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Moorari Shah

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Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm's Los Angeles and San Francisco offices.

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On June 16, the CFPB issued an interpretive rule reversing its prior determination that it lacked authority to examine institutions for compliance with the Military Lending Act (MLA).  In 2018, the CFPB discontinued checking for MLA compliance during supervisory examinations on the grounds that Congress had not authorized such examination authority under the Dodd-Frank Act.  As a result, the new interpretive rule sets forth the statutory basis to examine institutions that it supervises for MLA compliance as follows:…
Continue Reading CFPB to Resume Examinations Under the Military Lending Act

On June 10, the Federal Trade Commission (FTC) filed an amended complaint for civil money penalties and other relief under Section 5 of the FTC Act prohibiting “unfair or deceptive acts or practices” and Section 521 of the Gramm-Leach-Bliley Act (GLBA) prohibiting the use of fraudulent statements to obtain consumer information.  Setting aside the substance of the allegations, the amended complaint is informative because while the initial complaint sought consumer redress under Section 13(b) of the FTC Act, the Supreme Court’s recent unanimous decision in AMG Capital Management foreclosed this avenue to consumer redress for the FTC, and thus the amended complaint removes that reference while otherwise replicating the substantive allegations of the initial complaint.  Further, in a creative side-step to its Section 13(b) predicament, the FTC claims authority to obtain civil penalties under the GLBA because it empowers the FTC to enforce it “in the same manner and with the same power and authority as the [FTC] has under the Fair Debt Collection Practices Act [FDCPA].”  15 U.S.C. § 6822(a).  In 2010, the Dodd-Frank Act amended the FDCPA stating that violations may be enforced “in the same manner as if the violation had been a violation of a Federal Trade Commission trade regulation rule.”  15 U.S.C. § 1692l(a). …
Continue Reading FTC Takes Novel Approach to Seek Civil Money Penalties in the Wake of AMG Capital Ruling

The U.S. Court of Appeals for the Second Circuit recently held that a debt collector’s settlement offer must indicate whether interest and fees are continuing to accrue on the outstanding debt, or alternatively, whether payment of the settlement amount by a specified date will constitute full satisfaction of the debt.  The plaintiff allegedly incurred credit card debt that was placed with defendant debt collection company.  The defendant mailed plaintiff a collection notice offering to settle the debt.  The plaintiff sued the debt collection company by claiming that the notice violated Section 1692e of the Fair Debt Collection Practices Act (FDCPA) “by failing to disclose that interest was continuing to accrue on his balance.”…
Continue Reading Second Circuit Reverses Ruling in FDCPA Case

The House Select Subcommittee on the Coronavirus Crisis recently announced an investigation into the role of four Fintech companies and partner banks in issuing allegedly fraudulent Paycheck Protection Program (PPP) loans.  The Subcommittee’s press release references certain reports that the Fintech industry and its bank partners “have been linked to a disproportionate number of fraudulent PPP loans . . . raising questions about whether FinTechs and their bank partners have adequately screened PPP loan applications for fraud.”  This announcement builds on the Subcommittee’s March 25 findings that the Treasury Department and SBA failed to institute adequate safeguards to prevent waste, fraud, and abuse in pandemic relief programs, leading to nearly $84 billion in potentially fraudulent loans. …
Continue Reading House Subcommittee Launches Investigation into FinTech Companies’ Role in Allegedly Fraudulent PPP Loans