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2022-06-14 20:27:57

Sheppard, Mullin, Richter & Hampton LLPMENU HomePracticeLawyersContact Financial Institutions Law BlogUp-to-date Information on Financial Institutions The Consumer Financial Protection Bureau Adopts New Rule Barring Class Action Waivers in Arbitration AgreementsBy Mark Rackers and Winnie Wu* on July 14, 2017 Posted in Financial InstitutionsAs expected, and with few changes, the Consumer Financial Protection Bureau adopted its proposed rule barring financial companies regulated by the agency from including class action waivers in arbitration agreements. Arbitration clauses in new contracts offering a consumer financial product or service will need to include specified language indicating that arbitration cannot be used to stop the consumer from pursuing a class action. Continue ReadingTweet this post Like this post Email this post Share this post on LinkedIn Tags: CFPB, Consumer Financial Protection BureauThe Ninth Circuit Holds That Enforcing A Security Interest Is Not Necessarily Debt CollectionBy Mark Rackers and Shannon Petersen on October 27, 2016 Posted in Financial InstitutionsOn Oct. 19, 2016, the Ninth Circuit held that merely enforcing a security interest is not “debt collection” under the federal Fair Debt Collection Practices Act (“FDCPA”).  In so holding, the Ninth Circuit disagreed with earlier decisions by the Fourth and Sixth Circuits, creating a split that might eventually be resolved by the U.S. Supreme Court. Continue ReadingTweet this post Like this post Email this post Share this post on LinkedInCFPB Prevails On Summary Judgment Against CashCall, Inc.By John Dineen on September 2, 2016 Posted in National LendersOn August 31, 2016, in a ground breaking decision, the United States District Court in Los Angeles ruled that CashCall, Inc. violated the Consumer Financial Protection Act in connection with efforts to collect on certain loans that would have been held void under state law had CashCall originated the loans in question in the states where the borrowers resided.  According to the pleadings, CashCall had worked closely with the originator of the loans in question, assisting with the logistics of originating the loans and purchased all of the loans shortly after loan origination.  The court concluded that CashCall was the “true lender” and was responsible for the issuance of the loans – rejecting CashCall’s contention that another firm (based on a Native American reservation) was the originator of the loans.  While the full impact of this decision is not yet known, it is critical reading for anyone engaged in the loan origination space.   A copy of the ruling is attached hereto.Tweet this post Like this post Email this post Share this post on LinkedInMost Recent CFPB Supervisory Highlights Feature FCRA, LO Compensation and Debt Collection IssuesBy Sherwin Root on August 26, 2016 Posted in National LendersThe Consumer Financial Protection Bureau’s most recent supervisory highlights publication featured issues relating to the Fair Credit Reporting Act, loan originator compensation and in-person debt collection that should be on mortgage lenders’ and debt collectors’ radar. Continue ReadingTweet this post Like this post Email this post Share this post on LinkedIn Tags: CFPB, Consumer Financial Protection Bureau, EZCORP, Fair Credit Reporting Act, Fair Debt Collection Practices Act, FCRAWill Madden v Midland Disrupt Loan Sales and Platform Lending?By Colleen McDonald and Thomas Reddy on July 19, 2016 Posted in National LendersWhere do marketplace lenders and secondary loan market participants find themselves on the issue of preemption of state usury laws after the June 27 denial of the petition for a writ of certiorari in Madden v. Midland by the U.S. Supreme Court?In Madden v. Midland, the US Court of Appeals for the Second Circuit refused to follow the “valid-when-made” rule when considering the scope of federal preemption of state usury laws under the National Bank Act.  The court held that the NBA did not bar the application of state usury laws to a national bank’s assignee.  In considering the applicability of the National Bank Act to a loan in the hands of a non-bank assignee, the Second Circuit considered a number of cases upholding preemption of state usury laws under the National Bank Act but invoked a seemingly new rule for applying section 85 of the National Bank Act (permitting a national bank to charge interest at the rate permitted by its home state).  The Second Circuit concluded that preemption is only applicable where the application of state law to the action in question would significantly interfere with a national bank’s ability to exercise its power under the National Bank Act.  The court reasoned further that where a national bank retained a “substantial interest” in the loan, the application of the state usury law would conflict with the bank’s power authorized by the National Bank Act. Continue ReadingTweet this post Like this post Email this post Share this post on LinkedIn Tags: Lenders, Madden, Madden v. Midland, MidlandNotice to Mortgage Lenders – Your Mortgage Interest Statements Must be Revised Starting in Tax Year 2016By Sherwin Root on June 15, 2016 Posted in Financial InstitutionsAn act passed by Congress last year makes changes to IRS Form 1098 (Mortgage Interest Statement) starting in tax year 2016 (reported commencing in calendar year 2017).  Internal Revenue Code Section 6050H(b)(2)(D) requires that a Form 1098 include “the amount of outstanding principal on the mortgage as of the beginning of the calendar year” as well as the date of origination of the mortgage loan.  Earlier this month, the IRS released a revised Form 1098 which repeats the language quoted in the previous sentence without further elaboration.  A question had been raised as to whether the amount of outstanding principal as of January 1 needed to be updated to reflect a monthly payment received after January 1 but which is credited as of January 1.  