Consumer Finance Litigation Blog | Burr & Forman LLP https://www.burr.com/consumer-finance-litigation/ Mon, 12 Feb 2024 00:54:06 -0500 District Court Rules that Consumer’s Claims Under Georgia’s Fair Business Practices Act Relating to Sale and Finance of Automobile are Preempted https://www.burr.com/consumer-finance-litigation/district-court-rules-that-consumers-claims-under-georgias-fair-business-practices-act-relating-to-sale-and-finance-of-automobile-are-preempted Alan D. Leeth district-court-rules-that-consumers-claims-under-georgias-fair-business-practices-act-relating-to-sale-and-finance-of-automobile-are-preempted Tue, 07 Nov 2023 09:00:01 -0500 The United States District Court for the Northern District of Georgia has recently ruled that a consumer cannot maintain a claim under the Georgia Fair Business Practices Act (GFBPA) where the claim arises out of a loan transaction that is subject to state and federal regulations. In Baughman v. Truist Bank, No. 123CV03199JPBJKL, 2023 WL 6940698 (N.D. Ga. Sept. 19, 2023), plaintiff purchased a vehicle by executing a retail installment sale contract, which was later assigned to Truist Bank. The contract provided that the dealer would obtain an aftermarket warranty on the vehicle and ...

]]> CFPB Seeks to Remove Medical Bills from Credit Reports https://www.burr.com/consumer-finance-litigation/cfpb-seeks-to-remove-medical-bills-from-credit-reports Kristen Peters Watson cfpb-seeks-to-remove-medical-bills-from-credit-reports Wed, 27 Sep 2023 09:00:02 -0400 On September 21, 2023, the CFPB announced it is undertaking a rulemaking process to remove medical bill tradelines from consumer reports and prohibit creditors from relying on medical bills during underwriting.

Under the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) and the Dodd-Frank Act, the CFPB is required to consult with representatives of small entities that would likely be directly impacted by the CFPB’s proposed regulations. To that end, the Small Business Advisory Review Panel for Consumer Reporting Rulemaking was formed to address consumer ...

]]> Supreme Court: District Court Must Stay its Proceedings While an Interlocutory Appeal is Taken on the Question of Arbitrability https://www.burr.com/consumer-finance-litigation/supreme-court-issues-ruling-that-promotes-arbitration-agreements-by-requiring-an-automatic-stay-of-proceedings-in-the-case-of-an-interlocutory-appeal Alan D. Leeth, Katherine R. "Kiki" Rogers supreme-court-issues-ruling-that-promotes-arbitration-agreements-by-requiring-an-automatic-stay-of-proceedings-in-the-case-of-an-interlocutory-appeal Mon, 26 Jun 2023 09:00:03 -0400 On June 23, 2023, in Coinbase v. Bielski, the Supreme Court issued a ruling holding that a district court must stay its proceedings while an interlocutory appeal of the issue of arbitration is ongoing. The 5-4 decision resolves a circuit split on the issue, and has far-reaching implications on motions to compel arbitration.

The case arose from a putative class action brought by plaintiff Abraham Bielski, on behalf of Coinbase users, in the U.S. District Court for the Northern District of California. The defendant Coinbase, an online cryptocurrency platform, file a motion to compel ...

]]> Eleventh Circuit Confirms Investigation into Dispute Involving Identity Theft Was Reasonable and Affirms Summary Judgment on FCRA Claim https://www.burr.com/consumer-finance-litigation/eleventh-circuit-confirms-investigation-into-dispute-involving-identity-theft-was-reasonable-and-affirms-summary-judgment-on-fcra-claim Kristen Peters Watson eleventh-circuit-confirms-investigation-into-dispute-involving-identity-theft-was-reasonable-and-affirms-summary-judgment-on-fcra-claim Fri, 16 Jun 2023 09:00:04 -0400 In Milgram v. Chase Bank USA, N.A., --- F.4th ---, 2023 WL 3874276 (11th Cir. June 8, 2023), the Eleventh Circuit affirmed the district court’s dismissal of plaintiff’s FCRA claim based on the bank’s alleged failure to conduct a reasonable investigation into a consumer’s dispute after the consumer provided proof of a criminal judgment in an identity theft matter.

Plaintiff filed suit asserting a FCRA claim based on the bank’s allegedly unreasonable investigation into her credit dispute. One of plaintiff’s employees had opened a few credit cards in plaintiff’s name ...

]]> Evasive Deposition Tactics by the CFPB Supported Dismissal as a Sanction, Affirmed by Eleventh Circuit https://www.burr.com/consumer-finance-litigation/evasive-deposition-tactics-by-the-cfpb-supported-dismissal-as-a-sanction-affirmed-by-eleventh-circuit Ryli Wallace Leader, Alan D. Leeth evasive-deposition-tactics-by-the-cfpb-supported-dismissal-as-a-sanction-affirmed-by-eleventh-circuit Thu, 15 Jun 2023 09:00:05 -0400 On Monday, the Eleventh Circuit affirmed sanctions levied by the United States District Court for the Northern District of Georgia against the Consumer Financial Protection Bureau due to its conduct during discovery. The CFPB initiated the lawsuit in Consumer Financial Protection Bureau v. Brown, --- F.4th ---, 2023 WL 3939432 (11th Cir. June 12, 2023) against eighteen different defendants for allegedly engaging in or substantially assisting a fraudulent debt collection scheme. Thirteen of the defendants are alleged to have directly participated, while five of the defendants ...

