Compliance

3 more reports question CFPB’s actions and structure

WASHINGTON, D.C. - 

Recent projects completed by the Competitive Enterprise Institute and the Cato Institute again delved into unsatisfactory assessments of the Consumer Financial Protection Bureau.

Coinciding with House Republicans chastising the CFPB over its investigation of Wells Fargo, a wide-sweeping survey conducted by the Cato Institute found that participants agree with an assertion previously made by the Consumer Bankers Association — that the bureau should be run by a commission rather than a single director.

According to a blog post by Emily Ekins, a research fellow and director of polling at the Cato Institute, Americans support changing the structure of the CFPB as nearly two-thirds (63 percent) say the CFPB should be led by a bipartisan commission of Democrats and Republicans, rather than by a single director. A third (33 percent) think a single director should run the federal agency instead.

Ekins noted that support is post-partisan with strong majorities of Democrats (67 percent) and Republicans (64 percent) in support of a bipartisan commission leading the agency.

Notably, Ekins went on to mention majorities of Americans support a bipartisan commission leading the CFPB regardless of whether one has a positive opinion (55 percent) or negative opinion (63 percent) of the agency.

Beyond how the CFPB leadership is structured, the Cato Institute 2017 Financial Regulation Survey showed that support for CFPB independence is more controversial than changing its structure.

Ekins shared that 54 percent of Americans say Congress should have limited oversight of the CFPB and should not set its budget, while 42 percent say Congress should closely oversee and set the budget for the agency.

Moreover, Ekins added that partisans disagree about the level of oversight needed for this federal agency. Reluctance for more Congressional oversight is perhaps unsurprising given that only 7 percent of Americans have a lot of confidence in Congress to run things.

Bottom line: the Cato Institute asked 2,000 Americans 18 years of age and older between May 24 and 31 this simple question. Has the CFPB achieved its mission?

From its inception, Ekins insisted that the bureau has been tasked with making it easier for consumers to understand the terms and conditions of credit cards and other financial products. However, six years into the agency’s tenure, she reported that few Americans (26 percent, to be exact) believe the CFPB has achieved its mission to make financial products’ terms and conditions clearer.

That survey sentiment coincided with analysis presented by the Competitive Enterprise Institute (CEI). Its report documented what the firm described as the harm inflicted on ordinary consumers of financial products by the bureau that remains unaccountable to Congress, the president and the courts.

The report available here urges Congress to make drastic reforms to the CFPB or even abolish it.

“The Consumer Financial Protection Bureau was set up under the Dodd-Frank act of 2010 in violation of constitutional norms ostensibly to protect consumers from bad actors in the banking and financial services industry, but the agency is instead actively harming consumers, pressing ahead with regulations even when the benefit to consumers is likely to be outweighed by the costs,” said Iain Murray, vice president for strategy at CEI and author of the report titled, “The Case against the Consumer Financial Protection Bureau: Unconstitutionally Structured and Harmful to Consumers.”

Murray added, “The CFPB would be far less able to abuse its power and make bad decisions if it were held accountable. It’s urgent that Congress take action to stop the CFPB and restore constitutional checks and balances aimed at protecting Americans from abuses of government power.”

Each effort by the Cato Institute and the Competitive Enterprise Institute arrived as the House Financial Services Committee released a second interim staff report on its investigation into the Wells Fargo fraudulent account scandal and the CFPB enforcement action on the matter.

An internal CFPB “Recommendation Memorandum” for the director — improperly withheld from the committee for more than a year according to lawmakers — revealed the bureau failed to fully and adequately investigate Wells Fargo.  Instead, the report said the bureau rushed to settle with Wells Fargo for less than 1 percent of the CFPB’ss own estimate of the bank’s statutory civil monetary penalty. 

Not only does the Recommendation Memorandum fail to justify the CFPB’s settlement, the report said the document calls into question the accuracy of CFPB director Richard Cordray’s testimony before Congress and his claims that the bureau had conducted an “independent and comprehensive investigation.”

