Consumer Protection News February 2017

The following is a compendium of information that may be of interest to our AG offices who are dealing with consumer protection issues. Neither the National Association of Attorneys General nor the National Attorneys General Training & Research Institute expresses a view as to the accuracy of the matters, nor as to the position expounded by the authors of the hyperlinked materials.

Consumer Financial Protection Bureau

D. C. Circuit Court of Appeals Grants En Banc Rehearing

The DC Circuit Court of appeals has granted the request of the CFPB for a rehearing en banc of the ruing which previously held the CFPB’s structure to be unconstitutional. The issues to be addressed are whether the CFPB’s structure as a single-Director independent agency is consistent with Article II of the Constitution, and, if not, what would be the proper remedy; whether the court may avoid deciding the constitutional question given the panel’s ruling on the statutory issues in the case; and, if the court determines in Lucia v SEC that the administrative law judge who handled the case was an inferior officer rather than an employee, what is the appropriate disposition of this case.

The DC Circuit had previously rejected petitions by 17 Democratic state attorneys general and two Democratic lawmakers who asked to intervene in the CFPB’s appeal over whether its leadership should remain independent or fall under the purview of the president.

CFPB Monthly Complaint Report, Vol. 19 (February 2017) Available

Available here

Enforcement Actions

Prospect Mortgage LLC

The CFPB has entered a consent order involving Prospect Mortgage, LLC, a major mortgage lender, for paying illegal kickbacks for mortgage business referrals. Also involved in the consent order were two real estate brokers and a mortgage servicer that took illegal kickbacks from Prospect.

Navient Corporation

The CFPB has sued Navient Corporation, the nation’s largest servicer of both federal and private student loans, for systematically and illegally failing borrowers at every stage of repayment. The Bureau seeks to recover significant relief for the borrowers harmed by alleged illegal servicing failures.

For information about other enforcement actions, go to the CFPB Enforcement Actions page.

Federal Trade Commission

Maureen Ohlhausen Newly Appointed Acting Head of FTC

Maureen K. Ohlhausen has been named as Acting Chairman of the Federal Trade Commission by a White House Order. Ohlhausen was sworn in as a Commissioner of the Federal Trade Commission on April 4, 2012, to a term that expires in September 2018.

FTC has New Acting Consumer Protection Bureau Director

Thomas Pahl, an Arnall Golden Gregory LLP partner, has been appointed acting director of the U.S. Federal Trade Commission's Bureau of Consumer Protection, taking over for departing director Jessica Rich, acting Chairwoman Maureen K. Ohlhausen said Wednesday. Rich left the agency after 26 years of service on February 17.

Summary on Debt Collection Practices

The FTC has sent a summary of its 2016 work on debt collection practices to the CFPB for inclusion in the CFPB’s annual report to Congress on the Fair Debt Collection Practices Act. The report is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Western Union Settlement

Western Union has agreed to pay $586 million to settle FTC and Department of Justice charges that the company allowed scammers to use its money transfer system to collect money from their victims. The payment will be used to redress defrauded consumers. As part of the settlement, Western Union is also required to implement an effective anti-fraud campaign.

NAAG

NAAG Consumer Protection Spring Conference

The 2017 Spring Consumer Protection Conference will be held May 15 – 17 in Washington, DC. While the agenda is still under development, regulator sessions will most likely include such matters as Targeting Consumer Outreach, Class Action Update, Case Study – A Look Inside a Multistate Case, Navigating the Multistate Landscape, Electronic Evidence, The Psyche of Elder Scams, and Legal Theories in a Sharing Economy. Federal agency briefings and presentations will also be included. Please note that the Multistate Roundtable (an update on the status ofmultistate groups and the various working groups) will be held on Monday morning, May 15. The multistate session is restricted to NAAG member staff only.

On Monday from 12 Noon until 7:00 PM, the private sector is invited to attend the conference. The open portion of the Spring Consumer Protection Conference agenda promises to address pressing and relevant issues in consumer protection. Open sessions will most likely include discussions concerning Disruptive Technologies, Class Action and CAFA, Spokeo One Year Later, Effectiveness of Notices and Disclaimers, and Social Media Marketing.


Mark Neil is the Editor of Consumer Protection News and may be reached at 202-326-6019. Consumer Protection News is a publication of the National Association of Attorneys General (NAAG). Any use and/or copies of this newsletter in whole or in part must include the customary bibliographic citation. NAAG retains copyright and all other intellectual property rights in the material presented in this publication. For content submissions or to contact the editor directly, please e-mail mneil@naag.org.

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