Compliance

NY attorney general — an aggressor in automotive regulation — resigns amid abuse allegations

ALBANY, N.Y. - 

An attorney general who previously had taken aggressive regulatory and enforcement actions within the automotive space has resigned amid allegations of physical abuse against women.

According to a report published on Monday afternoon in The New Yorker, New York attorney general Eric Schneiderman resigned within three hours of the online recap of on-the-record allegations from a pair of former sexual partners of the Empire State’s top law enforcement official, plus more claims from two other women who requested anonymity.

Allegations of physical violence and explicit sexual activity filled the report, to which Schneiderman retorted: “It’s been my great honor and privilege to serve as attorney general for the people of the state of New York.

“In the last several hours, serious allegations, which I strongly contest, have been made against me,” he continued in a statement sent to SubPrime Auto Finance News. “While these allegations are unrelated to my professional conduct or the operations of the office, they will effectively prevent me from leading the office’s work at this critical time. I therefore resign my office, effective at the close of business on May 8, 2018.”

While the book might be closed on Schneiderman’s tenure as New York attorney general, he left quite a mark with actions that have connections to auto financing.

Most recently, Schneiderman sent formal inquiries regarding data security last September to Experian and TransUnion following the Equifax data breach that potentially exposed the personal information of 143 million consumers.

Not long after Volkswagen made some progress in satisfying “Dieselgate” issues with federal regulators, Schneiderman led the charge in July 2016 with lawsuits against Volkswagen as well as Audi and Porsche, saying the automakers fitted vehicles with illegal “defeat devices” that concealed illegal amounts of harmful emissions and then allegedly attempted to cover up their behavior.

In July 2015, Schneiderman raked in a multi-million dollar settlement with three dealerships in a development associated with the alleged unlawful sale of credit repair and identity theft prevention services, and other “after-sale” items. Officials explained the agreement, which returns more than $13.5 million in restitution to consumers, concludes an investigation into these dealerships for the alleged sale of finance office products to 15,000 consumers — items that in some cases added more than $2,000 in “hidden costs and fees” onto the sale or lease price of a single vehicle.

 

ARS to outsource assignments via MBSi’s repossession platform

PHOENIX and EL DORADO HILLS, Calif. - 

MBSi Corp., and American Recovery Service (ARS) recently broadened their relationship.

The repossession assignment software and vendor compliance solutions provider and national repossession services firm are expanding their partnership as ARS will soon begin outsourcing repossession assignments through MBSi’s repossession assignment platform, Recovery Connect.

The companies indicated the first phase will involve assignments from their largest client, with future phases including other MBSi clients and potentially other ARS clients as well.

Executives explained this outsourcing change can allows ARS, which currently utilizes Compliance Made Easy, MBSi’s compliance and training management platform, to more effectively manage repossession compliance down to the individual assignment level.

“We are proud to continuously exceed industry compliance standards,” ARS chief operations officer Dave Copeland said. “Outsourcing through MBSi’s Recovery Connect platform, enables ARS to provide the recovery agent with real-time account status checks, geo-updates and instant ‘on-hook’ reporting of recoveries.”

ARS and MBSi have already began the integration effort necessary to put this announcement into practice and expect to begin by migrating assignments to Recovery Connect by early summer with further MBSi clients being completed by the fall.

“ARS has long been an innovative leader in the recovery industry, and we are proud that they have chosen to expand their partnership with MBSi. It is validation that MBSi’s focus on solutions that improve the efficiency and compliance during the recovery process is taking hold,” MBSi president Cort DeHart said.

Currently more than 2,000 recovery companies utilize MBSi’s platforms, including Recovery Connect, to manage and process repossession assignments. All of these agents have access to MBSi’s Recovery Connect mobile app and will soon be able to receive ARS assignments, check statuses and transmit Smart Updates with a single button.

Additionally, as Recovery Connect is integrated with both Clearplan and RepoRoute, the agent’s assignments can seamlessly transfer to their routing solution of choice.

Wells Fargo enters consent orders with $1 billion civil penalties

SAN FRANCISCO  - 

Wells Fargo said Friday it has entered consent orders with the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, under which the company will have to pay civil penalties totaling $1 billion.