“The CFPB’s handling of this matter and its refusal to fully comply with the Congressional subpoena are a slap in the face to millions of Americans who were harmed by Wells Fargo and further evidence of the CFPB’s unaccountable structure and leadership.  The premature suspension of its investigation means that the CFPB also potentially lost the opportunity to discover recently revealed instances of further consumer harm,” committee chairman Jeb Hensarling said.

How repossession practices could improve based on latest CFPB report

WASHINGTON, D.C. - 

Hudson Cook partner Allen Denson read through the auto-finance portion of the latest Supervisory Highlights shared by the Consumer Financial Protection Bureau and immediately thought of another credit segment. The CFPB’s report described problems bureau representatives found with vehicles being repossessed after contract holders evidently made catch-up payments or entered into agreements to avoid repossession.

In the report, the CFPB acknowledged that contract holders give creditors a security interest in their vehicles. When a borrower defaults, the CFPB said a creditor can exercise its rights under the contract and repossess the secured vehicle.

The bureau also pointed out that servicers may have formal extension agreements that allow borrowers to forbear payments for a certain period of time or may cancel a repossession order once a borrower makes a payment.

“In one or more recent exams, examiners found that one or more entities were repossessing vehicles after the repossession was supposed to be cancelled,” the CFPB said in the report. “In these instances, the servicer(s) wrongfully coded the account as remaining delinquent, customer service representatives did not timely cancel the repossession order after borrowers made sufficient payments or entered an agreement with the servicer to avoid repossession, or repossession agents had not checked the documentation before repossessing and thus did not learn that the repossession had been cancelled.

“Bureau examiners concluded that it was an unfair practice to repossess vehicles where borrowers had brought the account current, entered an agreement with the servicer to avoid repossession, or made a payment sufficient to stop the repossession, where reasonably practicable given the timing of the borrower’s action,” the report continued.

Upon reviewing that update, Denson arrived at this assessment.

“The problems with repossession highlighted in the most-recent version of the CFPB’s Supervisory Highlights are reminiscent of financial regulators concerns about alleged wrongful foreclosures during the mortgage crises,” Denson said in a message to SubPrime Auto Finance News. “There, mortgage servicers on occasion foreclosed on consumers who were involved in loan modification or workout pipelines. 

“The same circumstances appear to apply here: Consumers may have had their vehicles repossessed while they were part of a workout agreement,” continued Denson, who is set to be a part of a regulatory discussion during Repo Con at Used Car Week, which begins on Nov. 13 in Palm Springs, Calif.

After the CFPB discovered what the regulator deemed to be an improper practice, the bureau’s report shared what happened next.

“Supervision directed the servicer(s) to stop the practice,” the report said. “In response to our examiners’ findings, the servicer(s) informed supervision that the affected consumers were refunded the repossession fees.

“The servicer(s) also implemented a system that requires repossession agents to verify that the repossession order is still active immediately prior to repossessing the vehicle, for example, through a specially designed mobile application for that purpose,” the report added.

Upon seeing how the CFPB handled the matter, Denson closed with an upbeat recommendation of how the auto finance industry can move forward to avoid these problems down the road.

“The Supervisory Highlights, while noting the problem, also seem to contain a proposed solution,” Denson said. “Servicers should develop methods to ensure real-time or near real time status updates of accounts before repossession and should develop procedures whereby repossession agents confirm that a repossession should occur immediately prior to the event. 

“In the case of the servicer highlighted in Supervisory Highlights, a ‘high-tech’ solution in the form of an app was adopted,” he continued. “However, services could adopt more manual procedures as well. The key is having open information channels and checks against alleged wrongful repossessions.”

New York governor and AG take aggressive actions over Equifax breach

NEW YORK - 

Two of the highest ranking officials in New York are using the Equifax security breach to intensify actions within the Empire State, bringing Experian and TransUnion into the matter, too.

