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Every week, AccountsRecovery.net brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.
Judge Rules FDCPA Claim Can Proceed in Credit Reporting Dispute, Dismisses FCRA Allegations
A District Court judge in Missouri has denied a defendant’s motion for summary judgment on claims it violated the Fair Debt Collection Practices Act by failing to correct inaccurate information it was furnishing to the credit reporting agencies, while granting the motion on claims it violated the Fair Credit Reporting Act, ruling the plaintiff did not establish that she suffered a concrete injury. More details here.
WHAT THIS MEANS, FROM RICK PERR OF KAUFMAN DOLOWICH: Strange fact patterns lead to strange outcomes. Here, defendant agency continued to report an account that was settled in litigation. The trial court found that the plaintiff did not present actual damages. Under the Fair Credit Reporting Act, a plaintiff must show actual damages to succeed on a negligent FCRA claim. However, the Court decided that genuine issues of material fact existed sufficient for a jury to determine whether the agency’s conduct in investigating the suit constituted abusive debt collection practices. This case underscores the necessity to always reach out to the creditor (or in this case the law firm) to confirm the facts underlining a dispute.
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Trump Institutes Regulatory Freeze on Day One in Office
On his first day in office, President Trump hit the pause button on a number of fronts, including issuing executive orders implementing a hiring freeze within the federal government and a freeze on issuing new regulations, among others. The freeze on new regulations is designed to put a stop to any orders that were issued while President Biden was in office, including rules that were sent to the Federal Register but have not yet been published and any released rules that have been issued but are not yet effective. More details here.
WHAT THIS MEANS, FROM JOANN NEEDLEMAN OF CLARK HILL: The use of executive orders (EO) by an incoming President is nothing new and Trump’s flurry of executive orders is consistent with his transition in 2016. The difference here is the immediate and direct impact that his EOs will have on all executive and independent agencies including the CFPB. Last time around, Trump issued an EO (Executive Order 13771) that required any executive department or agency that proposes a new regulation to identify two regulations to be repealed. For the fiscal year 2017, that same EO also instructed that the total (incremental) cost of all new regulations and repealed regulations should be no greater than zero. The 2017 EOs looked to halt the growth of regulation, this time around the EOs look to shrink the regulatory landscape.
This latest EO puts a halt to any rules that have yet to be published in the federal register as well as a hiring freeze. We have seen in the news that job offers to college and graduate students, including law students, have in fact been rescinded. Clearly the administration wants a standstill with the opportunity to review the regulatory agenda of operational policies for all agencies with the goal of shrinking them significantly.
On Saturday night, Rohit Chopra was terminated from the CFPB. His current Deputy Director, Zixta Martinez, will remain at the CFPB for now until a new interim Director is named. As we saw with Mick Mulvaney and even Kathy Kraninger, a new Director of any agency is given an opportunity to assess the workings of the agency’s predecessors. This current EO does not alter or even enhance that ability. What is important to watch, especially for the ARM industry, is how the CFPB will exercise its rulemaking authority going forward. A regulatory freeze does not stop enforcement or supervision. Those are the core functions of the Bureau. Rulemaking and guidance are another story and that, in my opinion, is where the EO will have the most immediate impact.
Statute of Limitations Sinks Plaintiff’s FCRA Claim in Florida Court
A District Court judge in Florida has granted a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act, rejecting the plaintiff’s arguments that her claim should not be subject to the law’s two-year statute of limitations for filing a claim. More details here.
WHAT THIS MEANS, FROM MITCH WILLIAMSON OF BARRON & NEWBURGER: The Moise case provides another interesting take on statute of limitations arguments, It falls into the “ignorance of the law is no excuse” bucket when dealing with pro se litigants.
Moise alleged a pull of her credit report without a permissible purpose. Under the FCRA, “a plaintiff may sue under the FCRA “not later than the earlier of (1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for [FCRA] liability; or (2) 5 years after the date on which the violation that is the basis for such liability occurs.” § 1681p. “Earlier of” is crucial – in this case Moise saw the pull on her CR a little more than five months after it occurred so she was limited to a two-year window. The subject complaint was filed approximately fourteen (14) months later. If trying to fend off the obvious motion to dismiss, Moise claimed the reason for the delayed filing was that she didn’t “discover” the violation until she received 3rd party information that she had grounds for a suit.
To sum it up the Court relied on an earlier 5th Circuit ruling “that a limitations period begins to run when a claimant discovers the facts that give rise to a claim and not when a claimant discovers that those facts constitute a legal violation.” There is also a brief discussion of the high bar needed to hurdle to claim equitable tolling.
Save this decision to your SOL and pro se folders – and if you don’t have then, now would be a good time to start.
New York Governor Proposes Overhaul of Overdraft and NSF Fee Regulations
In a move aimed at enhancing consumer protection, New York Gov. Kathy Hochul unveiled new proposed regulations on overdraft and non-sufficient funds (NSF) fees as part of her 2025 State of the State address. These changes, spearheaded by the New York Department of Financial Services (DFS), are designed to curb what the state deems as unfair banking practices, particularly those related to overdraft fees for minor transactions. More details here.
