b'CREDIT CARDS that banned a purportedly unlicensed finance companyLOOKING AHEAD TO 2020(Equitable Acceptance Corporation) from collecting onWith several high-profile successes in 2019, state and any active student loan debt relief accounts in Massa- federal regulators are likely to continue to pursue chusetts.The settlement also required the company tolarge settlements against for-profit schools and the pay $340,000 to repair the credit of approximately 600 borrowers affected within the state, as well as $100,000lenders that service them. Generally, as student-loanAuto Lending TELEPHONE CONSUMER debt burdens continue to rise, the concept of securingAUTO LOANSCONSUMER FINANCIAL &PROTECTION ACTPROTECTION BUREAUin restitution to the Commonwealth.According to thestudent loan debt forgiveness and punishing purported complaint, the financing company violated the Massa- bad actors in the space will continue to be politicallyConsistent with Goodwins 2018 Year in Review prediction, 2019 saw a continued decline in federal chusetts Consumer Protection Act by providing high-in- popular for those at all points on the political spectrum. terest loans to student borrowers and charging exces- enforcement actions and additional federal deregulation in the auto lending space. In 2019, Goodwin sive fees for documentation preparation services thatAs a result, similar multi-state enforcement actions (withtracked 11 auto lending enforcement actions. Although the total number of actions largely mirrored 2018, merely involved the preparation and submittal of formsor without the participation of the FTC and CFPB) are9 of the 11 actions were brought by state attorneys general. This number is in line with the overall decline for the borrowers.The company also purportedly vio- likely to continue, as will federal enforcement of studentin the number of auto lending enforcement actions Goodwin has tracked since 2016.lated the Massachusetts Truth in Lending Act by misrep- lending guidelines. MORTGAGESTUDENT LENDING resenting its loans as revolving credit plans when theyThe CFPBs return to student-lending issues is alsoDEBT COLLECTION were actually closed-end loans, and failing to disclosenoteworthy and is worth monitoring in 2020. AfterKEY TRENDS 2019 HIGHLIGHTSthe true cost and terms of these loans.These actionsceding this area to the FTC in 2018, it appears likelyWhile the CFPB was responsible for the bulk of autoCFPB Surprises with Abusiveness Claim. Despite were the latest in a series of student lending and debtthat there will now be two large federal agencieslending enforcement actions in previous years, 2019its retreat from auto lending enforcement in 2019, the relief enforcement actions taken by the Massachu- targeting student loan debt relief providers bothsaw state attorneys general and the DOJ spearheadingCFPB was not shy in finding auto lenders sale of GAP settss AGs office over the past several years. through the use of UDAP and UDAAP provisions in theenforcement activity. The CFPBs step back from autoproducts an abusive practice. Following the resignation FTC Act and the CFPA, and the TSR. lending enforcement actions was expected in the wakeof the CFPBs Director Richard Cordray, we expected of Congress 2018 repeal of informal CFPB guidancea decline in the CFPBs use of abusiveness authority FEDERAL COURTS OFDATA SECURITY PAYDAY LENDING APPEALSand changes to the CFPBs Office of Fair Lending.in enforcement actions. Yet in its Summer 2019 Unlike in years past, state attorneys general wereSupervisory Highlights, CFPB examiners observed WHAT TO WATCH the primary enforcers in the auto industry in 2019.several instances in which lenders sold GAP products Attorneys general from Massachusetts, California,to consumers with low loan-to-value ratios whom Continued state and federal focus on student lending and for-profit universities lenders knew would not benefit from GAP products. Continued use of the TSR in targeting student lenders and debt relief providers Maryland, Delaware, New York, and New JerseyThe CFPB believed this conduct violated the CFPA initiated or resolved enforcement actions this year,and constituted an abusive practice under its UDAAP often invoking state consumer protection statutes,provisions because lenders took unreasonable including state UDAAP provisions. Generally, theadvantage of consumers lack of understanding of the state actions resulted in relatively limited recoveries,material risks, costs, or conditions of GAP products. but Massachusetts stood out by obtaining over $6 million in compensation for consumers and penalties.DOJ Enforcement Under the ECOA. While a decrease We expect the states to remain active in this spacein federal enforcement actions was expected in in the coming years, particularly Massachusetts andthe auto industry, DOJs use of the ECOA against a California, whose attorneys general and enforcementMaryland-based car dealership indicates that federal agencies have publicly indicated that auto lending andagencies may yet play a continued role in this space auto repossession are current areas of focus.by using different enforcement tools. In September, the At the federal level the DOJ continued to play a roleDOJ announced that it filed a lawsuit in the U.S. District in auto lending enforcement and brought the onlyCourt for the District of Maryland against a Maryland two federal actions we tracked this year. In past yearsused car dealership (Guaranteed Auto Sales), and its federal agencies (particularly DOJ) primarily relied onowner and manager, for allegedly violating the ECOA. the SCRA when bringing enforcement actions. We sawThe complaints allegations were based on testing five SCRA actions in both 2016 and 2017, and three inconducted by the DOJs Fair Housing Testing Program, 2018. This year, however, there was only one SCRAin which individuals posed as prospective car buyers action.to gather information about possible discriminatory 28 29'