Hudson Cook, LLP’s Post

The Third Circuit’s decision, which broadens the scope of “covered persons” under the Consumer Financial Protection Act (CFPA), underscores the expansive reach of the CFPB’s regulatory and enforcement powers, and has significant ramifications for financial institutions, service providers, and any firm within the consumer finance sector. #SteptoeAlert #CFPB #FinancialServices #ConsumerFinance #FinancialInnovationRegulation

A new report from the National Consumer Law Center (NCLC) finds that while 45 states and the District of Columbia currently cap interest rates and loan fees for many consumer installment loans, interest rate caps still vary greatly from state to state, rates are trending upward, and too many states allow lenders to pile on junk fees. “States must ensure that their laws protect consumers from predatory interest rates and hidden junk fees,” said Carolyn Carter, deputy director at the National Consumer Law Center and principal author of the report. “In the absence of rate limits at the federal level, state interest and fee caps are consumers’ primary defense against predatory interest rates and junk fees that hide the true cost of the loan.” #ProtectConsumers #StopTheDebtTrap #JunkFees

Lenders Panels I have never been able to work out the criteria deployed by lenders accepting or not accepting firms onto their panels. When I first set up, I was allowed on to all the mainstream panels without much difficulty and was even passed work by local firms who had been going decades, but had been denied access to the HBOS panel! There seemed no rhyme or reason for the decisions made by these lenders. Last week, the boot was on the other foot. Paragon SME Lending do not allow firms onto their panel unless: 1. They have at least four directors (well I have failed there) 2. And they are regulated by the SRA (now that I found offensive and discriminatory) There is an SRA-regulated firm in my region which meets both criteria, however, they are staffed mainly by graduates who are a bit green and have no clue about conveyancing. They are the sort of firm where you take a sharp intake of breath and have an inward groan when you realise they are on the other side of you on a transaction, because you know it will be difficult. It will be difficult, not for any specific reason, other than the staff do not know what they are doing! They are not supervised, they are not trained, they are left to work it out themselves. They stay on average for nine months or so before the very determined manage to find themselves gainful employment elsewhere. That firm is on Paragon's panel. They managed to tick the two boxes required by them and that was it, access allowed! So this Lender would prefer to deploy a tick-box mentality to their panel membership, rather than have a comprehensive review into who should be acting for them and why. I can guarantee that the aforementioned SRA-regulated firm is more likely to make a mistake than our firm is, just because of their approach to risk, yet the lender doesn't care about this and instead has imposed a carte blanche ban on conveyancing firms. Well, more fool them! Whether SRA-regulated or CLC-regulated, Lenders should surely be looking at the firm's claims history and how they actually run their conveyancing files before deciding whether they should be admitted onto the panel. A tick-box mentality in conveyancing will not do at any level! What do others think about this flagrant discrimination? Is it acceptable? Anyway, whether you are on or off the panels, have a wonderful day!

The state of California has had an interesting couple of years as it pertains to private lending. There have been a couple of court cases that have changed the landscape a bit. . I would be curious to get some attorneys' gut check if they had a scenario with the following hit their desk: - Foreclosing on a property (that is perfectly fine) But then add these few additional nuggets: - Charging Default Interest due to a payment default - Charging a Prepayment Penalty equating to 12 months worth of interest. The promissory note defines this clearly as a Waivable PENALTY and not a prepayment premium or interest guaranty. Not necessarily disallowable but can get tricky depending on the language and governing state. - Wrote the loan as a business purpose loan to an Estate to cure a previous default with the Executor of the Estate, signer of the loan, indicating they are also occupying the property as their primary residence. That one gets a little tricky but possibly an argument for the business purpose exemption. . I am NOT looking for legal advise but I feel these scenarios have popped on a stand alone basis over the past few years but I have not seen it all on one loan. . So here is my question: Nema Daghbandan, T. Robert Finlay, Michelle Rodriguez, and Christopher Donovan, Esq., if the lender were to continue with the foreclosure and take the property back without being flexible on the prepayment penalty and default interest, both of which would allow the borrower to complete a sale of the property, would this have the potential to make it into the next private lending CASE STUDY bucket or just another non-issue? . . . #SLCG #SLCapitalGroup #assetbasedlending

