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.
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.
Court Denies Motion to Dismiss in FCRA Case Over Disputed Credit Reporting
A District Court judge in Kentucky has denied a defendant’s motions to dismiss and for summary judgment in a Fair Credit Reporting Act case over the accuracy of information that was furnished to the credit reporting agencies. The case stems from allegations that inaccurate information was reported as past due and included in a bankruptcy filing, even though the account was neither past due nor involved in the bankruptcy. More details here.
WHAT THIS MEANS, FROM BROOKE CONKLE OF TROUTMAN PEPPER LOCKE: The Court’s decision in Johnson shows how difficult it can be for furnisher defendants to escape – at the pleading stage – FCRA claims based on inaccurate reporting. The Court examined the elements of an FCRA claim under Section 1681s-2(b) and, finding that the plaintiff did enough to satisfy Iqbal/Twombly pleading standards, denied the defendant’s motion to dismiss. Though the defendant moved for summary judgment in the alternative, the Court elected to give both parties an opportunity to develop a full record.
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Court Partially Grants and Denies Motion to Remand FDCPA Case to State Court
A District Court judge in Illinois has partially granted and partially denied a plaintiff’s motion to remand a Fair Debt Collection Practices Act case back to state court where it was originally filed, ruling that it has jurisdiction over the plaintiff’s claims that the defendant failed to note the account was disputed with the credit reporting agencies. More details here.
WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: The Seventh Circuit has gained a reputation for dismissing claims brought under the FCRA and FDCPA due to lack of standing. Consequently, many consumer protection cases in the circuit are increasingly being litigated in state court. In this case, the court partially granted and partially denied the motion to remand. It allowed the claim concerning NCB’s alleged failure to report a disputed debt to credit reporting agencies to proceed in federal court, while remanding the claims related to the debt collection letter back to state court. The court held that the letter-related claims did not allege a concrete injury sufficient to confer federal jurisdiction under Seventh Circuit precedent. In contrast, the claim involving inaccurate credit reporting was found to involve a concrete harm akin to defamation, thereby satisfying the requirements for federal jurisdiction. The court also denied Skoff’s request for costs and fees, reasoning that the partial remand showed the removal was not unreasonable.
FCC Takes Steps to Close Robocall Loophole
The Federal Communications Commission yesterday took another step in its ongoing battle against illegal robocalls by moving to address the non-IP network loophole, which has allowed robocallers to bypass authentication tools that protect consumers. More details here.
WHAT THIS MEANS, FROM DAVID KAMINSKI OF CARLSON & MESSER: The FCC appears to be working diligently to stop illegal robocalls from overseas and other violators who are still using illegal or legal technology to make calls to those whose phone numbers are on the national DNC list. The FCC is still having trouble finding and solving the issue of US telemarketing entities that violate the law by routinely using phone numbers that cannot be traced because they are transient/unidentifiable phone numbers. The FCC also claims that voice providers must use non-IP caller ID authentication frameworks in order to stop these calls. However, what impact will this have? Some experts say very little.
The FCC has not been able to pinpoint the solution to stop unwanted calls from entities that can never be located.This is the core of the problem and what we have been asking the FCC to resolve for the longest time. The solution may not be within site in the next several years. Only time will tell. This is a daunting issue for sure.
CFPB Update
It was a busy week at the CFPB. The week started with an Appeals Court ruling blocking the firing of 1,500 CFPB staffers and ended with the CFPB vacating its medical debt credit reporting rule. In between, there was a whole bunch of other stuff that happened, too. More details here and here and here and here and here
WHAT THIS MEANS, FROM JOANN NEEDLEMAN OF CLARK HILL: The daily activities regarding the destiny of the CFPB were still in play this week, culminating in two significant events. First, Acting Director, Russell Vought, rescinded 59 guidance documents and advisory opinions. Some of these advisories had been in effect since 2012 and many touched on guidance around the FDCPA and FCRA. The next day, Johnathan McKernan, current nominee for CFPB Director, was nominated for a Treasury position. It is unclear, though highly probable, that his nomination to lead the CFPB will be withdrawn. This all exists with the backdrop of the employees’ union litigation, which is challenging the reduction in force (RIF) of practically but a small handful of CFPB staff.
The questions being posed by many and the on-going discussions is now what, and candidly there is no clear answer. While industry, especially the ARM Industry, has had their challenges with the CFPB, now is not the time for a victory lap. There has been no repeal of Dodd-Frank and Title X mandates and the Bureau. Efforts to blow up the CFPB is only a short-term strategy and will be met with a desire to make the CFPB stronger and more resilient in another Administration a few years down the road. The focus on the ARM industry by the states is very real and the rescission of previous guidance, whether you agreed with the legal interpretations, will only result in a dramatic increase in private litigation. The best the ARM industry can do now is to review and assess to make sure that all compliance procedures and your compliance management systems are robust, fully functional, and able to manage, identify and remediate risk appropriately.
The ARM Industry should pay attention to the following: Treasury Secretary Scott Bessent has been quietly gathering all prudential regulators to reshape and reform financial regulation, in order for the Treasury to take a greater role in streamlining oversight. As been reported, Jonathan McKernan has been leading these meetings. Despite the chaos surrounding the CFPB, McKernan’s withdrawal as Director of the CFPB maybe more of a coordinated effort than meets the eye. Dodd- Frank established the CFPB as an independent executive agency, but that is not to say that that it could operate within another agency, similar to how the Drug Enforcement Administration (DEA) is an agency within the Department of Justice and the Secret Service is within the Department of Homeland Security. More than likely the CFPB will exist as a division or bureau within Treasury and look for McKernan to lead that effort.
Maryland Enacts Medical Debt Credit Reporting Law
The governor of Maryland last week signed HB 1020, the Fair Medical Debt Reporting Act into law, which makes it the latest state to enact a medical debt credit reporting law. More details here.
WHAT THIS MEANS, FROM CHUCK DODGE OF HUDSON COOK: Maryland joins a growing number of states with this medical debt reporting bill that effectively prohibits the furnishing of most types of medical debt incurred by Maryland residents to the consumer reporting agencies. The focus with these bills is the definition and scope of “medical debt,” because the states are not always careful to define the types of medical debts specifically enough to make compliance with the limitation manageable. Maryland’s definition and scope are clear in their exclusion of medical debt incurred on a general-purpose credit card, focusing instead and narrowly on prohibiting reporting of debts incurred on medical cards (e.g., Care Credit). No doubt collection industry lobbyists were in touch with state legislators on this bill to make sure they understood the potential for adopting a bill that has a far broader impact than the one they intended. The debate about whether carrying medical debt can or should inform credit decisions, but Maryland has made its case.
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.