The consent orders with the OCC and CFPB deal with matters involving Wells Fargo’s compliance risk management program in addition to “issues regarding certain interest rate-lock extensions on home mortgages and collateral protection insurance (CPI) placed on certain auto loans,” the company said in a news release.

Wells Fargo said the issues around interest rate-lock extensions and CPI have been disclosed previously.

The consent order also requires Wells Fargo to submit plans on how it is continuing to augment compliant and risk management as well as how it is approaching customer remediation.  Those plans are to be reviewed by the Wells Fargo board.

“For more than a year and a half, we have made progress on strengthening operational processes, internal controls, compliance and oversight, and delivering on our promise to review all of our practices and make things right for our customers,” said Timothy Sloan, president and chief executive officer of Wells Fargo, in a news release.

“While we have more work to do, these orders affirm that we share the same priorities with our regulators and that we are committed to working with them as we deliver our commitments with focus, accountability, and transparency,” Sloan said. “Our customers deserve only the best from Wells Fargo, and we are committed to delivering that.”

4 trade associations cheer Senate vote to repeal CFPB auto finance bulletin

WASHINGTON, D.C. - 

Four of the industry associations with significant presence on Capitol Hill celebrated on Wednesday after the U.S. Senate passed a Congressional Review Act Resolution (S.J. Res. 57) to repeal the 2013 Auto Finance Bulletin issued by the Consumer Financial Protection Bureau.

To recap, industry representatives maintained that the CFPB’s 2013 Bulletin on indirect auto financing and fair lending guidance was issued “without any public comment, consultation with other regulatory agencies or transparency." They added the 2013 bulletin created an “environment of uncertainty, where greater clarity is needed, and should have been provided as a formal notice and comment rulemaking, with appropriate input from all stakeholders.”

On Wednesday, the Senate approved S.J. Res 57 by a 51-47 vote. The vote on the resolution, under the Congressional Review Act (CRA), disapproves of the guidance.

“The vehicle finance market in the United States is a highly-competitive market, which benefits consumers as dealers and lenders discount pricing and loan rates to sell and finance new and used vehicles,” said Chris Stinebert, president and chief executive officer of the American Financial Services Association, a trade association representing vehicle finance companies. “The vote today is in the best interests of the car-buying public.”

The House of Representatives is expected to vote on its version of the bill soon, according to industry representatives.

“CBA member banks are strongly committed to ensuring fair lending policies and practices while fulfilling consumers’ financial needs. For that reason, it is critical to have clear rules and guidance from regulators so our member banks can be certain of compliance. The CFPB’s 2013 Auto Bulletin was a backdoor attempt at rulemaking without notice or comment and lacked the clarity needed by lenders,” Consumer Bankers Association President and CEO Richard Hunt said.

“We thank Senators Jerry Moran (R-Kan.) and Pat Toomey (R-Penn.) for leading the effort in the Senate and Majority Leader Mitch McConnell for bringing the resolution to the Senate floor for a vote,” Hunt continued. “We encourage the House to swiftly pass this resolution as well.”

From the dealer side, the sentiment poured in with similar tones, starting with National Automobile Dealers Association president and CEO Peter Welch.

“S.J.Res. 57 continues the bipartisan effort that began years ago to preserve the ability of local dealerships to offer discounted auto loans to their customers, and Sen. Moran is to be commended for his leadership on this issue,” Welch said.

“S.J.Res. 57 is a narrowly-tailored joint resolution that does not amend or change any fair credit law or regulation or impair their enforcement. The legislation is a measured response to the CFPB’s attempt to regulate the $1.1 trillion auto financing market, avoid congressional scrutiny by issuing ‘guidance,’ and impose a new policy without necessary procedural safeguards,” Welch continued.

“We hope this CRA resolution sees swift action in the House of Representatives, which has already demonstrated strong bipartisan support for repealing the CFPB’s flawed guidance and preserving important auto loan discounts for consumers,” Welch went on to say.

Cody Lusk, who is president and CEO of the American International Automobile Dealers Association, also shared his upbeat reaction.