Our latest blog post discusses the recent 9th Circuit Court ruling affecting brokered loans in California, and how the proposed Senate Bill 1146 could restore usury exemptions. This is important for anyone involved in the commercial and consumer lending industry, as it outlines strategic considerations and potential impacts on loan modifications. Don't miss out on understanding these significant changes and how to navigate them effectively. FULL ARTICLE: https://hubs.li/Q02KpmpQ0 #BrokeredLoans #UsuryExemption #California #Lending #LoanModifications #Compliance #Financialservices

Stay updated on recent Borrower Defense to Repayment (BDR) developments! Thompson Coburn attorneys Scott Goldschmidt, Jeff Fink and Stephanie Cohan break down three recent BDR-related developments and share what institutions of #highereducation need to know. Check out our recent blog post here: https://bit.ly/3UfWMeh #highereducation #highered #educationallaw #BDR

The SAVE plan legal challenges are now officially heading to the U.S. Supreme Court. And the implications could go far beyond just the SAVE plan. Here's what borrowers should know.

Major changes were implemented in a recent Supreme court ruling. It's juicy! Let's talk about the highlights. 👉🏽 Congress has lifted sovereign immunity for FCRA claims against any federal agency furnishing information to a CRA and failing to properly investigate a consumer’s dispute . This is a major game changer. It ultimately means....👇🏽👇🏽 👉🏽 Sovereign immunity no longer prevents consumers from suing federal agencies for damages under the Fair Credit Reporting Act 🥳🥳🥳 (didn't we just talk about the student loan lenders being under 🔥 for this? 😏) 👉🏽 Money damages are available under FCRA §§ 1681n and 1681o against “[a]ny person” who willfully or negligently fails to comply with § 1681s-2(b). The term "person" now includes emphasis on any governmental/federal agency 👉🏽 Before this ruling the FCRA specifically allowed governmental agencies to obtain from CRAs limited identifying information about a consumer without a permissible purpose ❌️❌️❌️ outside of a few constraints such as eligibility determination for benefits or a license.... a federal agency must now have a permissible purpose for obtaining a consumer report and can be held liable for damages if found to request information for impermissible purpose 🙌🏽🙌🏽🙌🏽 So either the federal agencies start getting their house in order and buckle down...orrrr the number of lawsuits is about to significantlyyyy increase.

Let the CFPB know about the additional fees AMC and lenders tack on to appraisal fees, and/or cases where the borrowers pay $1000 and up, but ink pay the appraiser 60/40 split without providing a service. Finding an appraiser to complete the task in the cheapest manor possible is not a service, that just gouging from a middleman that does nothing more than hand paperwork from point a to point b. Now you have ANOW charging appraisers and additional $29 to have their own work be underwritten so the lender doesn’t have to. This only increases the appraisers fee which get passed down to the borrowers, but they didn’t get any more service from the appraiser. #appraiser #appraiserkife #loanofficer #broker

The Consumer Financial Protection Bureau was *busy* last week: The Bureau filed suit against Reliant Holdings, doing business as Horizon Card Servicing and various other names, as an apparent bait-and-switch offer targeting low-income consumers. According to the CFPB's complaint, the company purported to offer what appeared to be a general purpose credit card with a specified credit limit that required no credit check. In reality, the card could only be used at the company's Horizon Outlet store, which offered “a paltry, rotating selection of often overpriced or off-brand goods, and ancillary products, like a prescription card and roadside assistance, that had limited value and were rarely used by consumers.” The company also allegedly violated TILA by charging $299.40 in fees in the first year on credit lines as low as $500, well in excess of TILA’s prohibition on charging fees totaling more than 25% of the credit line during the first year after account opening. Last week also saw the CPFB reach a consent order with TD over widespread failures to accurately furnish data to credit bureaus and investigate consumer disputes, as required by FCRA and its implementing regulation, Reg V. Finally, the CFPB reached a proposed stipulated judgment and order in its long-running suit against student loan servicer Navient (formerly Sallie Mae), which will see the company pay $100 million in consumer redress, a $20 million civil money penalty, and be banned from certain student lending and servicing activities. Full details on these plus the latest in the Synapse bankruptcy case in Fintech Business Weekly through the link in the comments below.