All Categories

    Last Week... Today! Instagram Used in Bank Fraud | Five Guys - FCRA Class Action | CFPB Director Threatened with Contempt Charges |

    Last Week... Today! Instagram Used in Bank Fraud | Five Guys - FCRA Class Action | CFPB Director Threatened with Contempt Charges |

    The House just passed the biggest bank deregulation bill in a generation, Vox

    On Thursday, Capitol Hill was consumed by former FBI Director James Comey’s testimony. But just after the high-profile hearing played out in the Hart Senate Office Building, House Republicans passed a mammoth, 580-page bill that would do more to deregulate the banking industry than any single piece of legislation in a generation.


    The Financial Choice Act, approved in the House by a 233 to 186 margin, now heads to the Senate. Every House Democrat voted against it, and they were joined by just one Republican defector, Rep. Walter Jones (R-NC).

    "The Wrong Choice Act is a deeply misguided measure that would bring harm to consumers, investors and our whole economy," said Rep. Maxine Waters (D-CA), the highest ranking Democrat on the financial services committee, in a statement. "The bill is rotten to the core and incredibly divisive."

    Because the Choice Act has unified Democrats in opposition, it has very little chance of crossing the 60-vote threshold it would need to pass the Senate without a filibuster. But some of its key measures — including defunding several key banking regulatory agencies — could be advanced through budget reconciliation, and would thus only require 51 votes.

    “I think this has a very good chance of passing. There are a lot of Democrats who are going to be supporting this,” Sen. Jim Inhofe (R-OK) said in an interview this May. “Even Democrats have bankers in their districts.” Read More

    CFPB Announces Major Change to Debt Collection Rulemaking, AccountsRecovery.Net

    The Consumer Financial Protection Bureau has announced plans to address the verification component of the proposal it issued last year in a rule that will cover both first-party and third-party collections at the same time, changing course from a previously announced plan to cover first-party creditors separately from third-party collectors. The CFPB will continue to move forward with other parts of the proposal issued last year that will cover third-party collectors, specifically.

    Richard Cordray, the director of the CFPB, made the announcement at the agency’s Consumer Advisory Board meeting this morning in Washington, D.C.

    “As we evaluated the feedback we received on the proposals under consideration, one thing became clear,” Cordray said. “Writing rules to make sure debt collectors have the right information about their debts is best handled by considering solutions from first-party creditors and third-party collectors at the same time. First-party creditors like banks and other lenders create the information about the debt and they may use it to collect the debt themselves or they may provide it to companies that collect the debt on their behalf or buy the debt outright. Either way, those actually collecting on the debts need to have the correct and accurate information. All of the parties must work together to ensure they are collecting the right amount of debt from the right consumer.”

    The CFPB will continue to move forward with other aspects of the proposed rule, Cordray said, mainly covering disclosures that will have to be made by third-party collectors to individuals when collecting debts. Read More

    Burger Chain Faces FCRA Class Action Lawsuit Over Background Checks, ESR

    A potential class action lawsuit brought by a former employee against Five Guys claims the popular burger chain violated the federal Fair Credit Reporting Act (FCRA) and California labor law by conducting background checks on employees without properly notifying them, according to a report from reports that the plaintiff, Jeremy R. Lusk, claims Five Guys “regularly secured credit and background reports on employees, conducted background checks on potential, current, and former employees, and used this information to make hiring decisions without providing clear disclosures.” 

    Lusk claims that Five Guys violated the FCRA – which promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies – and California’s Consumer Credit Reporting Agencies Act (CCRAA) and Investigative Consumer Reporting Agencies Act (ICRAA). reports that Lusk seeks to represent several classes, including an FCRA class of all current, former and prospective employees in the United States over the last five years and ICRAA and CCRAA classes of California workers and applicants within the last five and seven years, respectively.

    The case is Jeremy R. Lusk v. Five Guys Enterprises LLC et al., case number 1:17-cv-00762, in the U.S. District Court for the Eastern District of California, Fresno Division. Read More

    Bill would let banks freeze accounts to stymie elder scams, Washington Times

    By the time Roseann Keiles realized a scam artist had his hooks in her mother, the damage was done. The 82-year-old Long Island woman, who had Alzheimer’s disease, had mailed away thousands of dollars in little envelopes to a man calling himself “Mr. Cashman” who phoned every day asking for money.

    “My mother and I were banking at same branch of Chase. I went in one day and the bank manager pulled me aside and said, ‘I just want you to be aware your mother has been coming in every three days taking out $300 in cash,’” Keiles said.

    A bill now under consideration in the New York Legislature would give banks the ability to temporarily freeze the accounts of older adults when they notice activity uncharacteristic of spending habits.

    Many New York banks already have standards and training for employees to spot financial exploitation, but in the past, reporting of suspicious activity was “chilled by the absence of guidelines and sufficiently unambiguous protections for banks and their employees who might have suspected abuse but were deterred by the lack of unambiguous appropriate protection from liability,” said Roberta Kotkin, New York Bankers Association general counsel and chief operating officer.

