Firm Alerts

The California Department of Financial Protection and Innovation (“DFPI”) recently released a statement to those applying for a debt collection license under the Debt Collection Licensing Act that application approvals will be delayed. The delay is due at least in part to the Federal Bureau of Investigation informing the DFPI that certain protocols need to be changed with respect to requesting federal background checks. The DFPI encourages those needing a debt collection license to apply through the Nationwide Multistate Licensing System. In a change to its enforcement policy, the DFPI...

On May 27, 2022, the California Consumer Protection Agency (“CCPA”) released a draft of proposed revisions to the California Consumer Privacy Act regulations. While the draft regulations are 66 pages long, the draft does not change the overall regulatory structure. The draft regulations create additional requirements and principles that a business must incorporate in obtaining consumer consent including (i) using a method that is easy to understand, (ii) creating symmetry in choice between more privacy protected and less privacy protected options, (iii) avoiding language or interactive...

In a recent blog post, the Consumer Financial Protection Bureau (“CFPB”) returned to the topic of Buy Now, Pay Later (“BNPL”) to encourage standardized credit reporting of BNPL lines. BNPL programs typically involve short-term, no-interest consumer credit offered at the point of sale, online and occasionally in brick-and-mortar stores. In December 2021, the CFPB announced an inquiry into BNPL, issuing orders to five major BNPL companies requesting information regarding the risks and benefits of their programs. See our ALERT of Dec. 17, 2021. The inquiry named the accumulation of debt as an...

The California Department of Financial Protection and Innovation (“DFPI”) released the final regulations implementing the Commercial Financing Disclosure Act. The regulations are a culmination of a long regulatory process. See our prior ALERTS dated Apr. 8, 2021, Oct. 14, 2021 and Nov. 16, 2021. These regulations set forth the precise formatting and calculation methods to make the required commercial disclosures. While similar to the most recent iteration of the regulations, the finalized regulations have been substantially revised from the initial proposed regulations.. Read More

On May 10, 2022, Connecticut joined several other states in enacting a consumer privacy law, the Connecticut Personal Data Privacy and Online Monitoring Act (“Act”). The Act creates rights for consumer’s to correct, access, delete and obtain personal data. The Act also gives consumers the right to opt-out of personal data processing related to (i) targeted advertising, (ii) certain sales of personal data or (iii) certain profiling. Furthermore, the Act requires controllers, defined as those who determine the purpose and means of processing personal data, to limit the collection of data to...

Within a month, Virginia and Utah both enacted legislation aimed at controlling merchant cash advance transactions through registration and disclosure requirements. The Virginia statute becomes effective July 1, 2022, with a registration deadline of November 1, 2022. The Utah statute becomes effective January 1, 2023. The Virginia Act adds a new chapter to the Financial Institutions title of the Virginia Code governing Sales-Based Financing Providers. See Va. Code Ann §§ 6.2-2228 et seq. “Sales-based financing” is defined as a transaction that is repaid by the recipient to the provider, over...

Digital currencies were once only accepted as payment by outlier businesses in the U.S. With the global rise in popularity of use of digital currency as payment for goods and services, common usage of digital currency for payments is becoming a reality. Uncertain economic times and global turmoil are moving businesses and consumers to use digital currency over fiat currencies because of its flexibility, security and resistance to inflation. Stripe, Inc. (“Stripe”), a global payment processing platform, is leading the way in integrating digital currency as a common form of payment. Stripe now...

On March 7, 2022, Opportunity Financial, LLC (“OppFi”) sued Clothilde Hewlett in her official capacity as Commissioner of the California Department of Financial Protection and Innovation (“DFPI”) seeking declaratory judgement and injunctive relief for threatened enforcement of California’s Fair Access to Credit Act (“AB 539”). Complaint, Opportunity Financial, LLC, v. Hewlett, No. 22STCV08163 (Cal. Super. Ct., March 7, 2022). AB 539 became effective on January 1, 2020, amending the California Financing Law (“CFL”) and imposing an interest rate cap of 36% for covered loans between $2,500 and...

Equifax, Experian and TransUnion have announced that they will change how they approach medical debt on consumer credit reports. Effective July 1, 2022, Equifax, Experian and TransUnion will no longer consider paid medical collection debt on consumer credit reports. These joint measures are expected to remove nearly 70% of medical debt in collections from consumer credit reports. New unpaid medical debts will not be added to consumer credit reports until a full year after being sent to collections. Reportedly, the three credit bureaus are planning to remove any unpaid medical debt of less...

In a recent complaint, the FTC alleged that Residual Pumpkin Entity, LLC, (formerly doing business as CafePress) and PlanetArt, LLC, failed to take proper security measures to protect consumer’s data. FTC Complaint, File No. 1923209, https://www.ftc.gov/system/files/ftc_gov/pdf/CafePressComplaint_0.pdf. TThe FTC alleged that Residual Pumpkin and PlanetArt stored social security numbers and security answers in clear readable text and created unnecessary risks to personal information by storing it indefinitely on its network without a business need. In February of 2019, hackers exploited...