On Tuesday, Gov. Andrew Cuomo directed the New York Department of Financial Services to issue new regulation making credit reporting agencies register with New York for the first time and comply with what the state has called a first-in-the-nation cybersecurity standard.

Then on Wednesday, New York Attorney General Eric Schneiderman announced that his office has sent formal inquiries regarding data security to Experian and TransUnion following the Equifax data breach that potentially exposed the personal information of 143 million consumers.

“A person’s credit history affects virtually every part of their lives, and we will not sit idle by while New Yorkers remain unprotected from cyberattacks due to lax security,” Cuomo said.

“The Equifax breach has left millions of New Yorkers vulnerable to identity theft and major financial issues,” Schneiderman said. “Credit reporting agencies have a fundamental responsibility to protect the personal information they’re entrusted with.

“As we continue our investigation into the Equifax breach, it’s vital to ensure that consumer data at the other major credit reporting agencies is safe,” Schneiderman added.

Under the proposed regulation, all consumer credit reporting agencies that operate in New York must register annually with DFS beginning on or before Feb. 1 and by Feb. 1 of each successive year for the calendar year thereafter. The registration form must include an agency’s officers or directors who will be responsible for compliance with the financial services, banking, and insurance laws and regulations.

The annual reporting obligation contained within the proposal also provides the DFS Superintendent with the authority to deny and potentially revoke a consumer credit reporting agency's authorization to do business with New York’s regulated financial institutions and consumers if the agency is found to be out of compliance with certain prohibited practices, including engaging in unfair, deceptive or predatory practices.

“The data breach at Equifax demonstrates the necessity of strong state regulation like New York’s first-in-the-nation cybersecurity actions,” Department of Financial Services superintendent Maria Vullo said. “This is one necessary action of several that DFS will take to protect New York's markets, consumers and sensitive information from criminals.”

The DFS Superintendent may refuse to renew a consumer credit reporting agency's registration if the superintendent finds that the applicant or any member, principal, officer or director of the applicant, is not trustworthy and competent to act as or in connection with a consumer credit reporting agency, or that the agency has given cause for revocation or suspension of such registration, or has failed to comply with any minimum standard.

The proposed regulation also subjects consumer reporting agencies to examinations by DFS as often as the superintendent determines is necessary, and prohibits agencies from the following:

—Directly or indirectly employing any scheme, device or artifice to defraud or mislead a consumer.

—Engaging in any unfair, deceptive or predatory act or practice toward any consumer or misrepresent or omit any material information in connection with the assembly, evaluation, or maintenance of a credit report for a consumer located in New York State.

—Engaging in any unfair, deceptive, or abusive act or practice in violation of section 1036 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

—Including inaccurate information in any consumer report relating to a consumer located in New York State.

—Refusing to communicate with an authorized representative of a consumer located in New York State who provides a written authorization signed by the consumer, provided that the consumer credit reporting agency may adopt procedures reasonably related to verifying that the representative is in fact authorized to act on behalf of the consumer.

—Making any false statement or make any omission of a material fact in connection with any information or reports filed with a governmental agency or in connection with any investigation conducted by the superintendent or another governmental agency.

In addition, every credit reporting agency must comply with the department’s cybersecurity regulation, on phased in schedule of compliance, starting April 4.

DFS’ cybersecurity regulation requires banks, insurance companies and other financial services institutions regulated by DFS to have a cybersecurity program designed to protect consumers' private data; a written policy or policies that are approved by the board or a senior officer; a chief information security officer to help protect data and systems; and controls and plans in place to help ensure the safety and soundness of New York's financial services industry.

“Oversight of credit reporting agencies will help ensure that personal information is less vulnerable to cyberattacks and other nefarious acts in this rapidly changing digital world,” Cuomo said. “The Equifax breach was a wakeup call and with this action New York is raising the bar for consumer protections that we hope will be replicated across the nation.”

And Schneiderman wants to know what Experian and TransUnion are doing, as well.

