CFPB Publishes Supervisory Highlights Special Edition Focusing on COVID-19 Prioritized Assessments; Mortgage Servicing Issues Are Front and Center

CFPB Publishes Supervisory Highlights Special Edition Focusing on COVID-19 Prioritized Assessments; Mortgage Servicing Issues Are Front and CenterOn January 21, 2021, the Consumer Financial Protection Bureau (CFPB) released the 23rd issue of its Supervisory Highlights report, a special edition focusing entirely on the COVID-19 Prioritized Assessments that have been going on since the summer. The report provides general observations on the Prioritized Assessments and then moves into the areas of risk across nine product lines that were identified by the CFPB in the course of its work.

While we always stress the importance of tracking and analyzing the issues highlighted by the CFPB in every … Continue Reading

Continued Payments by the VA Won’t Stop Qui Tam When It Comes to Purported Fraud on Veterans

Continued Payments by the VA Won’t Stop Qui Tam When It Comes to Purported Fraud on Veterans

In the latest instance of courts interpreting the Supreme Court’s landmark False Claims Act ruling in Universal Health Services, Inc. v. Escobar, the Eleventh Circuit recently departed from the trend of giving great weight in the analysis of whether a violation was material to the fact that the government continued payment, finding that other efforts by the government to redress noncompliance may prevent judgment in a defendant’s favor.

As a prerequisite to obtain a Veteran’s Administration (VA) loan guaranty, lenders are required to certify compliance with various VA regulations, … Continue Reading

Supreme Court Holds Mere Retention of Bankruptcy Debtor’s Property Is Not a Violation of the Automatic Stay but More Questions Remain

Supreme Court Holds Mere Retention of Bankruptcy Debtor’s Property Is Not a Violation of the Automatic Stay but More Questions RemainFor the past few years, the federal circuit courts have struggled with the issue of whether a creditor retaining possession of bankruptcy estate property violates the automatic stay. For example, is a creditor required to automatically turn over a vehicle as soon as the bankruptcy petition is filed, or can the creditor retain possession of the vehicle while awaiting an order of the bankruptcy court adjudicating turnover in an adversary proceeding? As we previously wrote, the majority of circuits, including the Seventh Circuit in City of Chicago v. Robbin Continue Reading

What Does CA AB 3088 Mean for Mortgage Servicers? PART II

What Does CA AB 3088 Mean for Mortgage Servicers? PART IILast year, our blog, What Does CA AB 3088 Mean for Mortgage Servicers?, examined some new and notable obligations California imposes on mortgage servicers, including requirements to provide forbearance denial notices. In that blog, we promised the publication of a Part II that further expanded upon CA AB 3088. In this Part II, we discuss some of the ways in which CA AB 3088 significantly expands servicers’ obligations under the California Homeowners’ Bill of Rights, and we also discuss some fairly significant tension between CA AB 3088 and Regulation … Continue Reading

Bankruptcy Court Upholds Foreclosure Sale That Occurred Between Bankruptcy Case Dismissal and Subsequent Reinstatement

Bankruptcy Court Upholds Foreclosure Sale That Occurred Between Bankruptcy Case Dismissal and Subsequent ReinstatementFrequently, borrowers file for bankruptcy at the 11th hour to halt foreclosure sales. Once a petition for bankruptcy relief has been filed, secured creditors must cease their collection efforts to avoid violating the automatic stay. However, the automatic stay terminates upon a debtor’s dismissal and closure of the bankruptcy case. A Pennsylvania bankruptcy court recently ruled that if a foreclosure sale occurs between the time when a bankruptcy case is dismissed and when it is reinstated, the foreclosure sale is not void and does not violate the automatic stay.… Continue Reading

FTC’s Comment on ECOA and Regulation B Signals Continued Focus on Small Business Lending

FTC’s Comment on ECOA and Regulation B Signals Continued Focus on Small Business LendingLast year, the CFPB issued a notice and request for information on the Equal Credit Opportunity Act (ECOA) and Regulation B. Specifically, the CFPB sought “comments and information to identify opportunities to prevent credit discrimination, encourage responsible innovation, promote fair, equitable, and nondiscriminatory access to credit, address potential regulatory uncertainty, and develop viable solutions to regulatory compliance challenges under” the ECOA and Regulation B. Ten topics were identified for comment: disparate impact, limited English proficiency, special purpose credit programs, affirmative advertising to disadvantaged groups, small business lending, sexual orientation and … Continue Reading

Florida Court Affirms That Merchant Cash Advance Product Not Subject to Usury Statute

Florida Court Affirms That Merchant Cash Advance Product Not Subject to Usury StatuteThis month, a Florida appellate court held that a merchant cash advance (MCA) purchase and sale agreement was not a “disguised loan” and, therefore, was not subject to Florida’s criminal usury statute. MCA purchase and sale agreements, which offer merchants a fast and efficient way to obtain funding for their operations, are not loans. Rather, these agreements constitute the purchase of a merchant’s future receipts by the MCA company. However, some merchants have claimed that MCAs are “disguised loans” subject to their respective states’ usury law. While several states have … Continue Reading

CFPB Approves Synchrony’s “Dual-Feature Credit Card”

CFPB Approves Synchrony’s “Dual-Feature Credit Card”On December 30, 2020, the CFPB approved Synchrony Bank’s application to offer a “dual-feature credit card” (DFCC) under the CFPB’s Compliance Assistance Sandbox (CAS) policy. According to Synchrony’s application, the DFCC allows consumers to graduate from a secured-use credit card to an unsecured feature after at least one year and if the customer satisfies certain eligibility criteria.

The CAS policy, which was finalized in September 2019, has the “primary purpose” of “provid[ing] a mechanism through which the Bureau may more effectively carry out its statutory purpose and objectives by … Continue Reading

Four Significant Changes to Consumer Bankruptcy Included in the Consolidated Appropriations Act, 2021

Four Significant Changes to Consumer Bankruptcy Included in the Consolidated Appropriations Act, 2021On December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 (CAA 2021). Similar to the March 2020 CARES Act, several temporary changes to the Bankruptcy Code are included in Title X of the CAA 2021. Below, we examine four of the CAA 2021’s most significant changes to consumer bankruptcy laws. These changes are temporary and will sunset either on December 27, 2021, or December 27, 2022.

Section 1001 of Title X of the CAA 2021 addresses bankruptcy relief, including: a temporary revision to the definition of “property of … Continue Reading

New York Enacts a Moratorium on COVID-19-Related Residential Evictions and Foreclosures

New York Enacts a Moratorium on COVID-19-Related Residential Evictions and ForeclosuresOn December 28, 2020, New York passed a new law entitled the “COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020.” The act places a moratorium on COVID-19-related residential real property mortgage foreclosure actions and residential eviction proceedings until May 1, 2021, where a tenant or homeowner has submitted a “hardship declaration” to the foreclosing party, landlord, and/or the court. The act also places a stay on existing foreclosure actions or eviction proceedings for 60 days to give homeowners and renters an opportunity to declare hardship and gain … Continue Reading

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