Skip to main content
Menu Icon Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Filter

Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • CFPB guidance on automobile repossession warns on UDAAPs

    Federal Issues

    On February 28, the CFPB released Bulletin 2022-4 regarding the repossession of vehicles and the potential for violations of Dodd-Frank’s prohibition on engaging in unfair, deceptive, or abusive acts or practices (collectively, “UDAAPs”) when repossessing vehicles. According to the Bulletin, “[t]he Bureau intends to hold loan holders and servicers accountable for UDAAPs related to the repossession of consumers’ vehicles.” To prevent UDAAPs, the Bureau noted that entities should, among other things: (i) review their policies and procedures regarding repossession and cancellation of repossession; (ii) ensure prompt communications between servicers and repossession service providers when a repossession is canceled and monitor compliance with cancellations; (iii) utilize monitoring of wrongful repossessions through routine oversight and audits of customer communications; and (iv) ensure corrective action programs are in place to address any violations and reimburse consumers for costs incurred as a result of unlawful repossessions. Additionally, the Bulletin suggests that entities should monitor service providers and any force-placed collateral protection insurance programs to verify that consumers are not charged for unnecessary force-placed insurance. According to the CFPB’s blog post released the same day, “the Bureau is closely watching the auto lending market. Auto loans are already the third largest consumer credit market in the United States at over $1.46 trillion outstanding, double the amount from ten years ago.”

    Federal Issues CFPB Dodd-Frank UDAAP Auto Finance Consumer Finance Repossession

    Share page with AddThis
  • District Court: No private right of action under PA’s Motor Vehicle Sales Finance Act

    Courts

    On May 20, the U.S. District Court for the Eastern District of Pennsylvania partially granted defendants’ motion for summary judgment in an action concerning alleged violations of the Pennsylvania Motor Vehicle Sales Finance Act (MVSFA) and the FCRA. The plaintiff filed an action against the defendants (an auto finance company and the three major consumer reporting agencies (CRAs) alleging he was unable to obtain credit and suffered loss of work, car rental expenses, and emotional distress following the repossession and sale of his vehicle after he allegedly breached his retail installment sale contract by exposing his vehicle to a lien for accumulated storage charges at a repair facility while waiting for a replacement part to arrive. After the vehicle was repossessed, the plaintiff sent letters to the CRAs disputing the reported information and asked that notations, including “voluntary surrender,” be removed from his credit file. According to the plaintiff, the disputed information was removed from his file well outside the 30-day timeframe required under the FCRA to reinvestigate and delete inaccurate information. The plaintiff also alleged that the auto finance company violated the MVSFA’s provisions governing notice of repossession. Upon review, the court granted defendants’ request for summary judgment on the MVSFA claim, agreeing with the auto finance company that the statute’s repossession notice provisions do not confer a private right of action. However, the court denied summary judgment on the FCRA claim, writing that “the record reflects genuine disputes of material fact as to whether [the auto finance company] reported inaccurate information and whether it reasonably investigated [p]laintiff’s disputes.”

    Courts State Issues Auto Finance FCRA Repossession

    Share page with AddThis
  • Texas updates guidance for property tax lenders to work with consumers

    State Issues

    On February 18, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging property tax lenders to work with consumers during the Covid-19 crisis (previously discussed hereherehere, and here) Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, and review policies for fees, late charges, delinquency practices, and repossessions. The guidance also: (i) reminds licensees of legal requirements for using electronic signatures, and (ii) continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through March 31, 2021, unless withdrawn or revised.

    State Issues Covid-19 Texas Consumer Finance Lending Repossession Licensing ESIGN

    Share page with AddThis
  • Maryland extends restrictions on repossessions and residential foreclosures

    State Issues

    On December 17, 2020, the governor of Maryland issued an executive order that further prohibits certain repossessions, suspends foreclosures of occupied residential property absent adherence to specific procedural protections, including those provided by the federal CARES Act.  The foreclosure suspension is in effect until the “re-start date,” which is either (1) January 31, 2021, or (2) such later date as established by the commissioner of financial regulation, not to be more than 30 days after the state of emergency is terminated.

    State Issues Covid-19 Maryland Repossession Auto Finance Mortgages Foreclosure CARES Act

    Share page with AddThis
  • Texas Office of Consumer Credit updates guidance urging property tax lenders to work with borrowers

    State Issues

    On November 16, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging property tax lenders to work with consumers during the Covid-19 crisis (previously discussed herehere, and here) Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, and review policies for fees, late charges, delinquency practices, and repossessions. The guidance also: (i) reminds licensees of legal requirements for using electronic signatures, and (ii) continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through December 31, 2020, unless withdrawn or revised.