In letters sent to the CEOs of the two companies, the attorney general’s office asks them to detail:

—The security measures that were in place before they learned of the Equifax breach

—Steps the companies have taken since learning of the breach to ensure that they haven’t already suffered similar intrusions and won’t experience breaches moving forward

—How they will further assist consumers in protecting their personal information

Schneiderman is seeking the answers to these questions by Sept. 21 and a meeting with top executives at Experian and TransUnion by Sept. 28.

CitiFinancial Credit to pay DOJ $907K for SCRA violations during repossessions

WASHINGTON, D.C. - 

A suit involving vehicle repossessions and members of the military came to a close Monday.

The Justice Department announced that CitiFinancial Credit Co., as successor to CitiFinancial Auto Corp., has agreed to pay $907,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 164 vehicle owned by SCRA-protected servicemembers without first obtaining the required court orders.

During the investigation, DOJ officials said they learned that CitiFinancial conducted repossessions without court orders even when CitiFinancial had evidence in its own records suggesting that a borrower could be a protected servicemember. In several cases, loan servicing notes indicated that CitiFinancial was informed that the borrower was in military service or had received orders to report for military service.

The Justice Department said that CitiFinancial, nevertheless, continued repossession efforts and eventually succeeded in repossessing the servicemembers’ vehicles.

This settlement resolves a suit filed by the department in the Northern District of Texas and covers vehicle repossessions that occurred between 2007 and 2010. CitiFinancial Auto Corp. originated and serviced these vehicle installment contracts until 2010, when operations and assets were sold to Santander Consumer USA.

In February 2015, the Justice Department entered a settlement with Santander that provides servicemembers with more than $10.5 million in compensation for repossessions that violated the SCRA. As part of the investigation of Santander’s repossession practices, officials learned that CitiFinancial sold Santander the right to collect debts owed by servicemembers after their vehicles had been repossessed by CitiFinancial in violation of the SCRA.

The SCRA protects servicemembers against certain civil proceedings, including vehicle repossessions, affecting their legal rights during active military service. The SCRA requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service.

The court may then delay the repossession or require the finance company to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the finance company to post a bond with the court and issue any other orders it deems necessary to protect the servicemember.

By failing to obtain court orders before repossessing vehicles owned by protected servicemembers, the DOJ asserted that CitiFinancial prevented servicemembers from obtaining a court review of whether these repossessions should be delayed or adjusted to account for their military service.

Officials went on to mention this agreement further compensates servicemembers for their losses by requiring CitiFinancial to pay $5,000 to each impacted servicemember, in addition to the Santander settlement.

CitiFinancial must also pay $10,000 to one affected servicemember who did not receive partial compensation through the Santander settlement.

In addition, CitiFinancial will pay $500 per account to compensate borrowers for any lost equity, with interest, and must take steps to repair the credit of all affected servicemembers. An independent settlement administrator will contact servicemembers in the coming months to finalize individual settlements at no cost to the servicemembers.

“Members of our armed forces make extraordinary sacrifices in order to protect and defend our nation, and they should be able to serve actively without fear that their legal rights will be violated,” said Associate Attorney General Rachel  Brand. “This settlement provides financial relief and credit repair assistance to the servicemembers whose vehicles were repossessed by CitiFinancial.

“The enforcement of federal laws protecting current members of the Armed Services, veterans, and their families continues to be an important priority for this Department of Justice,” Brand continued.

“The men and women who serve in the armed forces deserve to have us protect their backs while they selflessly protect us,” U.S. Attorney John Parker added. “This conduct clearly fell short of that and I'm grateful we were able to repair some of that harm.”

DIMONT launches complimentary claims consulting service for storm recovery

DALLAS - 

DIMONT is deploying DANA to help the auto-finance industry handle the ramifications of Hurricanes Harvey and Irma.

DANA — which is DIMONT Associates Nationwide Adjusters — now is available with a team ready to provide claims management guidance to finance companies and servicers in the aftermath of these storms and beyond.