    The measure was unanimously approved by the Senate in March but has faced resistance in the Democratic-led Assembly and hasn’t been scheduled for a vote. Read More

    CFPB's Cordray Threatened with Contempt Charges by Health Panels, American Banker

    The House Financial Services Committee is threatening to file contempt charges against Consumer Financial Protection Bureau Director Richard Cordray for allegedly lying about the bureau's investigation into the Wells Fargo scandal.

    In a 15-page report released Tuesday by Republican staff, the committee claimed that the CFPB has not produced records showing that it conducted a full investigation of Wells’ branch sales practices or that it was aware of problems with phony accounts before the L.A. city attorney took action against the bank.

    The report appears aimed at proving that Cordray lied to Congress in April when he testified that the CFPB had conducted an "independent and comprehensive" investigation and that the agency was already tracking Wells' sales practices.

    "No records or other information before the committee corroborate this claim," the report stated.

    Lying to Congress could be used as a basis for President Trump to fire Cordray "for cause," the legal standard in the Dodd-Frank Act. (A court case challenging that standard, which could allow the president to dismiss a CFPB director at will, is under appeal.)

    The CFPB said it was "reviewing the report."

    "As we have previously stated, the CFPB learned from whistleblowers about potential problems at Wells Fargo in mid-2013, just two years after opening our doors," a spokesman said in a statement to American Banker. "Director Cordray has provided a public account of the timeline on which our investigation unfolded, and our order publicly details our findings against Wells Fargo.” Read More

    Trio allegedly used Instagram in old-timey bank fraud, CNet

    Three Philadelphia men have been charged after using the social media site to allegedly find accomplices and defraud banks to the tune of $50,000.

    It might be new technology, but social networks can be used to abet some of the oldest crimes.

    Three men have been arrested in a sting operation for allegedly committing bank fraud using Instagram, Pennsylvania Attorney General Josh Shapiro said Tuesday.

    Shakour S. Smith, 26, Ikeem M. Starks, 25, and Quadir J. Burley, 18, all from Philadelphia, created Instagram accounts with bank logos and asked people to contact them. They then allegedly convinced respondents to participate in a scheme that led to the theft of more than $50,000 from banks and credit unions.

    Investigators became aware of the activities in February and used undercover officers to contact them. During the meetings, the men allegedly explained their scheme, asked the officers to participate and later were caught making fraudulent withdrawals from a bank account created by the investigators. Read More

    Experian, TD Bank Depart Atty's FCRA War, Law360

     Experian and TD Bank have exited a California federal suit alleging they violated the Fair Credit Reporting Act by reporting outstanding account balances after a debtor declared bankruptcy, ending just one of more than 100 similar cases filed by a bankruptcy attorney. 
    U.S. District Judge Beth Labson Freeman signed off Thursday on Experian Information Solutions Inc.’s dismissal from the suit, almost two weeks after she revealed in an order that Experian and plaintiff Arthur Harris reached an undisclosed settlement to end his FCRA allegations. TD Bank USA NA had been dismissed from the suit in May.

    Since April 2016, attorney Elliot Gale has filed numerous lawsuits accusing multiple financial industry players of failing to conduct a reasonable investigation into allegedly misleading credit reports that misreported outstanding debt after the individuals filed for Chapter 13 or Chapter 7 bankruptcy. Gale has practiced as an associate attorney at the Santa Clara-based Sagaria Law, which specializes in bankruptcy.

    The attorney argued that creditors are “making matters worse” for consumers who file for bankruptcy by either failing to report debt payments or misreporting balances. This in turn causes those consumers to never obtain credit scores higher than what they had before they declared bankruptcy, even if they continue to pay off their debt, he argued.

    But Judge Freeman in mid-April dismissed the suit against TD Bank and Experian, saying Harris failed to allege that the credit reports contained actual inaccuracies under the FCRA. Harris cited no authority that suggests his Chapter 13 erased his past debts for the purpose of his FCRA claims, she ruled.

    Judge Freeman did, however, allow Harris to amend his pleadings that she said are primarily made up of “copy-and-paste boilerplate allegations,” saying it may be possible for Harris to allege that reports of his prebankruptcy debt could be misleading without any reference to the Chapter 13 case.

    The judge at one point threatened to sanction Gale if he continued to file amended complaints with “bare-boned” pleadings. Read More

    Customer Outreach: Shred Drive

    Your Financial Institution can reach out to your accountholders or members by working with a shredding service (or using inhouse technology, if available) to provide free shredding to help your customers prevent identity theft. 

    One of the most efficient and quickets ways to prevent identity theft is  easy: Simply shred documents that contain personal information, such as bank statements, bills, and credit card offers.

    Your institution can schedule a two or three hour shredding event at one of your branches. Limit the number of documents each customer brings to two or three boxes or large shopping bags. 

    Make sure you advertise that the documents will be shredded to a fine confetti and recycled, thus protecting our environment by keeping tons of material out of landfills.