“The CFPB, established to regulate Wall Street, never should have involved itself in dealership operations,” Lusk said. “Today’s vote is confirmation to dealers everywhere that the agency overreached when issuing its 2013 indirect auto financing guidance. The agency concluded, without accurate supporting data, that dealerships were using race as a determining factor when issuing loans. Today the senate has righted a wrong.”

Not all assessments about Wednesday’s developments were as rosy as what these four associations shared. For example, when asked about the Senate’s attempt to roll back the effort to prevent “discrimination” in auto-finance market, Buckley Sandler partner John Redding recently made these points.

“While the CFPB’s 2013 Bulletin on dealer markup is considered offensive by many in the industry, the Senate bill introduced last month to eliminate it is not going to change much,” Redding said.

“The pursuit to eliminate the bulletin may have more to do with the fact that the ‘industry has found it offensive that (lenders) be responsible at the finance source level for actions that they don’t undertake,” he continued.

“If you get rid of the bulletin,” Redding went on to say, “I’m not sure it changes a whole lot at the bureau except for the ability of industry to point at the bulletin and say, ‘I did everything you told me to do in your rule, and yet you are coming after me for doing exactly that.’”

Even more extreme was the negative reaction from Jerry Robinson, a former worker at Santander Consumer USA and a member of the Committee for Better Banks, which describes itself as a coalition of bank workers, community and consumer advocacy groups and labor organizations coming together to improve conditions in the banking industry.

“I worked in auto lending for almost six years,” Robinson said in a statement sent to SubPrime Auto Finance News. “Most of my customers desperately needed a car to drive to work and support their family, and Santander Consumer was all too willing to capitalize on that desperation — with tricks like impossibly high interest rates and discriminatory loans.

“The Senate’s actions today were a big win for injustice and inequality — and they endanger working communities across the United States,” Robinson added.

CFPB roundup: Measures to remove auto finance guidance and Mulvaney on the Hill

WASHINGTON, D.C. - 

In another busy week of activities associated with the Consumer Financial Protection Bureau, the American Financial Services Association joined with the National Automobile Dealers Association and other sister trade associations in supporting S.J. Resolution 57 to disapprove the CFPB’s 2013 auto finance guidance.

On March 22, Sen. Jerry Moran (R-Kan.) introduced S.J. Res. 57. This legislation has been co-sponsored by 20 senators. Then earlier this week, Rep. Lee Zeldin (R-N.Y.) introduced H.J Resolution 132, the House companion to S.J. Res. 57.

AFSA explained these two pieces of legislation are unique Congressional Review Act (CRA) resolutions. As such, these resolutions need only a simple majority to pass and cannot be filibustered in the Senate.

The associations reiterated that the CFPB auto financing policy, issued through guidance, directed fundamental market changes “without a transparent rulemaking process to assess the impact on consumers.

“This guidance was issued without any public comment, consultation with CFPB’s sister agencies or transparency,” AFSA continued in a statement.

“AFSA supports Sen. Moran and Rep. Zeldin for taking the lead on this initiative. A vote in Congress is possible later this month,” the organization went on to say.

NADA explained that it supports S.J. Res. 57/H.J. Res. 132 because the CFPB’s guidance pressured indirect auto finance companies to eliminate consumer discounts on auto credit by dealers. 

“This policy, issued without prior notice or public comment, would have raised credit costs for auto buyers,” NADA said.

“Additionally, many members of Congress view the CFPB’s guidance as a roundabout attempt to regulate dealers, despite the dealers’ statutory exemption from the CFPB’s jurisdiction (Sec. 1029(a) of Dodd-Frank).

Enactment of S.J. Res. 57/H.J. Res 132 would deter similar improper regulatory action in the future,” according to NADA, which also told dealers that they are encouraged to contact their senators and representatives to voice their support for this legislation.

Mulvaney on Capitol Hill

Also this week, acting director CFPB director Mick Mulvaney appeared during hearings orchestrated by both the House Committee on Financial Services as well as the Senate Banking Committee.

According to his written testimony to each chamber and shared by the CFPB, Mulvaney gave a compliance update that likely should please auto finance companies and dealerships large and small.