WHAT THIS MEANS, FROM JONATHAN ROBBIN OF J. ROBBIN LAW: In her 2025 State of the State address, New York Gov. Kathy Hochul revealed proposed changes to DFS regulations pertaining to overdraft and non-sufficient funds (“NSF”) fees. The proposed regulations apply to minor transactions in consumer banking, and seek to provide clarity to consumers while curbing mounting fees. Assuming that the regulations are enacted as proposed, financial institutions offering consumer banking will need to revise their policies within New York State and convey such changes to their consumers to avoid running afoul of DFS requirements. Among other things, the proposals as currently drafted include, but are not limited to, prohibiting banks from charging overdraft fees on transactions under $20, notifying consumers of potential overdraft charges, prohibiting daily fees for unpaid overdrafts, and prohibiting NSF charges in excess of overdraft fees. These proposed regulations are commercially disadvantageous to banks and will cause additional strain on IT departments and other critical systems. To the extent your business is affected by these proposals, consider commenting when these changes are formally proposed, in compliance with the State Administrative Procedure Act, and published in the State Register.
Judge Dismisses TCPA Case Against Collector
A District Court judge in New Jersey has granted a defendant’s motion to dismiss a Telephone Consumer Protection Act case after it was accused of using an automated telephone dialing system when attempting to contact the plaintiff, ruling that the plaintiff’s allegations were insufficient to support the claim. More details here.
WHAT THIS MEANS, FROM VIRGINIA BELL FLYNN OF TROUTMAN PEPPER LOCKE: A Telephone Consumer Protection Act (“TCPA”) claim was dismissed as insufficient by a District Court in New Jersey. In Frato v. Capital Management Services, L.P., Plaintiff Steven J. Frato Jr. alleged that the Defendant made at least 29 unsolicited calls to his personal cell phone between May and July 2023 regarding debt collection. Plaintiff claimed he repeatedly requested the calls to stop and that he was registered on the National Do Not Call Registry. The Court granted the Defendant’s motion to dismiss on several grounds, finding that (1) Plaintiff made conclusory allegations regarding the use of an automated telephone dialing system and lacked specific facts to support the claim, (2) Plaintiff’s allegations regarding ongoing conversations with Defendant’s representatives contradicted claims of receiving artificial or prerecorded messages, and (3) the calls were debt collection calls, not telephone solicitations.
CFPB Releases New Reports on State-Level Enforcement and Summary of Guidance
The Consumer Financial Protection Bureau yesterday released a pair of reports, one detailing how states can better align their laws with the evolving challenges in consumer protection and the other a compendium of guidance it has released in recent years. As markets become more complex, particularly with the rise of technology, sensitive data exploitation, and new business practices, the report underscores the need for modernizing state-level consumer protection regulations. More details here.
WHAT THIS MEANS, FROM LORAINE LYONS OF MARTIN GOLDEN LYONS WATTS MORGAN: The day before the transition to the new Trump administration, the Consumer Financial Protection Bureau (CFPB) issued Guidance to state governments on strengthening state-level consumer protection laws. This Guidance offers “recommendations” for states to consider, though it is unlikely to lead to a formal rulemaking process. Additionally, the CFPB released a 363-page Compendium of Recent CFPB Guidance covering 2021 to 2024. Given the frequent issuance of new CFPB Circulars, Guidance, and Rulemakings in 2024, it may have felt like these documents were coming out every time you turned around — and, in fact, they were issued almost every month in 2024!
For state government leaders who align with Director Chopra’s approach to strengthening consumer protection, these states have already implemented or will likely implement stronger consumer protection laws, with or without the Guidance. For those who don’t align with Director Chopra’s approach, the Guidance may not receive much attention. Regardless, the Compendium is a good resource for locating CFPB Guidance issued over the past four years.
CFPB Seeks Input on Strengthening Consumer Protections in Digital Payments
The Consumer Financial Protection Bureau on Friday announced steps to enhance consumer protection in the rapidly evolving digital payments landscape. The Bureau is inviting public comments on two pivotal initiatives: a Request for Information on financial privacy and a proposed interpretive rule on the applicability of the Electronic Fund Transfer Act (EFTA) to emerging payment mechanisms. More details here.
WHAT THIS MEANS, FROM MONICA LITTMAN OF KAUFMAN DOLOWICH: On January 10, 2025, the Consumer Financial Protection Bureau (“CFPB”) issued a Notice of a Proposed Interpretive Rule regarding when the Electronic Fund Transfer Act (“EFTA”) and Regulation E, would apply to a range of emerging digital payment mechanisms. These mechanisms include stablecoins, video game platforms, and credit card reward points accounts. The CFPB was concerned that consumers would face challenges in dealing with unauthorized electronic fund transfers if the EFTA and Regulation E were not applied consistently to certain types of accounts. The CFPB also was concerned that providers would be at an unfair, competitive advantage if there was inconsistent application of the EFTA and Regulation F. This was one of the last proposed Rules issued by former CFPB Director Rohit Chopra. The comments to this proposed Rule are due by March 31, 2025. The future of this Rule will depend on the next Director of the CFPB. We also will be watching to see if Congress uses the Congressional Review Act to overturn any of the recent rules issued by the CFPB.
I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
