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On March 30, the California Department of Financial Protection and Innovation (DFPI) announced it has permanently banned an individual and three companies he owns or controls for allegedly evading Property Assessed Clean Energy (PACE) laws. According to DFPI, the respondents, among other things, engaged in unfair and deceptive marketing tactics by “marketing their product as a ‘no-cost’ government-funded program” and “using an unenrolled company to advertise and solicit consumers for PACE financing.” DFPI claimed the respondents offered and sold PACE financing without enrolling with a PACE program administrator, failed to clearly and accurately inform consumers about how PACE financing works, and “misled consumers about their relationships with public agencies, lenders, PACE program administrators, and each other.” Under the terms of the consent order, the respondents agreed to cease and desist from offering PACE financing to consumers, agreed not to use “PACE” in business names, websites, marketing materials, or construction communications, and agreed not to seek future enrollment with any PACE program administrator.
On February 3, the California Department of Financial Protection and Innovation (DFPI) announced the first-ever enforcement action under its new structure against a student loan debt-relief company and an investigation into others. According to the order, DFPI alleges, among other things, that an Irvine-based debt-relief company violated the Telemarketing Sales Rule (TSR) and the California Consumer Financial Protection Law (CCFPL) by charging consumers fees ranging from $2,100 to $26,510 to “‘wipe away’ their student loans by getting them ‘dismissed’ or ‘discharged,’” which the company could not achieve. Moreover, consumers often financed the payment of the company’s fees, resulting in more debt and the company refused to issue refunds when requested by some consumers. DFPI alleges the company’s actions constitute unlawful and deceptive practices under the CCFPL and violated the TSR’s prohibition of charging fees before performing services. Lastly, DFPI alleges the company was required to obtain a license under the state’s Student Loan Servicing Act (SLSA) because its actions constitute “servicing” student loans under the statute. The order requires the company to refund the fees collected from 18 consumers by March 15 and to pay a civil penalty of $45,000.
DFPI also announced it issued subpoenas to four other student loan debt-relief companies to determine whether the companies engage in or have engaged in any unlawful, unfair, deceptive, or abusive acts or practices and whether their activities require a license. Responses to the subpoenas are due in March.
- Jonice Gray Tucker to join CFPB panel at CBA’s Washington Forum
- Jonice Gray Tucker to moderate “Pandemic relief response and lasting impacts on access, credit, banking, and equality” at the American Bar Association Business Law Section Spring Meeting
- Jeffrey P. Naimon to discuss "Post-pandemic CFPB exam preparation" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Making fair lending work for you" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Reading the tea leaves of President Biden’s initial financial appointees" at LendIt Fintech
- Moorari K. Shah to discuss “CA, NY, federal licensing and disclosure” at the Equipment Leasing & Finance Association Legal Forum
- Jonice Gray Tucker to discuss "Compliance under Biden" at the WSJ Risk & Compliance Forum
- Jonice Gray Tucker to discuss “The future of fair lending” at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference