9th Circuit Defines Limits to FCBA Duties
The Ninth Circuit last week defined the limitations on a credit card issuer's duties to communicate with authorized card users regarding billing disputes. In Edwards v. Wells Fargo & Co., defendant Wells Fargo issued credit cards to Hamid and Saeid Maghamfar, two brothers, who were obligors on the account. The Maghamfars later added a third person, plaintiff Paul Edwards, as an authorized user of the account, and Wells Fargo issued a card to Edwards. Edwards had numerous disputes with vendors related to transactions on the card. Wells Fargo initially communicated with Edwards about the disputes, apparently believing he was an attorney for the Maghamfars. When Wells Fargo discovered that Edwards was not an attorney, just an authorized user, it stopped communicating with him, or responding to him, regarding the disputes.
Edwards sued Wells Fargo in district court in Nevada, alleging violations of the Fair Credit Billing Act ("FCBA"), part of the Truth in Lending Act, and violations of the Nevada Unfair Consumer Practices Act. The district court granted summary judgment for Wells Fargo. Plaintiff appealed.
Continue Reading...Senate Passes Financial Regulatory Bill
The U.S. Senate yesterday passed the financial regulatory bill, S.3217, the "Restoring American Financial Stability Act." The comprehensive bill includes broad new regulation of derivatives, executive compensation, systemic risk, investor rights, mortgages, credit-rating agencies, hedge funds and private equity, insurance, and consumer financial protection.
Significantly, this Senate version of financial regulation calls for a new, quasi-independent Bureau of Consumer Financial Protection within the Federal Reserve. The House version of financial regulation, passed in December, would create an independent, free-standing Consumer Financial Protection Agency. Both the House and Senate bills would limit federal preemption of consumer finance laws in certain ways. The Senate bill includes a detailed preemption provision.
New Duties for Furnishers Under Credit Reporting Rules
Pursuant to final agency rules implementing revisions to credit reporting regulations mandated by the Fair and Accurate Credit Transactions Act of 2003 ("FACTA"), significant changes to credit reporting rules will take effect on July 1, 2010.
Subject to several exceptions, the final new credit reporting rules for furnishers require furnishers to conduct a reasonable investigation into disputes related to credit reporting submitted to a furnisher directly by a consumer. The Fair Credit Reporting Act rules now in place require such an investigation only after a furnisher receives notice of dispute from a credit reporting agency. Significantly, if a furnisher provides a specific correspondence address for such disputes, the furnisher need only respond to disputes submitted to that address.
