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.
Minnesota Appeals Court Clarifies What Counts as Debt Collection in the State
A Minnesota appeals court has affirmed a lower court’s ruling that seeks to define debt collection in the state and the circumstances under which an entity must be licensed to collect in Minnesota. The decision reinforces a broad interpretation of what activity constitutes debt collection and when out-of-state companies fall under Minnesota’s licensing requirements. More details here.
WHAT THIS MEANS, FROM ALEX MCFALL OF HUSCH BLACKWELL: A recent Minnesota Court of Appeals decision clarifies the scope of Minnesota’s debt collection licensing law and signals that the statute applies more broadly than some service providers may expect. The case involved a company seeking to recover vehicle damage charges after a rental, which argued that it was pursuing reimbursement rather than collecting a debt. The court disagreed and held that attempting to collect any money owed by a consumer, even when framed as a damages claim arising out of a contract, falls within the definition of debt collection under Minn. Stat. 332.31.
The opinion also confirms that licensing requirements apply even if the collector is located out of state, even when the claim is ancillary to the primary transaction, and even when the debt is not a traditional credit obligation. This decision reinforces that Minnesota is willing to categorize a wide range of recovery activity as debt collection, so businesses operating in adjacent spaces should evaluate whether their workflows may trigger a licensing obligation.
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Plaintiff’s Attempt to Return FCRA Case to State Court Denied
A District Court judge in Indiana has denied a plaintiff’s motion to remand a Fair Credit Reporting Act case back to state court, ruling the plaintiff has standing for the case to be tried in federal court. More details here.
WHAT THIS MEANS, FROM JENNA WILLIAMS OF FROST ECHOLS: This case is a great example of how standing works differently in FCRA cases compared to FDCPA cases
Standing is typically easier to establish in FCRA cases that involve inaccurate credit reporting because the alleged injury is concrete and measurable. A plaintiff simply needs to say “I applied for (insert literally any credit related application) and was denied.” That’s it. We all agree an inaccurate tradeline can impact credit scores, loan approvals, interest rates, employment screenings, etc. Courts view these alleged consequences as tangible and directly linked to the inaccurate reporting, which usually satisfies Article III even without any out-of-pocket loss.
FDCPA standing is a different story. When a claim relies solely on emotional distress caused by a technical or procedural violation, courts are far less willing to find a concrete injury. Many FDCPA decisions hold that a bare statutory violation, without a real-world effect or material risk of harm, is not enough. This is where the familiar Spokeo argument comes into play. Because of this higher threshold, plaintiffs have a harder time establishing standing in FDCPA cases that involve nothing more than frustration or annoyance from a non-material (alleged) violation.
CFPB Roundup: Union Pushes Court for Clarity, Bureau Issues Humility Pledge, MoneyLion Case Resolved
Against the backdrop of litigation and uncertainty around its future, the CFPB also released its new “Humility in Supervisions Pledge,” which examiners will read to institutions at the start of each exam. More details here.
WHAT THIS MEANS, FROM KIM PHAN OF TROUTMAN PEPPER LOCKE: On November 21, the Consumer Financial Protection Bureau (CFPB) notified staff that it will be restarting its supervisor activity. However, the CFPB also announced that beginning with the 2026 examination cycle, CFPB staff will be required to read a Humility in Supervisions Pledge (Pledge) to each supervised entity. The pledge signals a notable shift in tone that is aligns with the CFPB’s Memorandum on Supervision and Enforcement Priorities released in April 2025. According to the Pledge, examinations will now adhere more closely to the CFPB’s statutory authority, focus on “identified priority markets”, and attempt to remediate issues in Supervision rather than escalate to Enforcement. Supervised entities may welcome changes such as advance notice of exams, CFPB requests being tied to stated priorities, and any CFPB follow-up requests being discussed with supervised entities so that such requests are tailored to the information already supplied.
Judge Sanctions Plaintiff’s Counsel for Prolonging FDCPA Case
A District Court judge in Michigan has partially granted a defendant’s motion for sanctions against the counsel representing the plaintiff in a Fair Debt Collection Practices Act case for refusing to dismiss the complaint after being supplied with enough information to show that the claims were meritless. More details here.