“In another change, the bureau practice of ‘regulation by enforcement’ has ceased,” Mulvaney told lawmakers. “The bureau will continue to enforce the law. That is our job, and we take it seriously.  However, people will know what the rules are before the bureau accuses them of breaking those rules.

“Through the changes I have discussed and others, I am making sure the bureau is operating within its statutory mandate, is accountable for its actions, and is doing the American people’s business in ways that are efficient and effective,” he continued.

Coinciding with his visits to Capitol Hill, the bureau issued a request for information (RFI) on its handling of consumer complaints and inquiries. The CFPB is seeking comments and information from interested parties to assist the bureau in assessing its handling of consumer complaints and consumer inquiries and, consistent with law, considering whether changes to its processes would be appropriate.

To date, the bureau said it has received 1.5 million consumer complaints.

This is the 12th in a series of RFIs announced as part of Mulvaney’s call for evidence to ensure the bureau is fulfilling its proper and appropriate functions.

“This RFI will provide an opportunity for the public to submit feedback and suggest ways to improve outcomes for both consumers and covered entities,” the CFPB said.

The series of RFIs coupled with other actions by the bureau under Mulvaney’s leadership frustrated Rep. Maxine Waters (D-Calif.), ranking member of the House Committee on Financial Services.

“Let me say at the outset that Mr. Mulvaney is not the acting director of the Consumer Financial Protection Bureau,” Waters said in her opening statement during this week’s hearing.

“He was illegally appointed by President Trump in a move that blatantly contradicts the Dodd-Frank statute, which is very clear that the deputy director of the agency shall serve as acting director in the case of absence or unavailability of the director,” she continued.

“I want to be very clear that Democrats’ participation in this hearing is not in any way an acknowledgment of Mr. Mulvaney’s legitimacy at the Consumer Bureau. Nonetheless, given the many impactful and indeed harmful decisions Mr. Mulvaney is making with regard to the Consumer Bureau, it is necessary for us to engage with him in an oversight capacity here today while the courts decide who should actually be in charge,” Waters went on to say.

The California lawmaker later added, “And it is very clear that Mr. Mulvaney is indeed carrying out this president’s agenda at the Consumer Bureau. He has taken a series of actions that weaken the agency’s ability to carry out its important mission and benefit the predatory actors that the agency is designed to police.”

Mulvaney’s appearance before the House contingent can be watched here or through the window at the top of this page.

CFPB acting director requests 4 major changes to bureau operations

WASHINGTON, D.C. - 

As another state in the Northeast established an consumer protection agency that resembles the one at the federal level, the acting director of the Consumer Financial Protection Bureau included what he called a “request that Congress make four changes to the law to establish meaningful accountability for the bureau.”

Mick Mulvaney made the declaration this week as the CFPB released its semi-annual report highlighting the bureau’s work. This is the first report issued by Mulvaney, and it includes his four recommendations for statutory changes to the bureau.

“The bureau is far too powerful, with precious little oversight of its activities,” Mulvaney said. “The power wielded by the director of the bureau could all too easily be used to harm consumers, destroy businesses or arbitrarily remake American financial markets.

“I’m requesting that Congress make four changes to the law to establish meaningful accountability for the bureau. I look forward to discussing these changes with Congressional members,” he went on to say.

In the report’s introduction letter, Mulvaney recommends four changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The first recommendation is to fund the Bureau through Congressional appropriations. The second is to require legislative approval of major rules.

His third recommendation is to ensure that the director answers to the president in the exercise of executive authority. And the fourth is to create an independent inspector general for the bureau.

“I have no doubt that many members of Congress disagree with my actions as the acting director of the bureau, just as many members disagreed with the actions of my predecessor,” Mulvaney said in that opening letter. “Such continued frustration with the bureau’s lack of accountability to any representative branch of government should be a warning sign that a lapse in democratic structure and republican principles has occurred.

“This cycle will repeat ad infinitum unless Congress acts to make it accountable to the American people,” he added.

The complete semi-annual report from the CFPB can be downloaded here.

