A U.S. District Court Judge in Kansas refused to dismiss a lawsuit that alleged that a debt collection letter was false and/or misleading because it failed to inform the consumer that a partial payment would revive the statute of limitations on otherwise time-barred debt.
Yesterday the Ninth Circuit Court of Appeals affirmed a lower court dismissal of a putative Telephone Consumer Protection Act (“TCPA”) class action ruling that the plaintiff had provided “prior express consent” to receive the text messages in question.
Mandatory arbitration provisions may be on the endangered species list, but they are not gone yet. Two opinions from two different courts were published this past week addressing mandatory arbitration clauses. The cases presented different issues and the results were not consistent.
On Tuesday, January 26th the National Council of Higher Education Resources (NCHER), the Education Finance Council (EFC), and the Student Loan Servicing Alliance (SLSA) filed an ex parte letter with the Federal Communications Commission (FCC) offering background details on federal student loans and the importance of including pre-default servicing in the Notice of Proposed Rulemaking (NPRM) under development by the Bureau of Consumer and Governmental Affairs.
The Report examined internal CFPB documents relating to the December 2013 consent order against the auto finance company Ally Financial Inc. and its subsidiary Ally Bank. The Report stated the CFPB purposefully chose to distribute the $80 million dollars in Ally Bank settlement funds “without verifying that recipients [were] eligible to receive the money.”
Yesterday, a Federal Judge in Virginia denied a motion to certify a class action case against an arm of publicly traded debt buyer PRA Group (PRAA). The lawsuit was originally filed exactly one year earlier, on January 28, 2015. The case illustrates the challenges of attempting to be FDCPA compliant when dealing with consumers that do not speak English or for whom English is a second language.
In Garfield v. Ocwen Loan Servicing, LLC, the Second Circuit Court of Appeals examined whether a debtor who has been discharged in a bankruptcy can sue in a district court under the FDCPA,as opposed to seeking relief in the bankruptcy court. The Court held that the Bankruptcy Code provision governing the discharge injunction, “does not explicitly create a cause of action for its violation, whereas the automatic stay provision provides such a remedy…”
The U.S. District Court for the Middle District of Florida recently dismissed allegations that a debt buyer violated the federal Fair Debt Collection Practices Act by filing a proof of claim on time-barred debt, holding that such claims are precluded by the Bankruptcy Code, and that the FDCPA does not provide a private right of action against debt collectors who file time-barred proofs of claim in bankruptcy court.
A federal judge in Indianapolis has ruled that a lawsuit alleging violations of the FDCPA and the United States Racketeer Influence and Corrupt Organization Act (“RICO”) against Sherman Financial Group, one of the country’s largest debt buyers, cannot proceed as a class action because circumstances vary too much among the class members. Assuming this decision withstands any subsequent appeal it appears that Sherman made a good decision to vigorously defend the case.
The case of mortgage lender PHH Corporation v. CFPB has moved to the D.C. federal appeals court, with a hearing scheduled for April 12, the Wall Street Journal reported over the weekend. Although this is not an ARM-related case, it does involve a significant challenge to the CFPB’s rule enforcement powers, which makes it very relevant to the industry.