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NYDFS issues RFI on private student loan refinancing
On November 8, NYDFS issued a request for information (RFI) to student loan advocates, lenders, regulators, servicers, and other stakeholders, seeking information regarding private student loan refinancing in New York. The Private Student Loan Refinancing Task Force, tasked with “study[ing] and analyz[ing] ways lending institutions that offer non-federal student loans to students of New York institutions of higher education can be incentivized and encouraged to create student loan refinance programs,” issued questions to solicit information from stakeholders to inform a forthcoming report. According to the announcement, the Task Force is seeking responses to questions concerning private sector refinancing of student loans. The questions include, among other things: (i) “What options are available for student loan borrowers to refinance private student loans both in New York State and outside the state?”; (ii) “What options are available for student loan borrowers to refinance federal student loans both in New York State and outside the state?”; (iii) “What is the volume of private student loans refinanced, the terms of the borrowers’ prior loans, the terms of the borrowers’ refinancing loans, the unmet need for student loan refinancing, and the impact of these refinancing loans in New York and nationwide?”; (iv) “What is the volume of federal student loans refinanced, the terms of the borrowers’ prior loans, the terms of the borrowers’ refinancing loans, the unmet need for student loan refinancing, and the impact of these refinancing loans in New York and nationwide?”; and (v) “What publicly available data should the Task Force review? Is there privately owned data that could be made available to the Task Force?” Responses are due by December 8.
Mortgage servicer must pay $4.5 million in payment service fee suit
On November 7, the U.S. District Court for the Southern District of West Virginia granted final approval of a class action settlement, resolving allegations that a defendant mortgage servicer charged improper fees for optional payment services in connection with mortgage payments made online or over the telephone. The plaintiffs' memorandum of law in support of its motion for final approval of the settlement alleges the defendant engaged in violations of the West Virginia Consumer Credit Protection Act, breach of contract, and unjust enrichment with respect to the fees. According to the memorandum, before deduction of attorneys’ fees and expenses, administrative costs, and any service award, the $4.5 million settlement fund represents approximately $216 per fee paid to the defendant by the putative class members. The court also approved $1.5 million in attorney’s fees, plus $4,519.20 in expenses, along with a $15,000 service award for the settlement class representative.
District Court approves $14 million wireless rates settlement
On November 8, the U.S. District Court for the Northern District of California granted final approval to a $14 million settlement resolving allegations that a telecommunications company made misleading claims regarding its administrative fees. According to the plaintiffs’ memorandum of points and authorities in support of motion for preliminary approval of class settlement, current and former wireless-service customers of the defendant (plaintiffs) with post-paid wireless service plans were charged an improper administrative fee. The plaintiffs alleged, generally, that the defendant’s representations and advertisements regarding the monthly price of its post-paid wireless service plans were misleading because the prices did not include the administrative fee, and that the defendant implemented and charged the administrative fee in a deceptive and unfair manner. According to the terms of the $14 million settlement agreement, $3.5 million of the award will cover attorney fees and costs, with additional funds allocated to cover litigation expenses.
North Carolina Supreme Court orders appeals court to review HAMP fraud claims
On November 4, the Supreme Court of North Carolina determined that an appeals court erred by remanding a case concerning a defendant bank’s Home Affordable Modification Program to a trial court with instructions to make factual findings and conclusions of law on the defendant’s motion to dismiss. Plaintiffs sued the defendant alleging fraud and other related claims arising out of the bank’s mortgage modification program. The trial court dismissed the claims for failure to state a claim pursuant to North Carolina’s Rule of Civil Procedure 12(b)(6), after concluding that plaintiffs’ claims were time barred and “that ‘the claims of all [p]laintiffs who were parties to foreclosure proceedings [were] barred by the doctrines of res judicata and collateral estoppel.’” Plaintiffs appealed. A divided panel of the Court of Appeals remanded the case to the trial court claiming that “it could not ‘determine the reason behind the grant’ and could not ‘conduct a meaningful review of the trial court’s conclusions of law.’” The North Carolina Supreme Court countered, however, that there exists “no legal basis or practical reason for the Court of Appeals to remand the case to the trial court to make factual findings and conclusions of law” as “a trial court is not required to make factual findings and conclusions of law to support its order unless requested by a party”—a request neither party made. According to the North Carolina Supreme Court, the appeals court erred by not conducting a de novo review of the sufficiency of the plaintiffs’ allegations. The North Carolina Supreme Court ordered the appeals court to address whether the plaintiffs’ allegations, if treated as true, are sufficient to state a claim upon which relief can be granted.