Initial reaction to Mulvaney moves

As Mulvaney reference about the assessment of bureau performance by lawmakers, observers who closely watch activities on Capitol Hill and beyond offer reaction that demonstrated the polar-opposing views of the potential CFPB changes.

Consumer Bankers Association president and chief executive officer Richard Hunt gave an upbeat assessment of Mulvaney’s recommended statutory changes to the CFPB.

“We appreciate acting CFPB director Mick Mulvaney’s goal of bringing greater accountability to the bureau,” Hunt said

“We look forward to hearing further details from acting director Mulvaney on his policy proposals in his upcoming testimony before Congress, and we strongly believe an independent, bipartisan commission at the CFPB — not subject to the political shifts of changing administrations — is the best way forward to provide for accountability, certainty and stability at the CFPB,” Hunt went on to say.

Meanwhile, consumer advocacy organization Allied Progress sent a press release to SubPrime Auto Finance News in which the subject line blared, “Mulvaney Goes in for the Kill, Asks Congress to Cripple the CFPB.”

Karl Frisch, executive director of Allied Progress, elaborated on the organization’s stance.

“Mick Mulvaney knows the work of the CFPB is extremely popular with consumers. That is why he didn’t propose the outright elimination of the bureau – though that is effectively what he is seeking. The CFPB was designed to be an independent financial watchdog so that politicians in D.C. who take millions from Wall Street special interests can’t easily stop its important work,” Frisch said.

He continued, “Mulvaney wants to put members of Congress in charge of the CFPB’s funding and require congressional approval of its consumer protection rules because he knows it will grind the bureau’s work holding big banks, predatory lenders and other bad financial actors to a halt. Who better to go to bat against the CFPB than a bunch of D.C. politicians on the take from Wall Street special interests.”

“The courts have already ruled that it is perfectly constitutional to prohibit the President from firing the CFPB’s director without cause. Under the law, the President can appoint a new director when the previous director steps down or their five-year term expires. That’s not a good enough for Mulvaney and Wall Street. They won’t stop until the CFPB’s director constantly wonders if defending consumers and holding industry accountable on any given day will cost them their job,” Frisch concluded.

CFPB-like agency now in New Jersey

In related developments, New Jersey joined Pennsylvania in creating a regulator that acts similar to the CFPB, but on a state level.

New Jersey attorney general Gurbir Grewal recently announced that Governor Phil Murphy will nominate Paul Rodriguez to serve as the director of the New Jersey Division of Consumer Affairs, the lead state agency charged with protecting consumers’ rights, regulating the securities industry and overseeing 47 professional boards.

Grewal explained Rodriguez’s selection highlights the administration’s efforts to fill the void left by the Trump Administration’s “pullback” of the CFPB, fulfilling one of Murphy’s promises to create a “state-level CFPB” in New Jersey.

Rodriguez, a New Jersey native, is currently serving as acting counsel to New York City Mayor Bill de Blasio where he provides advice and strategic guidance to the mayor and top administrative officials on legal, management and policy objectives. As a member of Mayor de Blasio’s senior management team, Rodriguez was dedicated to ensuring a fairer and more just city for all.

“As the federal government abandons its responsibility to protect consumers from financial fraudsters, it is more important than ever that New Jersey picks up the mantle to protect its own residents,” Grewal said. “Paul has the energy and ability necessary to lead the Division as we work to protect New Jerseyans from fraud and professional misconduct in the marketplace.”

During his time in city government, Rodriguez managed numerous aspects of de Blasio’s human rights, equity and “good government” reform agendas, including transparency, worker equity and expansions to the Human Rights Law.

Before joining the de Blasio administration, Rodriguez was an associate at Simpson Thacher & Bartlett in New York City where he worked in a variety of areas, including financing transactions, securities regulation, and intellectual property. His pro bono work for the firm included assisting with the negotiation of a multi-million dollar framework agreement on behalf of indigenous tribes in Peru.

Rodriguez also served as the Simpson Thacher & Bartlett extern to Brooklyn Legal Services Corporation A, representing nonprofits dedicated to serving low-income communities. He previously served as a projects specialist and senior staff member for U.S. Senator Frank Lautenberg, specializing in transportation, infrastructure, organized labor, and homeland security.

