Law and legal issues

The case involved a customer who was charged $100,000 in legal fees when he tried to pay off a commercial mortgage early. After the borrower waged a nearly decadelong legal fight, a Florida court ordered the bank to reimburse a portion of the fees.

The Consumer Financial Protection Bureau is challenging a recent appeals court decision that its funding through the Federal Reserve Board violates the separation of powers doctrine. That ruling "threatens to inflict immense legal and practical harms" on financial regulation, the CFPB says.

Legal experts are gaming out the various options for the CFPB after a three-judge panel of the U.S. Court of Appeals for the 5th Circuit ruled on Oct. 19 that the bureau's funding is unconstitutional.

An appeals court ruling last week found that the Consumer Financial Protection Bureau's funding structure violates the Constitution, but another court filing shows how the agency might fight back.

The class-action lawsuit was brought on behalf of mortgage borrowers who were allegedly placed into forbearance during the early days of the pandemic without their consent.

The state Supreme Court heard oral arguments in a lawsuit involving one of the nation's largest debt buyers. At issue is how much detail the industry must disclose about what consumers allegedly owe.

The company has filed a lawsuit against the banking commissioner for threatening to end its partnership with a bank that enables consumer loans to exceed the state’s 36% interest rate cap. OppFi’s argument: Its bank partner is the true lender.

The New Jersey-specific case could be a sign of how the combined effect of federal debt-collection rules and state regulations may further complicate a compliance-sensitive environment for the industry.

The ruling overturns a summary judgment in a class action lawsuit filed by refinance customers between 2004 and 2009 in West Virginia over alleged inflated property values.

The bureau said two rules related to communications with debtors will go into effect as originally planned on Nov. 30. The agency had previously proposed an extension to consider consumer advocates' concerns about the regulations.

DMB Financial, a debt-settlement firm near Boston that operates in 24 states, agreed to pay $5.4 million in restitution to consumers for allegedly charging upfront fees before providing any service, the CFPB said.

The Consumer Financial Protection Bureau disputes a district court ruling that misconduct claims against the company were already covered by a previous settlement.

Bankruptcy courts saw a greater-than-average number of filings in the first quarter, though a year-on-year decline highlights the impact of cheap cash flowing to troubled borrowers.

The delinquency rate on regional mall commercial mortgage-backed securities was 22.9% in February, the highest of any real estate category, according to Moody’s

The decision provides more clarity to noteholders in the state about when the six-year statute of limitations to bring a foreclosure action begins.

The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.

Cheap funding costs have extended a lifeline to many troubled companies, slowing the pace of U.S. bankruptcy filings, but shops, offices and hotels have been particularly vulnerable to the pandemic this month.

More may be on the horizon as lenders lose patience with defaulting property owners.

Some of the world’s biggest banks are urging a U.S. judge not to immediately terminate Libor after a group of borrowers filed suit claiming the benchmark was the work of a “price-fixing cartel.”

The CFPB issued two rulemakings in 2020 that the financial services industry and consumer advocates hoped would finally clarify key issues over how collectors contact debtors and deal with legacy debts. But both sides want the incoming Biden administration to make further changes.