New Day For RESPA: The UDAAPification Of Section 8

Law360
5 minute read | March.11.2015

The Real Estate Settlement Procedures Act has gone the "UDAAPified" way of debt collection — this time, through enforcement rather than guidance.

In July 2013, Consumer Financial Protection Bureau Bulletin 2013-07 announced that the principles underlying the Fair Debt Collection Practices Act broadly apply under Sections 1031 and 1036 of the Dodd-Frank Act, which prohibit unfair, deceptive, or abusive acts or practices (UDAAPs). The FDCPA prohibits a “debt collector” from engaging in any conduct, “the natural consequence of which is to harass, oppress or abuse any person in connection with the collection of debt,” to “use any false, deceptive or misleading representation or means in connection with the collection of any debt,” or to “use any unfair or unconscionable means to collect or attempt to collect any debt.”

The FDCPA generally applies to third-party debt collectors, including collection agencies, debt purchasers and attorneys who engage in debt collection. It does not apply to companies collecting on their own behalf. CFPB Bulletin 2013-07 acknowledges that the FDCPA “does not include some persons who collect consumer debt,” but warns that “all covered persons and service providers must refrain from committing UDAAPs” in the collection of debt.

On Feb. 10, 2015, the CFPB announced a consent order against NewDay Financial LLC, a mortgage lender offering mortgage loans guaranteed by the Veterans Benefits Administration. (In re NewDay Financial Inc., 2015-CFPB-0004 (Feb. 10, 2015)). The order is based on an allegedly deceptive advertising relationship with an unidentified third-party veterans’ organization.

Originally published in Law360; reprinted with permission.

Read the full article (subscription required)

Authors

Caroline Stapleton Partner, Financial & Fintech Advisory, Strategic Advisory & Government Enforcement (SAGE)

Washington, D.C.

See my bio

D:+1 202 461 2904
E: [email protected]

Practice:

Financial & Fintech Advisory
Strategic Advisory & Government Enforcement (SAGE)
Fintech

vCard

See full bio

Caroline Stapleton Partner

Washington, D.C.

Client-centered experiences are at the heart of Caroline’s practice. She has provided a wide variety of institutions, from fintech startups to multinational banks, with tailored, practical guidance that considers each company’s unique characteristics and strategic goals. Caroline draws on her prior experiences as an attorney at a federal prudential regulator and as the head of compliance at a consumer finance company to give clients a comprehensive picture of the legal risks and opportunities each new matter presents.

Her work on behalf of financial services providers has included:

Providing guidance regarding novel or complex regulatory questions, often in the context of developing new financial products and services
Performing compliance risk assessments of marketing, underwriting, pricing, origination, servicing and loss mitigation activities
Advising banks and supervised lenders with examinations by federal and state regulators, including responding to exam findings, CAMELS ratings, Matters Requiring Attention (MRA/MRIA) and enforcement referrals
Strategically responding to and defending enforcement actions by state and federal regulators, including the Consumer Financial Protection Bureau (CFPB), Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board and Department of Justice (DOJ), and, if necessary, negotiating favorable settlements
Developing strategies for bank partnership, state licensing and bank charter opportunities for consumer financial services providers
Conducting internal investigations of suspected misconduct or violations of an institution’s policies and/or regulatory requirements

In these and other representations, Caroline brings strong substantive knowledge of the key federal and state statutes and regulations governing the financial services industry. Her specific areas of focus include:

Fair lending and anti-discrimination laws, including the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA)
Prohibitions on unfair, deceptive or abusive acts or practices (UDAP and UDAAP)
Technical regulatory compliance under federal and state laws governing loan marketing, disclosures, settlement practices, servicing and collection practices, consumer reporting and electronic payments
Federal preemption, including under the National Bank Act
Compliance management best practices and regulatory expectations, including third-party vendor and merchant oversight
Treatment and disclosure of confidential supervisory information (CSI)
State lease-to-own laws and regulations

Prior to joining Orrick, Caroline was senior counsel at Buckley LLP. She also has served as an attorney-advisor in the litigation division of the OCC, where she represented the agency in civil litigation, bank receivership preparation, employment disputes and other administrative contexts. Caroline also gained valuable in-house experience as the head of compliance and assistant general counsel of a Richmond-based consumer finance company.