When permissible purposes collide, a student loan servicer's license is partially preempted, and more in this issue of Consumer Financial Services Practice Digest

FCRA – When Permissible Purposes Collide

The FCRA provides several "permissible purposes" for which a company can obtain a consumer's credit report. For lenders and other financial services providers, two purposes are often central: (1) the evaluation of a consumer applying for an extension of credit and (2) the written instructions of the consumer. Often, lenders may operate under both permissible purposes by obtaining written authorization to pull a consumer's credit report in the context of an application for credit. The interplay between different permissible purposes and the limits of consumers' control over their credit reports can occasion a heightened risk of consumer confusion (and the accompanying risk of complaints and lawsuits).

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DC Student Loan Servicer License Partially Preempted

Washington, DC, California, Connecticut, and Illinois were among the first states to pass legislation regulating the servicing of student loans. However, roughly a fifth of the states have passed or proposed similar measures regarding student loan servicing. State student loan servicing laws and regulations typically prohibit misrepresentations, omissions, and other unfair or deceptive acts or practices in the servicing of student loans, and may put in place certain requirements about the application of payments, responses to inquiries, and other aspects of servicing. The state statutes also require that certain student loan servicers obtain a license from the state – a requirement that led to a legal challenge in DC earlier this year.

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Federal Court Issues First-of-Its-Kind Ruling on Reassigned Number Liability Under the TCPA

Leaving a prerecorded message without the consent of the new owner of that number raises the potential for TCPA litigation. A recent district court decision gives a bit of security to callers. There, the court applied a "reasonable reliance" test to determine whether a caller could be liable for leaving a prerecorded message for the wrong person when the previous owner of the telephone number had provided his prior express consent to receive calls at that number. Click here for information on an upcoming Venable-hosted webinar that will discuss this topic, along with other "hot" TCPA litigation issues.

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No Math Allowed – The Saga of New York Surcharge Law Continues

Whether merchants can charge consumers who pay with a credit card more and how that increase in price is described has been the subject of extensive litigation. According to a divided New York Court of Appeals, New York's anti-surcharge law, which banned merchants from imposing a surcharge on credit customers, does not actually prohibit a merchant from charging more or characterizing the difference in price for cash versus credit as a "surcharge" as long as the total price for credit purchases is posted. As a result, retailers are free to call the higher price for credit whatever they want as long as consumers do not have to do math to figure out what that price is. The decision sets the stage for the law to be upheld against claims that it restricts commercial speech in violation of the U.S. Constitution.

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The Influencer Marketing Trifecta

There's no denying the power of an influencer, which is why many global brands decide to partner with these ambassadors to market their products and services. This blog post discusses three golden rules that the ever-present U.S. influencer and brand marketer should monitor when embarking on such a partnership.

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Upcoming Events

December 5, 2018: "Administrative Law and Regulatory Update," a Venable-hosted CLE webinar.

December 12, 2018: "Looking Ahead: What to Expect in the 116th Congress," a Venable-hosted program in the firm's DC office.

December 13, 2018: "TCPA Litigation – Hot Issues and Current Trends," a Venable-hosted CLE webinar.

February 5, 2019: "Vendor Management and Integration" at the Receivables Management Association (RMA) Annual Conference.

February 7, 2019: "Mergers & Acquisitions Compliance for Debt Buyers" at the Receivables Management Association (RMA) Annual Conference.