    State Issues Covid-19 Texas Consumer Credit Licensing Repossession ESIGN

    Share page with AddThis
  • Texas Office of Consumer Credit updates guidance urging property tax lenders to work with borrowers

    State Issues

    On October 27, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging property tax lenders to work with consumers during the Covid-19 crisis (previously discussed here and here) Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, and review policies for fees, late charges, delinquency practices, and repossessions. The guidance also: (i) reminds licensees of legal requirements for using electronic signatures, and (ii) continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through November 30, 2020, unless withdrawn or revised.

    State Issues Covid-19 Consumer Credit Licensing Repossession ESIGN

    Share page with AddThis
  • Texas Office of Consumer Credit updates guidance urging credit access businesses to work with borrowers

    State Issues

    On October 27, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging credit access businesses to work with consumers during the Covid-19 crisis (previously covered here, here, and here). Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, and review policies for fees, late charges, delinquency practices, and repossessions. The guidance also: (i) reminds licensees of legal requirements for using electronic signatures, and (ii) continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through November 30, 2020, unless withdrawn or revised.

    State Issues Covid-19 Texas Consumer Credit Licensing Repossession ESIGN

    Share page with AddThis
  • Texas Office of Consumer Credit updates guidance urging motor vehicle sales finance licensees to work with borrowers

    State Issues

    On October 27, the Texas Office of the Consumer Credit Commissioner updated its advisory bulletin urging motor vehicle sales finance licensees to work with consumers during the Covid-19 crisis (previously covered herehere, here, here, and here ). Among other measures, the regulator urges licensees to increase consumer communication regarding the effects of Covid-19 for licensees, work out modifications for payment difficulties, and review policies for fees, late charges, delinquency practices, and repossessions. The guidance also: (i) reminds licensees of legal requirements for using electronic signatures and (ii) continues to permit licensees to conduct activity from unlicensed locations, subject to certain conditions. The guidance is in effect through November 30, 2020, unless withdrawn or revised.

    State Issues Covid-19 Texas Consumer Credit Auto Finance Licensing Repossession ESIGN

    Share page with AddThis
  • Maryland issues new executive order regarding foreclosures and repossessions

    State Issues

    On October 16, 2020, the Maryland governor issued Executive Order 20-10-16-01 to amend and restate an April 3 executive order regarding foreclosures and repossessions (previously covered here). The executive order, among other things: (i) suspends requirements regarding the repossession of any chattel home by self-help until the state of emergency is terminated; (ii) suspends the sale of certain properties unless certain notices are provided, (iii) suspends the operation of the commissioner’s Notice of Intent to Foreclose Electronic System, and discontinues acceptance of Notices of Intent to Foreclose until January 4, 2021, and (iv) suspends any judgment for possession or repossession, or warrant for restitution of possession or repossession of residential, commercial, or industrial real property, if the tenant can demonstrate that he/she suffered a substantial loss of income resulting from Covid-19 or related events. Maryland’s commissioner of financial regulation issued a Foreclosure Update and Repossession Update outlining the executive order.

    State Issues Covid-19 Maryland Mortgages Foreclosure Auto Finance Repossession

    Share page with AddThis
  • Massachusetts AG sues auto lender for deceptive loans

    State Issues

    On August 31, the Massachusetts attorney general announced an action against a national auto lender for allegedly making unfair and deceptive auto loans and engaging in unfair debt collection practices. According to the complaint, since 2013, the auto lender allegedly made “high-risk high-interest subprime” loans to Massachusetts borrowers who the lender “knew or should have known were unable to repay their loans,” in violation of the Massachusetts Consumer Protection Act. Additionally, the attorney general asserts that consumers were subject to “hidden finance charges,” which resulted in consumers’ actual interest rates being higher than the state’s usury ceiling of 21 percent. Moreover, the lender’s collection employees allegedly “harassed” consumers in default by calling them “as often as eight times a day,” when state law limits collection calls to no more than two calls per week, sent improper repossession notices, and failed to use the correct fair market value when calculating deficiency amounts. Lastly, the attorney general argues that the lender used “false or misleading statements” concerning the characteristics of the loans packaged and securitized to investors.

    The attorney general is seeking a permanent injunction, restitution, and civil penalties.

    State Issues State Attorney General Auto Finance UDAP Debt Collection Repossession

    Share page with AddThis

Pages