DIMONT explained DANA is a virtual resource center that can allow finance companies and service providers the ability to email questions or schedule a live chat with a licensed adjuster. The tool is available indefinitely and is not limited to DIMONT clients.

DIMONT’s adjusters will, at a minimum, help servicers evaluate whether properties are in flood zones, what types of coverages apply and, most critically, how to navigate the exclusions, endorsements and exceptions in the applicable policy.

“People often assume that coverage automatically applies, but that is not the case,” DIMONT chief executive officer Denis Brosnan said. “The terms and conditions of policies vary greatly by the carrier and, as such must be carefully scrutinized.

“We wanted to provide the auto and mortgage industries a simple resource to get their questions answered on filing claims, addressing refuted claims, claim type, customer service — basically anything they need,” Brosnan continued.

“DANA offers a complimentary phone consultation with our expert licensed public adjusters, who can help navigate claims processing during this uncertain time,” he went on to say.

DANA is available now at www.dimont.com/dana. DIMONT also is set to be one of the exhibitors during Used Car Week, which begins Nov. 13 in Palm Springs. Calif.

NADA offers strategy to handle Equifax concerns

TYSONS, Va. - 

The National Automobile Dealers Association cautioned store managers and personnel that they’re likely to see two trends surface with regard to the Equifax security breach as customers arrive in the showroom or service drive.

Mark Scarpelli, who is the 2017 NADA chairman, specified the two probable scenarios in a blog post the association shared last Friday. Scarpelli mentioned dealerships are likely to get questions from customers about the breach itself as well as a potential increase in credit freezes and fraud alerts on credit applicants’ credit reports.

“Equifax has stated that information from as many as 143 million people in the United States was compromised,” wrote Scarpelli, who is president of Raymond Chevrolet and Raymond Kia in Antioch, Ill., and co-owner of Ray Chevrolet and Ray Chrysler-Jeep-Dodge-Ram in Fox Lake, Ill.

“Given the number of people affected and the sensitive type of information exposed, dealers should understand the basics of the breach and what it means for their customers,” he continued.

“If dealership personnel do get questions, it is important to first explain that the reported breach occurred at Equifax, and does not involve the dealership, data stored at the dealership or dealership processes,” Scarpelli went on to state.

Scarpelli suggested that dealerships should review guidance provided by the Federal Trade Commission regarding the Equifax matter. He also recommended that the FTC’s guidance can be even more help if F&I office personnel spot a fraud alert or encounter a frozen credit report.

“Dealers and their employees should also be aware that there are already scammers trying to take further advantage of the Equifax breach by calling consumers and trying to obtain personal information through false pretenses,” Scarpelli wrote.

The NADA chairman closed by touching on one other compliance element the Equifax incident might give dealerships a chance to re-examine.

“Lastly, this is a good reminder for dealers to revisit their Red Flags program to ensure that they are taking the required steps to detect and prevent scammers from opening a line of credit using someone else’s information,” he wrote in the blog post here.

CoreLane debuts cloud-based tool to connect DMS and LOS systems

ORANGE, Calif. - 

CoreLane Technologies, a provider of innovative transactional connectivity solutions for automotive dealers and finance companies, on Monday announced the launch of CreditLane, a low-cost, scalable cloud-based platform for delivering data between dealers and finance companies.

CoreLane will debut the new platform this week at the defi SOLUTIONS Annual Client Summit in Las Colinas, Texas.

CoreLane explained the CreditLane platform can integrate with the dealer management system (DMS) and the finance company’s loan origination system (LOS), enabling the implementation of the system without the need for extensive training.

CreditLane receives contract information directly from the dealer’s DMS and transmits it to finance company, eliminating the possibility of keystroke errors caused by entering information multiple times. The finance company instantly receives the application through its LOS and responds with a decision that generates an alert and messages on the dealer’s DMS. 

