November 03, 2020

Consumer Financial Services Practice Digest

3 min

Final Debt Collection Rule Issued by CFPB

Several years in the making, on October 30, 2020, the CFPB issued a significant debt collection final rule amending Regulation F, 12 CFR part 1006. This final rule ("Final Rule") governs the activities of debt collectors under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., bringing much-needed clarity and uniform standards to the practices that have developed over the 40 plus years since the FDCPA was enacted. The Final Rule, among other things, addresses electronic communications (e.g., email, text messages, and social media), voicemail messages, and telephone call frequency. The Final Rule also contains provisions on disputes, record retention, and several other topics. The Final Rule is a major development for all participants in the debt collection market and will have a direct impact on enforcement investigations, supervisory examinations, and litigation.

The OCC Draws a Bright Line for Determining the True Lender

With just two sentences and fewer than 70 words, the Office of the Comptroller of the Currency (OCC) has attempted to finally resolve the Madden issue. While this is a positive and massively important step for fintechs and lenders that rely on bank partnerships, there likely won't be full clarity until after the new rule is challenged.

CFPB Unveils Process for Seeking Early Termination of Consent Orders

CFPB consent orders typically include injunctive relief (fencing-in provisions and compliance reporting) that last for five years (or longer). This type of relief can create a significant operating burden on an entity covered by the consent order and limit its potential growth and employee retention. These fencing-in or conduct provisions generally limit how a business can operate—sometimes forcing a company to operate under rules stricter than the applicable laws and regulations. Given these burdens, companies that have provided the required redress and have made compliance changes often contemplate seeking early termination of the order. Recent CFPB guidance has shed some additional light on how the CFPB views and considers such requests.

CFPB Issues FAQs and Softens Tone on Mortgage Marketing Services Agreements

The CFPB has rescinded Compliance Bulletin 2015-05, a bulletin on Real Estate Settlement Procedures Act (RESPA) compliance with marketing services agreements (MSAs) – that produced uncertainty in the mortgage market due to the CFPB's position. The CFPB simultaneously released a Frequently Asked Questions (FAQs) guide that provides an overview of RESPA Section 8 and Regulation X, and addresses, among other things, gifts and promotional activities, and the compliant use of MSAs. The CFPB's action is a significant move in an area of regulation that is subject to a high degree of potential risk and industry uncertainty, but it remains to be seen whether the CFPB's FAQs will add clarity and certainty to compliance with Section 8 and best practices around the use of MSAs between settlement service providers.

A Fireside Chat and Crystal Ball Readings with FTC Attorney Advisors

Venable attorneys Eric Berman and Dan Blynn hosted a virtual fireside chat with attorney advisors to four current Federal Trade Commission (FTC) commissioners. Touching on each commissioner's background and enforcement priorities, the FTC attorney advisors offered insights into best practices and insider perspectives on interacting with the FTC through a series of questions and answers, posed by the Venable team and submitted by audience members. Each panelist spoke on their own behalf, and not on behalf of the FTC, but they provided our audience with unvarnished views on FTC practice and policy.

COVID-19 Recent News

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