Rodriguez will begin serving as acting director of the Division of Consumer Affairs on June 1. Murphy will formally nominate Rodriguez to the position, which is subject to the advice and consent of the State Senate.

In the interim, Kevin Jespersen will serve as acting director of the division, a position currently held by Sharon Joyce, who is transitioning to lead the Office of Attorney General’s newly created Office of the New Jersey Coordinator of Addiction Response and Enforcement Strategies (NJ CARES).

“Kevin is a consummate professional and a trusted member of my leadership team. His willingness to step in as acting cirector ensures that the Division of Consumer Affairs will be in capable hands during this time of transition,” Grewal said. “I am grateful for all Sharon has accomplished during her tenure in Newark, both as deputy director of the Division of Law and as acting director of the Division. Now that she is free to dedicate herself fully to her role as director of NJ CARES, I look forward to Sharon’s continued successes as she leads New Jersey’s fight to end the deadly scourge of addiction.”

All of the developments in New Jersey arrived less than a year after Pennsylvania’s attorney general took similar steps in creating an agency like the CFPB.

FTC responds to CFPB info request about CIDs

WASHINGTON, D.C. - 

Industry associations and private and publicly traded companies aren’t the only entities replying to a request for information issued by the Consumer Financial Protection Bureau.

Last week, the Federal Trade Commission’s Bureau of Consumer Protection (BCP) filed a comment to the CFPB in response to that agency’s request for information to help it assess the process it uses to issue civil investigative demands (CIDs).

The FTC acknowledged CIDs are a key tool in investigating potential law violations and bringing enforcement actions to stop illegal conduct and provide relief to consumers. A CID from either the FTC or the CFPB may seek written answers to interrogatories, documents, tangible things, oral testimony, or some combination of all of these.

In particular, the CFPB sought input "on how best to achieve meaningful burden reduction or other improvements," while continuing to achieve its statutory and regulatory objectives. The FTC’s comment describes its experience with CIDs, including recent reforms.

“We applaud the Bureau of Consumer Financial Protection for undertaking a critical assessment of its investigative processes,” said Thomas Pahl, acting director for BCP. “We hope our comment describing BCP’s experience with CIDs, including recent reforms, is valuable to the bureau in making its investigative processes efficient and effective.

“We look forward to a continued partnership with the Bureau on this and other issues in pursuing the agencies’ shared goal of protecting American consumers,” Pahl continued.

In response to the request for comment, the FTC’s Bureau of Consumer Protection explained its procedures for issuing consumer protection CIDs, provided feedback on Bureau of Consumer Financial Protection processes in response to specific requests for information, and outlined generally reforms that the FTC’s Bureau of Consumer Protection implemented in July 2017 related to consumer protection CIDs.

Those measures include:

—Adding more detail about the scope and purpose of investigations to give companies a better understanding of the information sought

—Limiting the relevant time periods to minimize undue burden on companies and focus the commission’s finite resources on investigating harms that have an immediate impact on consumers

—Shortening and simplifying the instructions for providing electronically stored data

—Increasing response times for CIDs, where appropriate

The commission vote approving the comment was 2-0.

Dissecting implications of latest appeals court actions involving TCPA

FORT LAUDERDALE, Fla. - 

In its long-awaited ruling addressing the Federal Communications Commission’s 2015 Declaratory Ruling and Order, the U.S. Court of Appeals for the D.C. Circuit partially upheld and partially set aside challenges to four specific provisions that had been intended to offer clarity on the Telephone Consumer Protection Act (TCPA).

In ACA International v. FCC, the D.C. Circuit set aside and vacated the expansion of the definition of “autodialer” or “ATDS” and the treatment of reassigned cell phone numbers, while upholding the broadening of the called party’s ability to revoke consent and the exemption for certain time-sensitive health care communications. While addressing some of the concerns raised by the petitioners’ challenges to the 2015 order, the court’s ruling does not offer much clarity on the provisions it set aside, and the uptick of TCPA litigation will not likely subside.

