2019 peak, many homeowners have no ability to pay their mortgages. [See RPI e-book Real Estate Economics Chapter 1.2]
Most delinquencies won’t be cured until:

jobs return;
homes are sold off through forced sales; or
servicers work with homeowners to grant loan modifications.

Today’s delinquent mortgages are akin to a shadow inventory of future distressed sales. Though not yet tangible in the market, they will eventually be added to inventory as the foreclosure moratorium, forbearance programs and grace periods expire.
Expect an influx of inventory heading into 2022, to drag down home prices. The economic recovery won’t occur until a significant jobs recovery is underway, a situation not likely to occur until 2024-2025. However, this timeline is dependent upon government intervention to stimulate job creation and further extensions of the foreclosure moratorium.

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How Institutional Property Owners Support Tenants

Most property owners are taking steps to assist tenants who are struggling financially due to the effects of the coronavirus pandemic—that’s backed by research from the National Multifamily Housing Council (NMHC).
The past few days have seen an onslaught of news about the pending expiration of the federal eviction moratorium and the robust but slow allocation of billions of dollars in rental assistance to benefit both landlords and tenants. Coupled with that have been emerging reports related to the increasing popularity of single-family rentals as a form of investment. A report about investors infiltrating the housing market revealed their market share in single-family homes and condos rising as it dropped in apartments in 2020. Also on the rise is institutional investment in single-family renting, especially build-to-rent. The NMHC study examines property owners’ behavior in the face of the COVID-related economic crisis and contains lessons about practices that make the most sense into the future, according to NMHC President Doug Bibby.
“At the onset of the pandemic we issued a call to our industry to halt evictions, create payment plans, and work with residents as they faced this unprecedented hardship. The new data demonstrate how both the multifamily industry and residents alike made monumental sacrifices to meet their obligations during this crisis,” Bibby said. “As we transition away from these emergency pandemic orders, we ask apartment firms to continue their efforts to work with residents during this wind-down period.”
The NMHC indicates that with the distribution of nearly $47 billion in rental assistance, the rental market is stable enough for the moratorium to end July 31.
“As we transition away from these emergency pandemic orders, we ask [property owners]  to continue their efforts to work with residents during this wind-down period.”
Through its research, the NMHC issued a key actions that property owners can take to avoid evictions:

Encourage residents to seek rental assistance and apply on behalf of residents or assist with the application process where able. The Consumer Financial Protection Bureau just released a new tool that helps landlords do just that.
Offer solutions including payment plans, deferments and extended or flexible lease periods for residents who fell behind in rent payments due to the pandemic.
Provide notice of at least 30 days to residents before filing an eviction for non-payment of rental obligations.
Work with jurisdictions to break down artificial barriers to rental assistance benefits that stand in the way of residents receiving the help they need—for example, onerous documentation requirements.
Identify governmental and community resources to broadly help residents secure food, financial assistance and healthcare and share that information with residents.
Communicate with residents that it is a priority for the industry to partner with them to help them retain their housing.

The NMHC Pulse Survey on Eviction Mitigation Practices queried 74 institutional owners, 100% of whom responded that they had offered solutions for residents facing financial hardships. The most widely offered assistance options included payment plans, waived late fees, deferred payments, altered lease terms, cash for keys, and fee-free credit card transactions. The full study is available at NMHC.com.

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