WHAT THIS MEANS, FROM JUSTIN PENN OF HINSHAW & CULBERTSON: We all feel that the courts should award sanctions far more often then they do. The challenge is two-fold” (1) judges do not generally like to sanction attorneys, and (2) generally speaking, sanctions are seldom awarded until the conclusion of a case when the attorney fees have already been incurred, presenting a natural barrier to seeking them. In addition, Rule 11 requires a party to draft the motion and serve the party against whom sanctions will be sought, and give them a safe harbor to withdraw their offending arguments. This case, however, highlights an avenue for sanctions that does not require a party to wait until the conclusion of the case or incur the costs of drafting the motion and providing safe harbour – Section 1927. Under 28 U.S.C. 1927, a litigant who unreasonably multiplies or extends litigation can be sanctioned for the resulting fees. As such, while you may not recover all of your attorneys fees for a case, Section 1927 can be a powerful tool to bring a vexatious litigant in line prior to a favorable ruling if they are compounding issues and cause unnecessary delay.
NY Appeals Court Overturns Denial of MTD in FDCPA Case
A New York state Appeals Court has reversed a lower court’s ruling, denying a defendant’s motion to dismiss a Fair Debt Collection Practices Act case, ruling the motion should have been granted because the plaintiff lacked standing to file the lawsuit in the first place. More details here.
WHAT THIS MEANS, FROM BRENDAN LITTLE OF LIPPES MATHIAS: Plaintiff commenced a New York state court action alleging a violation of the Fair Debt Collection Practices Act (“FDCPA”) because Defendant was collecting on a debt that Plaintiff contends Plaintiff did not owe. Defendant moved to dismiss the Complaint due to lack of standing and the trial court denied the motion. On appeal, New York’s intermediate appellate court reversed the trial court and dismissed the action. Consistent with its prior recent decisions, the Appellate Division found that “the plaintiff failed to allege that she suffered an injury-in-fact as the result of the defendant’s alleged violations of the FDCPA.” Similar to the decisions from the federal district courts in New York, the New York state courts are now rejecting consumers’ claims that claim mere statutory violations of the FDCPA with any allegation of an actual injury.
Judge Tosses FDCPA Suit Over $25 Autopay Dispute
A District Court judge in Minnesota has granted a defendant’s motion to dismiss claims that a pair of creditors violated the Fair Debt Collection Practices Act, which in and of itself isn’t that ground-breaking, but the demands that were made by the plaintiff and how he attempted to convince the judge that the defendants should be subject to the statute make this a more interesting case. More details here.
WHAT THIS MEANS, FROM JOHN MAREES OF MESSER STRICKLER BURNETTE: While the holding (that the FDCPA applies only to debt collectors and not creditors) is not novel, Plaintiff’s arguments were. Plaintiff sought $100,000.00 in punitive damages, contending that those who are not “debt collectors” under the FDCPA should nonetheless be subject to its provisions because the FDPCA supplements other laws governing debt collection, even admitting the defendants were not “debt collectors” under the statute. The Court rejected these arguments, finding (correctly) that the FDCPA only applies to “debt collectors” and not creditors collecting their own debts.
With Money Running Out, CFPB Hands Off Enforcement Work to DOJ
The Consumer Financial Protection Bureau is preparing to transfer all remaining enforcement cases and regulatory litigation to the Department of Justice as it warns staff it will run out of money at the end of the year, according to multiple reports and individuals familiar with the agency’s plans. More details here.
WHAT THIS MEANS, FROM HEATH MORGAN OF MARTIN GOLDEN LYONS WATTS MORGAN: This is the latest move in a game of chess between those that want to get rid of the CFPB in its current state, and those that want to keep it in place. Neither party has the ability to take legislative action, leaving us to administrative moves and litigation. This move will inevitably lead to litigation to decide several issues of whether a federal administrative agency can transfer enforcement cases to another federal agency. This move seems good on paper for advocates for defunding the CFPB, with a current DOJ that may be aligned with that mindset. However, this move may come back to impact regulated entities in future DOJ administrations that have become more political in the last few presidential terms.
Regardless, the one thing we do know is that companies that have pending enforcement actions against the CFPB should expect delays in those actions during the transfer of the cases and litigation that comes with it. And we now have a more concrete figure of the number of CFPB employees still on staff which may be up to 1,000, which helps partially answer the question of what is happening at 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.