The final deal structure is pushed back into the dealer’s DMS, reducing errors and streamlining funding.

CreditLane also enables finance companies to grow their portfolios by providing them visibility to a broad array of dealers. The CreditLane Lender Directory can provide marketing information to prospective dealers so finance companies can easily identify, connect and submit applications to CreditLane providers.

 “Since transitioning to the CreditLane platform, we have seen a positive impact on our ability to streamline our process and improve communication. The functionality of having real time updates between dealers and our origination departments has significantly reduced the time between receiving an application and being able to approve and fund the deal,” said Vic Amin, senior vice president of sales and marketing at Veros Credit. 

“The efficiencies we’ve gained make every interaction faster and easier, which in turn, has helped to reduce our overall operating costs,” Amin continued.

 “We also wanted a solution that could accommodate our continued growth, and the CreditLane platform gives us the necessary customization and scalability to maximize productivity at a pace that we set,” Amin went on to say.

Bill Medved, senior vice president of technology and operations of CoreLane, is confident other finance companies can achieve the same benefit as what Veros Credit has experienced.

“We’ve spent over a year researching how dealers and lenders currently submit and process applications,” Medved said. “Based on the result of that research, we’ve partnered with multiple DMS providers and integrated with defi SOLUTIONS to develop CreditLane. 

“We look to partner with all key industry stakeholders to provide solutions that are ‘one-click simple,’” he went on to say.

As mentioned, CoreLane will be pushing out its new tool during defi SOLUTIONS’ event — defi FEST — at the NYLO hotel in Las Colinas, Texas, beginning on Tuesday.

During the event, defi SOLUTIONS will share company and product insights and information, and encourage collaboration through discussions and idea-sharing. The defi SOLUTIONS business model centers around collaboration, and this annual round-up of clients, partners and company team members is an opportunity to make certain everyone is benefitting from defi relationships and the defi lending platform of services.

 “This year we’re offering more sessions and topics of interest to our clients,” said Kartheek Veeravalli, defi’s chief product officer. “We’ve grown quickly, so we’ll also take this opportunity to make sure our clients are aware of the latest and greatest services our auto lending platform has to offer, such as Auto Structuring.”

An entire session will be devoted to the defi auto loan origination system (LOS) Auto Structuring capability, which automatically structures counter-offers according to a client’s individually customized credit policy rules. Other defi SOLUTIONS sessions include the Q&A company and product roadmap with chief executive officer Stephanie Alsbrooks and others from the defi executive team, two-way texting in loan management and servicing, the need for speed in current systems and architecture, as well as a presentation from defi chief operating officer Georgine Muntz on the use of technology in competitive strategy.

Additionally, defi partners will be presenting ‘bottom-line’ benefits case studies.

“Our sponsors are an integral part of this event,” said Patty Jefferson, defi SOLUTIONS vendor relationship manager. “defi clients won’t want to miss out on their interactive roundtable sessions.”

Digital Matrix System (DMS) is the event’s Big Kahuna sponsor. Other partners include AUL, Black Book, Cedar Document Technologies, Clarity Services, Corelane Technologies, Dealertrack, eOriginal, Equifax, FactorTrust, Hatteras, Kelley Blue Book, LexisNexis Risk Solutions, Open Lending, REPAY, RouteOne, Solutions by Text and TransUnion.

ARA and RDN partner to bolster finance companies and repo agencies

IRVING, Texas - 

The American Recovery Association (ARA) announced a new partnership on Friday with Recovery Database Network (RDN), a business unit of KAR Auction Services.

The organizations highlighted the agreement will help finance companies manage and monitor vendor compliance by integrating ARA’s Compliance Monitoring System and compliance metrics with the various software solutions offered by RDN.

RDN VendorVision is a secure, web-based compliance management platform that connects companies with their vendors.

“This partnership will make RDN VendorVision a central component of the ARA’s broad portfolio of exclusive member benefits,” ARA president Dave Kennedy said.

