A Proposition 65 Violation May Be Lurking in Your Cash Register Receipt

Many consumer-facing businesses have learned to identify high-risk Prop 65 targets:  soft, flexible plastics; faux and colored leathers; and any kind of brass or metal that may contain lead or other heavy metals.  But businesses need to take action to avoid Prop 65 liability based on a new culprit: bisphenol-A (BPA) that may be lurking in your cash register receipts and other thermal papers.  Continue Reading

Google To Ban Payday Loan Advertisements

Google announced on May 11 that effective on July 13, 2016 it will ban all payday loan advertisements from its site.  Google was responding to concerns raised by consumer advocates who argued that the lending practice exploits the poor and vulnerable by offering them immediate cash that must be repaid at exorbitant interest rates.  Google joins Facebook in prohibiting such advertisements.  The decision marks the first time that Google has announced a global ban on advertisements for a broad category of financial products.

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In Wake of Panama Papers Scandal Obama Calls for Stricter Bank Regulations, Tax Rules

In a news conference today President Obama addressed rules and proposed regulations announced Thursday intended to help the U.S. fight tax evasion and other crimes connected to anonymous offshore companies and accounts.  The announcements come after a month of intense review by the administration following the first release of the so-called Panama Papers, millions of documents stolen or leaked from Panamanian law firm Mossack, Fonseca.  The papers have revealed a who’s who of international politicians, business leaders, sports figures and celebrities involved with financial transactions accomplished through anonymous shell corporations.

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California Supreme Court Opens Door For Wrongful Foreclosure Lawsuits and Challenges to Transfers of Mortgages: Practical Implications and Options Moving Forward

In Yvanova v. New Century Mortgage Corporation et al, the Supreme Court of California reversed the Court of Appeal’s ruling, and held that a borrower plaintiff who has been subject to a nonjudicial foreclosure has standing to bring an action for wrongful foreclosure based on an allegedly void deed of trust assignment (without making any determination as to whether the alleged facts established a void assignment).  In so doing, the Supreme Court came down solidly in favor of the “aggrieved” borrower thus settling, at least in California and likely other non-judicial foreclosure states, the issue regarding the standing of such a plaintiff to challenge the acts of a securitization trust.  Since the financial crisis there have been several cases considering the standing issue, most notably the California Court of Appeal decisions in Glaski  v. Bank of America, N. A. (2011) 198 Cal. App. 4th 256 (holding the plaintiff had standing to challenge the authority of the beneficiary to foreclose) and Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal. App. 4th 497 (holding the plaintiff had no standing to enforce the terms of the agreements allegedly violated).  The Supreme Court stated “On the narrow question before us – whether a wrongful foreclosure plaintiff may challenge an assignment to the foreclosing entity as void- we conclude Glaski provides a more logical answer than Jenkins.” Continue Reading

CFPB Issues Letter on TRID Enforcement and Liability

On December 29, 2015, CFPB Director Richard Cordray sent a letter to the president of the Mortgage Bankers Association regarding implementation of the CFPB’s Know Before You Owe mortgage disclosure rule (more commonly known as the Truth in Lending and RESPA integrated disclosure rule, or TRID) responding to concerns raised by the MBA.  The letter addressed concerns that technical TRID violations are resulting in extraordinarily high rejection rates by secondary market purchasers of mortgage loans by stating that rejections based on “formatting and other minor errors” are “an overreaction to the initial implementation of the new rule” and that the risk to private investors from “good-faith formatting errors and the like” is “negligible.” Continue Reading

CFPB Publishes Bulletin on Respa Compliance and Marketing Services Agreements

For some time now, the residential lending community has been concerned that the Consumer Financial Protection Bureau has taken unclear positions with respect to marketing services agreements (MSA’s) in its enforcement actions, leaving residential lenders unsure as to how to proceed.  Some lenders, including Wells Fargo Bank and Prospect Mortgage Company, have responded to this uncertainty by terminating all of their MSA’s.  The Mortgage Bankers Association and other groups had requested that the CFPB provide some clarity as to its position on MSA’s, and the CFPB responded by issuing a press release and a compliance bulletin with respect to MSA’s on October 8.

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The California Supreme Court Holds Consumer Class Action Waivers In Arbitration Provisions Are Enforceable Under Federal Law

On August 3, 2015, the California Supreme Court issued its long-awaited arbitration decision in Sanchez v. Valencia Holding Co., LLC, No. B228027. The Court held that the arbitration provision found in a standard form auto finance and sales contract widely used by auto dealerships and lenders throughout California is not unconscionable. Not surprisingly, the Court acknowledged the recent U.S. Supreme Court authority holding that the Federal Arbitration Act (“FAA”) preempts conflicting state law, and affirmed that California law must now recognize the enforceability of class action waivers contained in arbitration provisions under the FAA. Nevertheless, arbitration provisions can be rendered unenforceable, depending on a fact intensive analysis of unconscionability. The Court refused to apply a uniform, bright-line standard. The ruling is unlikely to stem the tide of litigation over the enforceability of arbitration provisions in high stakes class action litigation.

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Court Severs Term But Otherwise Enforces Arbitration Provision With A Class Action Waiver

In a victory for Sheppard Mullin and its client, in Trabert v. Consumer Portfolio Serv., Inc., __ Cal. App. 4th. __, 2015 WL 880949 (4th Dist. Mar. 3, 2015), the California Court of Appeal compelled arbitration and enforced a class action waiver after severing an arbitration term. Continue Reading

CFPB Issues Compliance Bulletin On Confidentiality of Supervisory Information

On January 27, 2015, the Consumer Financial Protection Bureau (“CFPB”) issued a compliance bulletin reminding supervised financial institutions (including large depository institutions, credit unions and their affiliates, certain nonbanks, and service providers) of existing regulatory requirements regarding confidential supervisory information.  In this article we (i) explain the definition of confidential supervisory information; (ii) discuss exceptions to the non-disclosure rule; and (iii) offer tips for ensuring compliance. Continue Reading

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