District Court certifies class in FDCPA suit
On November 4, the U.S. District Court for the District of New Jersey granted a plaintiffs’ motion for class certification in an FDCPA suit related to credit reporting language used in collection letters. According to the opinion, the plaintiffs received collection letters from the defendant with a statement that read: “Our records indicate there is still a balance on this past due account. Please respond to this letter within seven days or we may take additional collection efforts. The creditor shown above has authorized us to submit this account to the nationwide credit reporting agencies. As required by law, you are hereby notified that a negative credit report reflecting your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit obligations.” The plaintiffs alleged FDCPA violations against the defendant, claiming that the letters constituted false and misleading collection efforts because the defendants did not intend to report the debts to credit reporting agencies within seven days of the letters’ receipt, as the defendant’s policy was to report debts “approximately sixty (60) days from placement absent contract instructions from its client.” The court noted that the collection letter in question was sent to 984 individuals, meeting the numerosity component for class certification. The court also held that, because all members of the class share the same FDCPA claim, the commonality and predominance components of certification were satisfied. The court also ruled that typicality, adequacy, ascertainability, and superiority components were met, and certified the class.
District Court preliminary approves $4.3 million data breach settlement
On November 4, the U.S. District Court for the Eastern District of Michigan granted preliminary approval of a $4.3 million class action settlement regarding a data breach, following the filing of the plaintiffs’ unopposed motion for preliminary approval of class action settlement. After a plaintiff consolidated her suit with other similar lawsuits, the plaintiff class sued the defendant for negligence, unjust enrichment, and breach of contract, alleging their personal information was stolen from the defendant during a malware attack due to lack of cybersecurity measures. The settlement provides for, among other things, three years of free credit-monitoring services for the plaintiff class, up to $2,500 per member to cover out-of-pocket expenses related to the breach, up to $80 per member to cover lost time remedying issues related to the breach, $75 per member for California residents for claims under state statutes, and a year of password-managing services. The plaintiffs are seeking service awards of $1,500 for each of the 15 representative plaintiffs. The motion also noted that class counsel will ask the court for just over $1.4 million in attorneys’ fees to be deducted from the settlement fund.
Massachusetts settles with debt payment processor
On November 7, the Massachusetts attorney general announced a settlement with a payment processing company to resolve claims that it provided substantial assistance to a debt settlement provider engaged in unlawful business practices that charged consumers premature and inflated fees in violation of state and federal law. According to an assurance of discontinuance filed in Suffolk Superior Court, the company processed settlement and fee payments for consumers enrolled in various debt settlement programs, including those offered by a debt settlement provider that was previously fined $1 million by the AG’s office for allegedly harming financially-distressed consumers. (Covered by InfoBytes here.) The newest settlement resolves claims that the company transferred unlawful fee payments to the debt settlement provider despite having knowledge of the alleged misconduct and even after the provider was sued by the AG’s office. Without admitting any facts, liability, or wrongdoing, the company has agreed to pay $600,000 to the Commonwealth, and will, according to the announcement, “make meaningful business practice changes that would prevent it from transferring untimely fees from any Massachusetts consumer account to any debt settlement company.”
Pennsylvania amends privacy bill
On November 3, the Pennsylvania governor signed SB 696 to amend the Breach of Personal Information Notification Act. The bill, among other things, prohibits employees of the Commonwealth from using non-secured Internet connections. The bill also includes data storage policy provisions, which establish that an entity that maintains, stores, or manages computerized data on behalf of Pennsylvania that constitutes personal information must develop a policy to govern reasonably proper storage of the personal information. The bill further notes that a goal of the policy must be to reduce the risk of future breaches of the security of the system. The bill is effective 180 days after approval by the governor.
OFAC sanctions individuals and entities tied to ISIS
On November 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against four members of an Islamic State of Iraq and Syria (ISIS) cell operating in South Africa, along with eight companies owned, controlled, or directed by the individuals in the ISIS cell. According to OFAC, the individuals provided technical, financial, or material support to the terrorist group. As a result of the sanctions, all property and interests in property belonging to the sanctioned individuals and entities, and of “any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons” that are subject to U.S. jurisdiction are blocked. U.S. persons are also generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons. Persons that engage in certain transactions with the designated individuals or entities may themselves be exposed to designation, OFAC warned, adding that foreign financial institutions that knowingly conduct or facilitate significant transactions to any of the sanctioned persons could also be subject to U.S. sanctions.
OFAC sanctions Haitian politicians for narcotics trafficking
On November 4, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), along with the Government of Canada, announced sanctions pursuant to Executive Order 14059 against two Haitian politicians for having allegedly “engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production.” OFAC said it coordinated its efforts closely with the Drug Enforcement Administration on this designation. As a result, all property, and interests in property of the designated individuals and “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” OFAC’s regulations also generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of designated or otherwise blocked persons. OFAC also warned that “persons that engage in certain transactions with the individuals designated today may themselves be exposed to sanctions or subject to an enforcement action. Furthermore, unless an exception applies, any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for the individuals designated today could be subject to U.S. sanctions.”