“By integrating RDN’s Recovery Solution and VendorVision products with ARA’s Compliance Monitoring System, clients will now have the ability to set standards and verify the necessary compliance training required for their recovery vendor network — creating a ‘culture of compliance’ within the American Recovery Association,” Kennedy continued.

There are currently nearly 150 finance companies already utilizing both the RDN and the ARA systems. Both organizations stressed that these providers as well as repossession agents within the industry can benefit from this partnership.

“RDN is committed to supporting our lending partners with simplified, integrated and efficient products and services,” said Michael Briggs, president and chief executive officer of CarsArrive and RDN. “By working with ARA, we can help promote, monitor and manage compliance and meet the shared needs of repossession agents and lenders.”

The RDN partnership is just one of the many benefits offered to ARA members. Some of ARA’s other partnerships and member benefits include AW Direct, Experian Auto-check, Goodyear Tires, Direct Connect, Cruise One, Harding Brooks Insurance, National Independent Auto Dealers Association and PRIOS.

For more information about ARA, its partnerships and its member benefits, visit repo.org.

Hudson Cook broadens footprint into Texas

HANOVER, Md. - 

Hudson Cook now has a legal team in the Lone Star State.

This week, Hudson Cook expanded its nationwide footprint by adding a new office in the Dallas/Fort Worth metroplex. The office in downtown Fort Worth opened on Aug. 16. This location is the firm’s first office in Texas and 13th office nationwide.

Partner Hurshell Brown and of counsel Curtis Linscott will anchor the office along with associate Andrea Cottrell. Before joining Hudson Cook, Brown and Cottrell had their own firm of Brown & Cottrell, while Linscott most recently worked at Cash America.

“We are excited to be moving into the thriving Texas legal market,” Hudson Cook chairman Michael Benoit said. “The DFW office will help us better serve our existing clients, as well as bring new opportunities to the firm.”

Brown began practicing law in the consumer finance industry in 2007 as an in-house attorney for Cash America. Most recently, he served as a managing member of Brown & Cottrell, representing clients operating in the consumer financial services and FinTech industries, including installment lenders, retail installment lenders, payday lenders, pawnbrokers and service providers.

Brown assists clients in complying with state and federal consumer financial laws and represents lenders and consumer finance companies with regulatory compliance, due diligence, and developing compliance-focused solutions to business operations for both storefront and online operations.

Linscott joined Cash America in 1995 as director, associate general counsel, and served as lead counsel for the company and its subsidiaries in real estate acquisition, disposition and leasing transactions, construction matters, franchising, intellectual property and general corporate matters.

Linscott was named general counsel in 2005 and appointed executive vice president in 2006. He established the company’s first formal compliance department and built out a robust compliance management program, including developing staff, formal policies and procedures, monitoring and testing programs, and board reporting, all geared toward the complex regulatory compliance environment for the financial services industry.

Cottrell began her legal career with Brackett & Ellis where she worked in civil litigation and insurance defense. In 2010, she joined Cash America as director, corporate counsel. She was actively involved in the CFPB’s regulatory exams and supported the compliance function by counseling on exam responses, completing law reviews, revising loan documents and consulting with IT on system changes.

Cottrell has substantial knowledge of marketing and advertising law in both the traditional and digital spaces, and serves clients in those areas.  After the Cash America merger, Cottrell joined Brown & Cottrell, assisting clients in the creation, implementation and management of compliance management systems and counseled clients on responding to MRAs from the Consumer Financial Protection Bureau. She drafted original and revised existing policies/procedures and guided clients through implementation.

Hudson Cook’s Dallas/Fort Worth office is located at 500 Main Street, Suite 310 in Fort Worth.

Free webinar on CFPB’s new arbitration rule

In other firm news, Hudson Cook is hosting a free webinar on Sept. 21, beginning at noon ET to discuss the CFPB’s new arbitration rule.

