For more information, please visit www.lenderlawwatch.com or www.enforcementwatch.com 7 judgment against Allied Home Mortgage and its CEO, awarding the Government treble damages and statutory penalties. In December 2016, a jury found that the defendants violated the False Claims Act (FCA) and Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) in underwriting FHA-insured loans through shadow branches and by falsifying quality control reports. CFPB Settles with Private Equity Firm That Facilitated Private College’s Participation in Federal Loan Programs. In August, the CFPB filed a complaint and proposed settlement with Aequitas Capital Management, an Oregon private equity firm. The CFPB claimed that the firm purchased or funded some of Corinthian College’s private student loans to make it appear that Corinthian was eligible for federal student loan funds. Nearly 41,000 students are eligible for approximately $183.3 million in loan forgiveness and reduction under the settlement. American Express Pays $95 Million in Consumer Relief in Connection with Credit Card Discrimination Claims. In August, the CFPB entered into a consent order with two American Express subsidiaries. The CFPB alleged that the companies discriminated against consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. territories. Federal Trade Commission (FTC) and Illinois AG Settle With “Phantom” Debt Collectors for $47 Million. In November, the FTC and Illinois Attorney General reached a settlement with affiliated Chicago-based debt collectors that allegedly used false and misleading tactics to collect on payday or other small-dollar loans. The action was part of “Operation Collection Protection,” a joint federal-state enforcement effort targeted at deceptive and abusive collection practices. Virginia, Florida, and Georgia Attorneys General Obtain Over $80 Million in Settlements with Online Payday Lender Western Sky Financial and CashCall, Inc. Following several adverse rulings in various state courts against CashCall, Inc. and Western Sky Financial, LLC, the attorneys general for Florida, Virginia, and Georgia entered into consent orders with the online payday lender and their affiliated entities, resolving allegations that the companies used a “rent-a-tribe” scheme to skirt state Annual Percentage Rate (APR) interest caps and usury laws. All told, these settlements secured over $80 million in consumer relief. Appellate Highlights D.C. Circuit Issues En Banc Decision in PHH Corp. v. CFPB. In January, the U.S. Court of Appeals for the D.C. Circuit issued its long-awaited en banc decision, holding that the provision of the Dodd-Frank Act shielding the single director of the CFPB from removal without cause is constitutional. Although it remains unclear whether or not the separation of powers issue will be the subject of a petition for certiorari to the Supreme Court, the decision was a significant win for the industry because the court upheld the prior panel’s opinion and interpretation of Section 8 of the Real Estate Settlement Procedures Act (RESPA), including the panel’s interpretation of Section 8(c) as a “safe harbor” and the panel’s holding that the CFPB could not retroactively apply its interpretations of RESPA without violating due process. Courts Revise Spokeo’s Standing Analysis. Courts continue to wrestle with how to apply Spokeo’s two-part concreteness test for Article III statutory standing—“(1) whether the statutory provisions at issue were established to protect [the plaintiff’s] concrete interest (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged . . . actually harm, or present a material risk of harm to, such interests.” This has led to a blurred line demarcating whether an injury exists or not. LOOKING AHEAD TO 2018 While federal agencies are likely to remain at the forefront of enforcement activity, state actors are expected to continue the trend, first observed last year, of increasing their enforcement footprint. In late December, Democratic leaders in Congress took notice of this shift toward the increase in state enforcement actions by introducing a bill—the Accountability for Wall Street Executives Act of 2017—which, if passed, would further arm state actors by permitting state attorneys general to issue subpoenas and investigate and