On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, in response to the national emergency arising from the COVID-19 pandemic. Four key provisions of the CARES Act are likely to affect mortgage loan servicers: (1) credit protection; (2) a moratorium on foreclosures; (3) forbearance on mortgage payments; and (4) a moratorium on eviction filings. Compliance with the CARES Act may be straightforward for moratoriums but more challenging for credit reporting and regulatory compliance. This post provides an updated summary of salient portions of the CARES Act and identifies potential regulatory compliance pitfalls.
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California’s Third District Court of Appeal Expands a Borrower’s Right to Attorney’s Fees Under the Homeowner Bill of Rights
Under California’s Homeowner Bill of Rights (HBOR), if a borrower obtains injunctive relief or is awarded damages pursuant to Civil Code Section 2924.12(h), the court may award the prevailing borrower reasonable attorney’s fees and costs.
In cases where the court ultimately determines that the mortgage lender or servicer violated the provision of the HBOR outlined in Civ. Code Section 2924.12(a)(1) and (b), the borrower would undoubtedly be entitled to recover attorney’s fees and costs. However, HBOR does not make clear whether the borrower would be entitled to attorney’s fees and costs in cases where the borrower applies for injunctive relief before the court makes an ultimate decision on the merits of the case. Specifically, the statute does not clarify when (i.e., in what phase of the litigation) the borrower is entitled to an award of fees and costs, nor does it distinguish between permanent and preliminary injunctions. And in the few iterations of the HBOR since it became effective in 2013, Civil Code Section 2924.12 has remained largely unaltered, substantively, on attorney fee and costs rewards for injunctive relief.
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CCPA in Litigation: 2018 to Present
The California Consumer Privacy Act (CCPA) went into effect on January 1, 2020. Although enforcement cannot begin until July, private plaintiffs have started to bring claims under the law’s limited private right of action since the beginning of the year. Despite the CCPA going into effect just three months ago, it is already having an
Accessing and Maintaining Liquidity During the COVID-19 Pandemic
As companies across all industries including consumer finance, prepare to face the widespread economic effects of the coronavirus (COVID-19) pandemic, ensuring access to liquidity during this time is a key strategy in addressing the challenges posed by COVID-19. This update provides guidance to companies evaluating whether and when to borrow on an existing line of
CCPA Amendments Provide Important Clarification
On Friday the 13th of September 2019—the last day of California’s Legislative Session—California lawmakers updated, finalized and sent six bills that would amend the California Consumer Privacy Act (CCPA) to Governor Newsom’s desk for signature. Despite months of efforts from various groups, the CCPA made it through the legislative session with relatively fewer changes than
Seventh Circuit’s “No Harm, No Foul” Holding Requires Concrete Harm in Consumer Lending Cases
In Casillas v. Madison Avenue Associates, Inc., 926 F.3d 329, 333 (7th Cir. 2019), the Seventh Circuit upheld the district court’s holding that a plaintiff lacked standing to pursue a claim under the Fair Debt Collection Practices Act (FDCPA) against a debt collector because the plaintiff could not establish that any damages were caused by the FDCPA violation.
The FDCPA requires a debt collector to give written notice to a consumer within five days of its initial communication. 15 U.S.C. § 1692g(a). The notice must include, among other things, a description of two mechanisms that the debtor can use to verify his or her debt in writing. Id. The FDCPA also renders a debt collector liable for “fail[ing] to comply with any provision of [the Act].” Id. § 1692k(a).
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CCPA and the Scope of the GLBA Exemption
The CCPA exempts processing of personal information “pursuant to” the Gramm-Leach-Bliley Act (GLBA). Businesses must analyze their processing activities, including the types of personal information collected and how they are used, to determine which activities are conducted “pursuant to” the GLBA and which fall outside this limited scope and assess how to mitigate risk. Join
Quashing Subpoenas for Borrower Records
Beyond the Financial Services Modernization Act (also known as the Gramm-Leach-Bliley Act), which generally provides that a financial institution may not disclose a customer’s nonpublic personal information unless it falls under one of the general exceptions of 15 U.S.C. § 6802(e) (e.g., consent of the customer or compliance with a properly authorized civil subpoena), the failure to domesticate a subpoena remains one of the most utilized arguments in motions to quash.
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Supreme Court Holds Third-Party Defendant Can’t Remove Class Actions Under CAFA
Takeaway: The U.S. Supreme Court ever so slightly trimmed removal rules under the Class Action Fairness Act (CAFA) last week in Home Depot U.S.A., Inc. v. Jackson, No. 17-1471. In an opinion by Justice Thomas, the Court held that neither CAFA nor the general removal statute (28 U.S.C. § 1441(a)) permit removal by a
New Consumer Protection Due Diligence That Your Company May Need to Perform
The Ninth Circuit recently held a company vicariously liable for the actions of a downstream vendor of text message and telephone marketing activities. The Telephone Consumer Protection Act (TCPA) is increasingly being used to bring lawsuits with potential statutory damages totaling millions or even hundreds of millions of dollars.
Companies should consider due diligence and