Benoit along with two other Hudson Cook partners, Eric Johnson and Nikki Munro, will use the hour-long session to highlight scope, requirements and substance of the rule, political and legal challenges to the rule, and the potential impact of the rule on the automotive finance industry.

Participants will have an opportunity to ask questions and will receive a copy of the presentation materials following the live event.

Registration for the webinar can be completed here.

Early fallout of Equifax breach that might impact 143 million consumers

CARY, N.C. - 

From lawmakers to law firms, Equifax now is in the middle of a financial hurricane as the credit bureau announced late on Thursday that a cybersecurity incident potentially impacted approximately 143 million U.S. consumers.

In its announcement, Equifax said criminals exploited a U.S. website application vulnerability to gain access to certain files. Based on the company’s investigation, the unauthorized access occurred from mid-May through July. 

The company added that has found no evidence of unauthorized activity on Equifax's core consumer or commercial credit reporting databases.

Equifax said the information accessed primarily includes names, Social Security numbers, birth dates, addresses and, in some instances, driver's license numbers.  In addition, credit card numbers for approximately 209,000 U.S. consumers, and certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers, were accessed, according to the company’s announcement.

As part of its investigation of this application vulnerability, Equifax also identified unauthorized access to limited personal information for certain U.K. and Canadian residents. Equifax said it will work with U.K. and Canadian regulators to determine the appropriate next steps. 

The company also noted has found no evidence that personal information of consumers in any other country has been impacted. 

Equifax indicated that it discovered the unauthorized access on July 29 of and acted “immediately to stop the intrusion.” The company said it promptly engaged a leading, independent cybersecurity firm that has been conducting a comprehensive forensic review to determine the scope of the intrusion, including the specific data impacted.

Equifax also reported the criminal access to law enforcement and continues to work with authorities.  While the company’s investigation is substantially complete, it remains ongoing and is expected to be completed in the coming weeks.   

"This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do. I apologize to consumers and our business customers for the concern and frustration this causes,” Equifax chairman and chief executive officer Richard Smith said.

“We pride ourselves on being a leader in managing and protecting data, and we are conducting a thorough review of our overall security operations,” Smith continued. “We also are focused on consumer protection and have developed a comprehensive portfolio of services to support all U.S. consumers, regardless of whether they were impacted by this incident.”

By lunchtime on Friday, more than a half dozen shareholder rights law firms push out announcements regarding their own investigations. Attorney John Yanchunis of ClassAction.com and Morgan & Morgan already had filed a class action lawsuit against Equifax in the Northern District of Georgia.

Part of what is intensifying plaintiff attorneys’ efforts is what San Diego-based firm Johnson Fistel highlighted. It’s what a pair of high-level Equifax executives did, according to regulatory filings.

“(These filings) show on Aug. 3, just days after the July 29 breach discovery, chief financial officer John Gamble sold shares worth $946,374 and Joseph Loughran, president of U.S. information solutions, exercised options to dispose of stock worth $584,099,” Johnson Fistel said in a news release.

On Capitol Hill, members of Congress want more answers, too. And not just from Equifax. Rep. Ted Lieu, a California Democrat, is seeking a U.S. House Judiciary Committee hearing.

“In light of recent events, I request the committee call upon representatives from the Big 3 credit reporting agencies — Experian, TransUnion and Equifax — to testify not only on the breach that occurred in May 2017, but also to identify how each company is taking proactive, defensive steps to prevent such breaches in the future,” Lieu said.

“Congress has a strong role to play in preventing such attacks on our financial and IT infrastructure, and must hold those entrusted with our most sensitive data to account,” he added.

Equifax went on to say that it has engaged a leading, independent cybersecurity firm to conduct an assessment and provide recommendations on steps that can be taken to help prevent this type of incident from happening again.

“I’ve told our entire team that our goal can’t be simply to fix the problem and move on. Confronting cybersecurity risks is a daily fight. While we’ve made significant investments in data security, we recognize we must do more. And we will," Smith said.