With respect to the expanded autodialer definition, the court took issue with the 2015 order’s inclusion of a device’s “potential functionalities” or “future possibility” and found that, if a device could be modified via a software change or an app download, this would make every smartphone an ATDS under the TCPA. With this expansive impact, the court found that the attempt to construe the term “capacity” as used in the statutory definition of ATDS was untenable. It held that allowing such expansion would mean “that nearly every American is a TCPA-violator-in-waiting, if not a violator-in-fact.” The court ultimately ruled that the 2015 order’s expansion of the definition of “capacity” was an unreasonable and impermissible interpretation of the TCPA, and when considered in combination with the lack of clarity about which functions qualify a device as an autodialer, the court found that this portion of the 2015 order had to be set aside.

The other provision of the 2015 order that the court set aside was the treatment of circumstances in which a consenting party’s cell phone number has been reassigned to another person. Under the 2015 order, the FCC allowed a one-call safe-harbor provision to the caller, despite recognizing that a single call is often not enough to allow the caller to become informed of the number’s reassignment. The court found that this limited safe-harbor provision was arbitrary and capricious, as there was no explanation as to why the safe harbor was set at a single call. Further, because the mere setting aside of this provision would then mean that the caller is strictly liable for any call to a reassigned number, it held that the 2015 order’s entire treatment of reassigned cell phone numbers had to be vacated to protect the intent of the FCC in instituting the safe-harbor protection.

The court devoted much less discussion to the two provisions of the 2015 order it upheld in the face of the petitioners’ challenges. The court found that the expansion of a called party’s ability to revoke consent through any reasonable means and at any time, so long as the party clearly expresses a desire not to receive further messages, made the opt-out methods more clearly defined and easy to use. The Court did make an important notation that nothing in the 2015 order precludes the parties’ ability to agree on specific revocation procedures.

The last challenge — to the 2015 order’s exemption of certain time-sensitive health care-related calls from the TCPA’s prior express consent requirement to calls to cell phones — was also denied. The court rejected several arguments asserted by the Petitioners that this exemption conflicted with HIPAA, concluding that the FCC simply declined to make certain exchanges of health care information less burdensome than they would be by default under HIPAA.

This opinion is a setback for the plaintiff’s bar. The rollback of the rules concerning the definition of an autodialer are significant and may ultimately result in plaintiff’s counsel only pursuing suits involving a clear use of an autodialer. The ruling thus will also hopefully limit discovery into the issue of what is an autodialer. Conversely, the upholding of the rules regarding revocation of consent will adversely impact defendants in TCPA actions. However, as the court expressly noted that “[n]othing in the Commission’s order thus should be understood to speak to parties’ ability to agree upon revocation procedures,” the recent case law concerning contractual limitation on consent, outlined in Reyes v. Lincoln Automotive Financial Services, 861 F.3d 51 (2d Cir. 2017), remains good law.

Eve Cann is an associate in Baker Donelson’s Fort Lauderdale, Fla., office. She is an experienced litigator, who advises and defends businesses, including banks, mortgage lenders, servicers, in a broad range of business and commercial disputes in state and federal courts. She can be reached at ecann@bakerdonelson.com.

ARA finalizes partnership with Bridgecrest Acceptance for training and vendor vetting

IRVING, Texas - 

The American Recovery Association (ARA) landed an enhanced relationship with a finance company on Friday.

ARA announced a new partnership with Bridgecrest Acceptance, a licensed third-party servicer, servicing loans for DriveTime and other affiliated finance companies.

As part of this agreement, ARA will assist Bridgecrest in its vendor vetting, training and monitoring program. 

ARA president Dave Kennedy highlighted that the organization seeks to be a viable industry solution to the high cost of vendor training. He sees this partnership is a major benefit to Bridgecrest’s current vendor network, as it significantly reduces the financial burden placed upon them.

“We are honored to be chosen as the exclusive training program by Bridgecrest and are happy to help reduce the cost burden on vendors,” Kennedy said.

“We still believe repossessors should only have to choose one training service, but until our compliance program is accepted by everyone, we are determined to provide the best value,” he went on to say.

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

The partnership arrived about a month ahead of ARA’s annual event — the North American Repossessors Summit (NARS) — which is reaching its 10th anniversary.

