FCC Approves New TCPA Rules


Today, the FCC ruled on 21 long-standing petitions and letters seeking clarifications of the Telephone Consumer Protection Act. FCC Chairman Tom Wheeler’s proposed rules were approved with a 3-2 vote.  While it remains unclear when the FCC will publish the new ruling, it is clear the new rules are mostly bad for businesses which use automatic telephone dialing technology.

The majority of the Commission did not distinguish scammers from legitimate businesses. Commissioner Jessica Rosenworcel cited scammer calls from “Rachel” of the mysterious “Card Member Services” as support for her decision to approve the new rules. Chairman Wheeler cited the 214,000 consumer complaints about robocalls, but gave no breakdown as to how many of these complaints involved con artists and how many related to businesses calling, for example, to collect debt. Continue reading this entry

CFPB Extends TRID Effective Date to October 1


The Consumer Financial Protection Bureau (“CFPB”) announced that it would provide mortgage lenders with additional time to prepare for the highly anticipated TILA-RESPA Integrated Disclosures (“TRID”). Since the issuance of TRID’s final regulations in November 2013, mortgage lenders have been frantically preparing for its effective date of August 1, 2015. Generally speaking, TRID will consolidate mortgage disclosures forms currently required by Truth-in-Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”) into only two forms—the Loan Estimate and the Closing Disclosure—purportedly to assist buyers in understanding the home buying process. According to the CFPB’s Director Richard Corday, the agency now intends to push back the TRID’s effective date to October 1, 2015 due to an unexplained “administrative error.” This announcement comes shortly after the agency declared that for a short period after the TRID’s effective date it would consider a lender’s efforts to comply with new disclosures when enforcing TRID.

CFPB Director Cordray Issues First-Ever Agency Appellate Decision in RESPA Case


The Director of the federal Consumer Financial Protection Bureau (CFPB), Richard Cordray, issued a decision yesterday in the first appeal of a Bureau administrative enforcement action.

Cordray’s decision upholds in part, and reverses in part, a 2014 Administrative Law Judge (ALJ) decision which held that PHH Corp. (“PHH”) violated the Real Estate Settlement Procedures Act (RESPA) by accepting payments for the referral of a settlement service business pursuant to a captive reinsurance arrangement.

CFPB Enforcement counsel (Enforcement) had alleged that PHH participated in a “mortgage insurance kickback scheme” in violation of RESPA for over a decade. Enforcement claimed that PHH, a mortgage lender, referred borrowers to certain mortgage insurers, who in exchange for the referrals, agreed to purchase reinsurance from a PHH subsidiary at supposedly inflated rates, taking the reinsurance fees as kickbacks. Enforcement also alleged that PHH pressured the mortgage insurers into participating in the arrangement and steered business to them “even when it knew the prices [the mortgage insurers] charged were higher than competitors’ prices.” The PHH matter followed a series of settlements between the CFPB and various mortgage insurers settling similar Enforcement allegations.

For more information on the decision, please visit our official update page. 

A Bit of Grace

The Consumer Financial Protection Bureau (CFPB) has finally agreed to bend under the strain of numerous requests from financial industry participants and 255 bi-partisan House members and 41 senators, who requested that the CFPB delay the implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosures (TRID) requirements.  Although the TRID will still go into effect as of August 1, 2015, the CFPB has agreed to take into account the lenders’ good faith efforts to comply with the TRID.

The CFPB’s announcement should not be interpreted to mean that lenders are not required to use the new forms.  Lenders must comply with the new Rules and use the TRID forms as of August 1, 2015, but now lenders can breathe a bit easier knowing that they will have time to test their systems and work out any technical glitches that may arise with the use of the new forms.

The CFPB has a section on its website dedicated to the TRID implementation, including guidance documents and example forms.  Please see http://www.consumerfinance.gov/regulatory-implementation/tila-respa/.

Although the CFPB has claimed that its guidance documents and the commentary to the new Rules provide all of the answers, we have found situations in which there is not a clear answer on where to include certain information on the TRID.  Thus, it is reasonable to expect that the CFPB may be providing additional guidance and clarifications regarding the Rules after the August 1 implementation date.  Stay posted for any updates.

FCC Chairman Proposes New TCPA Rules


The FCC is ready to rule on long-standing petitions seeking clarifications of the Telephone Consumer Protection Act and related FCC regulations. On May 27, 2015, FCC Chairman Tom Wheeler circulated a proposed regulatory ruling to fellow commissioners, which would address issues raised in more than 20 pending petitions. The fact sheet summarizing the chairman’s proposal foreshadows bad news for legitimate businesses using automatic telephone dialing technology.

The fact sheet lumps scammer calls like those from perky “Rachel” of the mysterious and ambiguous “Cardholder Services” with those from legitimate businesses. The fact sheet cites the 214,000 consumer complaints about robocalls. No breakdown is given as to how many of these complaints involved con artists and how many related to businesses calling, for example, to collect debt. The tone of the fact sheet provides no comfort. Its preamble states the plan is to “close loopholes and strengthen consumer protections.”

The FCC will vote on the new proposal during its Open Commission Meeting scheduled for June 18, 2015. In the meantime, companies using automatic telephone dialing technology should plan to take action to comply with whatever comes from the FCC. There will be no notice and comment period and whatever passes at the Open Commission Meeting will become effective immediately upon release.

For an overview of the new provisions and their implications, please visit our official update page.