The Credit Union National Association is reporting that the IRS has clarified that any payments received after January 1 (such as during the grace period for receipt of monthly payments) are not to be reflected in the outstanding balance as of January 1, nor is a payment that is received prior to January 1 but rejected for insufficient funds after January 1 to be added back to the outstanding balance as of January 1.Mortgage lenders must make sure that their systems are updated to provide the revised Form 1098 starting next year.Tweet this post Like this post Email this post Share this post on LinkedInA Proposition 65 Violation May Be Lurking in Your Cash Register ReceiptBy Meredith Jones-McKeown and Chris Mackay, Sr. Assoc. Toxicologist, AMEC Foster Wheeler on May 26, 2016 Posted in Financial InstitutionsMany consumer-facing businesses have learned to identify high-risk Prop 65 targets:  soft, flexible plastics; faux and colored leathers; and any kind of brass or metal that may contain lead or other heavy metals.  But businesses need to take action to avoid Prop 65 liability based on a new culprit: bisphenol-A (BPA) that may be lurking in your cash register receipts and other thermal papers.  Continue ReadingTweet this post Like this post Email this post Share this post on LinkedInGoogle To Ban Payday Loan AdvertisementsBy Sherwin Root on May 13, 2016 Posted in Financial InstitutionsGoogle announced on May 11 that effective on July 13, 2016 it will ban all payday loan advertisements from its site.  Google was responding to concerns raised by consumer advocates who argued that the lending practice exploits the poor and vulnerable by offering them immediate cash that must be repaid at exorbitant interest rates.  Google joins Facebook in prohibiting such advertisements.  The decision marks the first time that Google has announced a global ban on advertisements for a broad category of financial products. Continue ReadingTweet this post Like this post Email this post Share this post on LinkedInIn Wake of Panama Papers Scandal Obama Calls for Stricter Bank Regulations, Tax RulesBy Raymond Marshall and David Cannon on May 6, 2016 Posted in Financial InstitutionsIn a news conference today President Obama addressed rules and proposed regulations announced Thursday intended to help the U.S. fight tax evasion and other crimes connected to anonymous offshore companies and accounts.  The announcements come after a month of intense review by the administration following the first release of the so-called Panama Papers, millions of documents stolen or leaked from Panamanian law firm Mossack, Fonseca.  The papers have revealed a who’s who of international politicians, business leaders, sports figures and celebrities involved with financial transactions accomplished through anonymous shell corporations. Continue ReadingTweet this post Like this post Email this post Share this post on LinkedInThe TCPA And Mortgage Servicing Rules: Caught Between A Rock And A Hard PlaceBy Lisa Yun Pruitt and Shannon Petersen on March 30, 2016 Posted in Financial InstitutionsMortgage servicers are heavily regulated. Usually, the worst that can be said is that the laws and regulations are many, complex, and onerous.  Sometimes, however, they are contradictory. Continue ReadingTweet this post Like this post Email this post Share this post on LinkedInOlder Posts SearchAbout the Firm Sheppard Mullin is a full-service Global 100 firm with more than 1000 attorneys in 15 offices located in the United States, Europe and Asia. Since 1927, industry-leading companies have turned to Sheppard Mullin to handle corporate and technology matters, high-stakes litigation and complex financial transactions. In the U.S., the firm’s clients include more than half of the Fortune 100. For more information, please visit www.sheppardmullin.com.Archives ArchivesSelect Month July 2017 October 2016 September 2016 August 2016 July 2016 June 2016 May 2016 March 2016 January 2016 October 2015 August 2015 April 2015 March 2015 January 2015 June 2014 May 2014 January 2014 December 2013 November 2013 August 2013 May 2013 February 2013 December 2012 October 2012 July 2012 June 2012 May 2012 April 2012 March 2012 January 2012 October 2011 September 2011 August 2011 June 2011 April 2011 February 2011 January 2011 December 2010 November 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 November 2009 August 2009 July 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 February 2008 April 2007 March 2007 January 2007 November 2006 September 2006 June 2006 May 2006 February 2006 January 2006 December 2005 August 2005 July 2005 June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 October 2004 Recent UpdatesThe Consumer Financial Protection Bureau Adopts New Rule Barring Class Action Waivers in Arbitration AgreementsThe Ninth Circuit Holds That Enforcing A Security Interest Is Not Necessarily Debt CollectionCFPB Prevails On Summary Judgment Against CashCall, Inc.Most Recent CFPB Supervisory Highlights Feature FCRA, LO Compensation and Debt Collection IssuesWill Madden v Midland Disrupt Loan Sales and Platform Lending?Stay Connected Subscribe to this blog by email View All Sheppard Mullin BlogsAntitrust Law BlogArt Law BlogCannabis Law BlogChina Law Update BlogClass Action Defense Strategy BlogConstruction & Infrastructure Law BlogConsumer Finance and Fintech BlogCorporate & Securities Law BlogCovering Your Ads BlogEnergy Law BlogEntertainment Law BlogExecutive Compensation Law BlogEye On PrivacyFashion & Apparel Law BlogFCC Law BlogFDA Law UpdateFrench DeskFinance & Bankruptcy Law BlogGame CounselGlobal Trade Law BlogGovernment Contracts & Investigations BlogHealthcare Law BlogHospice Law BlogInsurance Law BlogIntellectual Property Law BlogLabor & Employment Law BlogLatin American BlogLaw of the LedgerLex ArbitriNew York Commercial Division Round-Up BlogNY Courts & The Fair Labor Standards ActOrganizational Integrity Group BlogReal Estate, Land Use & Environmental Law BlogRetail Trend SpotterU.S. Legal Insights for Korean BusinessesVenture Law Blog Back To Top Sheppard, Mullin, Richter & Hampton LLPFinancial Institutions Law BlogStay Connected Privacy Policy |Disclaimer Copyright © 2022, Sheppard, Mullin, Richter & Hampton LLP. 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