NARS 2018 will be hosting more than 600 professionals from the collateral recovery and remarketing industries to gather and network. This year’s speaker lineup includes Tom Jones, scientist, author, pilot and veteran NASA astronaut, as well as other industry professionals who will focus on open and collaborative discussions about the future of collateral recovery and remarketing.

NARS now will include a two-hour open forum meeting exclusively for business owners who will be able to participate in crucial discussions of the challenges and complexities repossessors currently face in order to find solutions that help lay the foundation for the future of the industry.

The theme for the 10th annual summit is “Stronger Together: Celebrating 10 years of Leadership, Education and Unity,” with a keynote by astronaut Tom Jones delivering an inspiring story of adventure, teamwork and inspiration to motivate audiences to work hard together to overcome obstacles to their own particular mission.

This year’s schedule also includes other insightful speakers and powerful roundtable discussions, as well as other exciting events such as the sixth annual golf tournament, AT&T Stadium Tour, Harding Brooks Cocktail Party, and the Digital Recognition Network (DRN) closing party and live auction to end the summit.

The summit will be held at the Omni Mandalay Hotel at Las Colinas in Irving, Texas, on April 19-20.

To register, visit reposummit.com.

FTC and FCC hosting 2 events to examine illegal phone calls

WASHINGTON, D.C. - 

As opposed to the legitimate collections efforts put forth by dealerships, finance companies and their service providers, federal regulators are looking to curb unwanted phone calls that are out to swindle consumers.

Two upcoming events will highlight cooperative efforts by two agencies to combat illegal calls and promote innovative solutions to protect consumers

The Federal Trade Commission and the Federal Communications Commission announced two upcoming events aimed at furthering the fight against illegal robocalls and caller ID spoofing. The agencies will co-host a Policy Forum later this month and a Technology Expo in April.

Unwanted calls — including illegal robocalls, spoofed calls and telemarketing — are a major source of complaints to both the FTC and FCC. Under acting FTC chairman Maureen Ohlhausen and FCC chairman Ajit Pai, the agencies have combated this consumer problem through numerous policy-making efforts and strong enforcement actions.

“Consumers are fed up with illegal robocalls that disturb their privacy and often pitch scams,” Ohlhausen said. “We’re going to expand our fight against this scourge through initiatives like the upcoming Technology Expo and Policy Forum, which amplify our impact through close coordination with the FCC and other partners.”

“Scam robocalls and deceptive spoofing are real threats to American consumers, and they are the number one consumer complaint at the FCC,” Pai added. “We’re committed to confronting this problem using every tool we have. I’m pleased to announce these efforts in our continued work with the FTC to protect consumers.”

On March 23, the two agencies will co-host a Policy Forum at FCC headquarters to discuss the regulatory challenges posed by illegal robocalls and what the FTC and FCC are doing to both protect consumers and encourage the development of private-sector solutions. The live video feed and other information related to this event will be available here.

On April 23, the FTC and FCC will also co-host a Technology Expo for consumers at the Pepco Edison Place Gallery in Washington, D.C. This event will feature technologies, devices, and applications to minimize or eliminate the illegal robocalls consumers receive. The FTC and FCC said they have worked closely with phone companies, tech innovators, and others to find solutions for consumers to the problems of illegal robocalls and malicious spoofing.

More information on this Expo, including how innovators can seek to participate, will be available here.

In combating abusive and fraudulent calls through early 2018, the FTC’s enforcement actions have resulted in 134 lawsuits against 789 companies and individuals alleged to be responsible for placing billions of unwanted telemarketing calls to consumers. The FTC has been awarded judgments totaling over $1.5 billion and has collected over $121 million from these violators.

Under Pai, the FCC proposed more than $200 million in fines last year alone for apparent illegal spoofing by telemarketers in first-of-their-kind cases under the Truth in Caller ID Act.

In addition, the FCC has adopted new rules to allow phone companies to block robocalls that are likely to be illegal, such as those purporting to be from non-existent numbers. The agency is also seeking public input on ways to help authenticate caller ID information and reduce unwanted calls to reassigned phone numbers.

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