]]> Seventh Circuit Holds Bankruptcy Debtor Has No Standing to Assert FDCPA Claims https://www.burr.com/consumer-finance-litigation/seventh-circuit-holds-bankruptcy-debtor-has-no-standing-to-assert-fdcpa-claims Alan D. Leeth, Allyson R. Mancuso seventh-circuit-holds-bankruptcy-debtor-has-no-standing-to-assert-fdcpa-claims Mon, 01 May 2023 09:00:06 -0400 In Pucillo v. National Credit Systems, Inc., No. 21-3131, 2023 WL 3090627 (7th Cir. Apr. 26, 2023), the Seventh Circuit Court of Appeals affirmed the district court's dismissal of the plaintiff's FDCPA claims for lack of Article III standing. The Seventh Circuit held that the plaintiff, a Chapter 7 bankruptcy debtor, did not allege a concrete injury where he asserted that the defendant's collection letters "confused," "scared," and "alarmed" him.

Factual and Procedural Background

Plaintiff Kenneth Pucillo, formerly known as Kenneth Lock, filed for Chapter 7 bankruptcy in May ...

]]> The Second Circuit Weighs in on the Constitutionality of the CFPB’s Funding Structure, Disagreeing with the Fifth Circuit https://www.burr.com/consumer-finance-litigation/the-second-circuit-weighs-in-on-the-constitutionality-of-the-cfpbs-funding-structure-disagreeing-with-the-fifth-circuit Ryli Wallace Leader, Alan D. Leeth the-second-circuit-weighs-in-on-the-constitutionality-of-the-cfpbs-funding-structure-disagreeing-with-the-fifth-circuit Fri, 24 Mar 2023 09:00:07 -0400 In a recent opinion, the Second Circuit considered a second challenge to the funding structure of the CFPB, upholding it as constitutional.

On October 19, 2022, this issue was first considered by the Fifth Circuit in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau, 51 F.4th 616 (2022). There, the court determined the payment structure established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376—which grants discretion to the director of the CFPB to draw funding for the Bureau ...

]]> The U.S. Supreme Court Granted Certiorari to Determine Whether the CFPB’s Funding Structure Violates the Appropriations Clause of the United States Constitution https://www.burr.com/consumer-finance-litigation/the-u-s-supreme-court-granted-certiorari-to-determine-whether-the-cfpbs-funding-structure-violates-the-appropriations-clause-of-the-united-states-constitution Ryli Wallace Leader, Alan D. Leeth the-u-s-supreme-court-granted-certiorari-to-determine-whether-the-cfpbs-funding-structure-violates-the-appropriations-clause-of-the-united-states-constitution Mon, 27 Feb 2023 09:00:08 -0500 On Monday, February 27, 2023, the United States Supreme Court granted the petition for a writ of certiorari in the case Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd., No. 22-448, agreeing to hear the appeal filed by the CFPB.

In its petition, the CFPB sought review of the opinion rendered by the United States Court of Appeals for the Fifth Circuit on October 19, 2022, in which the Fifth Circuit struck down Congress’s mechanism for funding the CFPB and, consequently, vacated the Payday Lending Rule promulgated by the CFPB in 2017 ...

]]> The CFPB and New York Attorney General’s Office Levy New Attack On Subprime Indirect Auto Financing in Complaint Filed Against Credit Acceptance Corporation https://www.burr.com/consumer-finance-litigation/the-cfpb-and-new-york-attorney-generals-office-levy-new-attack-on-subprime-indirect-auto-financing-in-complaint-filed-against-credit-acceptance-corporation Matthew T. Mitchell the-cfpb-and-new-york-attorney-generals-office-levy-new-attack-on-subprime-indirect-auto-financing-in-complaint-filed-against-credit-acceptance-corporation Fri, 17 Feb 2023 09:00:09 -0500 On January 4, 2023, the Consumer Financial Protection Bureau (CFPB) and New York Attorney General (“NYAG”) (collectively, the “Plaintiffs”) filed a complaint in the Southern District of New York against Credit Acceptance Corporation, one of the largest subprime indirect auto financing companies in the country, for alleged misconduct in the origination and servicing of its auto retail installment contracts. While the Complaint asserts several untested legal theories, the unquestioned headliner is its allegation that Credit Acceptance incentivizes dealers to ...

]]> Third Circuit Finds Vacatur of Default Judgment Does Not Make Collection Activity Retroactively Unlawful https://www.burr.com/consumer-finance-litigation/third-circuit-finds-vacatur-of-default-judgment-does-not-make-collection-activity-retroactively-unlawful Alan D. Leeth third-circuit-finds-vacatur-of-default-judgment-does-not-make-collection-activity-retroactively-unlawful Wed, 18 Jan 2023 09:00:10 -0500 On January 11, 2023, the Third Circuit held that attempting to collect on a default judgment did not constitute using "'false, deceptive, or misleading' representations in connection with collecting the judgment" if the default judgment was later vacated. Lowe v. FBCS, Inc., No. 21-3307, 2023 WL 154970, at *1 (3rd Cir. Jan. 11, 2023).

Barbara Lowe (Lowe) filed a lawsuit claiming FBCS, Inc. (FBCS) and LVNV Funding, LLC (LVNV) (collectively, Defendants) violated the Fair Debt Collection Practices Act (FDCPA) by calling her to collect on a default judgment later vacated and declared ...

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