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Hefty Fine Against Major Bank Reminds Companies Offering Add-On Products that the CFPB Is Watching

October 15, 2015

Authors

Seyi Iwarere

Hefty Fine Against Major Bank Reminds Companies Offering Add-On Products that the CFPB Is Watching

October 15, 2015

by: Seyi Iwarere

The CFPB has issued another enforcement action exceeding the half-billion dollar mark against a large bank for its add-on product offerings. Citibank and its subsidiaries were penalized for alleged deceptive marketing, unfair billing and deceptive debt collection involving its credit card add-on products and services. This marks the tenth public enforcement action that the CFPB has announced for practices associated with marketing or administering add-on products in its four-year history.

As part of the settlement Citi was ordered to pay $700 million in restitution to about 8.8 million consumers who were impacted by the add-on product offerings. The company

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Lenders and Collectors Beware: Missouri Expands Coverage of Consumer Protection Act

September 8, 2014

Authors

Jeffrey Russell and Jonathan Potts

Lenders and Collectors Beware: Missouri Expands Coverage of Consumer Protection Act

September 8, 2014

by: Jeffrey Russell and Jonathan Potts

In companion opinions issued on August 19, 2014, the Supreme Court of Missouri held that unfair practices associated with residential foreclosures occur “in connection with” the original sale of a mortgage loan and therefore fall within the scope of the Missouri Merchandising Practices Act (“MMPA”).  See Conway v. CitiMortgage, Inc., — S.W.3d —-, No. SC 93951, 2014 WL 4086671 (Mo. banc Aug. 19, 2014); Watson v. Wells Fargo Home Mortg., Inc., — S.W.3d —-, No. SC 93769, 2014 WL 4086486 (Mo. banc Aug. 19, 2014).  In Watson, however, the court also held that unfair practices associated with loan

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Sooner or Later, You Might Go Pew

April 24, 2014

Authors

Bryan Cave Leighton Paisner

Sooner or Later, You Might Go Pew

April 24, 2014

by: Bryan Cave Leighton Paisner

For the last few years, the Pew Charitable Trust has been conducting studies of consumer financial services disclosures and urging banks and other financial institutions to adopt simplified disclosure forms. For example, in April 2012, Pew developed a model disclosure form for consumer checking accounts, and Pew reports that 26 major banks have already adopted the form (we are aware of additional banks to have adopted the form). In February 2014, Pew published a similar model disclosure form for prepaid card accounts.

Both of these Pew disclosures are similar to the “Schumer Box” disclosures used for credit cards, though of

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Will 2014 be the year of UDAP and UDAAP?

February 11, 2014

Authors

Seyi Iwarere

Will 2014 be the year of UDAP and UDAAP?

February 11, 2014

by: Seyi Iwarere

Expect 2014 to be a banner year for enforcement actions under the Unfair or Deceptive Acts or Practices law (UDAP) and the new Unfair, Deceptive or Abusive Acts and Practices law (UDAAP).  While predicting regulatory trends can be difficult, we believe this to be a safe bet in light of the trends in 2013 and early indications in bank examinations already this year.

Below are some of the enforcement trends from last year and tips highlighting what can be done to reduce the risks of UDAP and UDAAP enforcement actions in 2014.

In 2013, the FDIC imposed civil money penalties

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