b'2020 Highlights abusive and threatening debt collection practices. Numerous lawsuits have been filed as part of Significant Enforcement Actions Operation Corrupt Collector, including five cases filed DOJ Settles with Wells Fargo Over Unauthorizedsince September by the FTC alone. In addition to an Accounts enforcement crackdown, Operation Corrupt Collector The largest recovery by dollar amount in 2020 wasincludes extensive consumer outreach by the agencies.the $3 billion settlement reached between the DOJSignificant Regulatory Developmentsand Wells Fargo concerning Wells Fargos allegedCFPB Rescinds Mandatory Underwriting Provisions opening of millions of accounts for customers withoutof the Payday Lending Ruletheir consent between 2012 and 2016. This settlementIn July, the CFPB rescinded in their entirety several follows Wells Fargos 2018 settlement with attorneyskey provisions of the Director Cordray-era Payday general of all 50 states and the District of Columbia (forLending Rule, including a requirement that lenders $575 million), as well as its 2016 settlement with thedetermine a borrowers ability to repay before making CFPB, OCC, and Los Angeles City Attorney (for $185a covered loan, on the grounds that the Bureau had million) concerning the same alleged conduct, andre-evaluat[ed] the legal and evidentiary bases for appears to bring Wells Fargos legal liability concerningthese provisions and [found] them to be insufficient. this incident to a close.The Bureau also amended the rule to eliminate certain 34 States Secure $550 Million Settlement with Autodefinitions related to the underwriting provisions, Lender Santander such as identifying as an unfair and abusive practice In May, a group of state attorneys general reached a $550making covered loans without first determining a million settlement agreement with Santander Consumerborrowers ability to repay. USA Inc., resolving a five-year investigation into theCFPB Issues Final Rules Implementing the FDCPAcompanys auto lending practices. The states alleged thatIn October, the CFPB announced a final rule to Santanders credit scoring model predicted that certainimplement the Fair Debt Collection Practices Act segments of borrowers had a greater than 70% chance of(FDCPA), strengthening protections for consumers default, and yet Santander originated auto loans to thosewho communicate with debt collectors and clarifying borrowers, failed to ensure that auto dealers had verifiedthe application of the FDCPA to modern technologies, borrowers qualifying information, and lacked adequateincluding email and text messages. The new rule procedures to prevent false information from being usedincludes call frequency and opt-out requirements in the underwriting process. The Santander settlementthat limit debt collectors ability to contact consumers, represents the largest recovery at the state level in 2020.but offers some concessions to debt collectors, CFPB Enters into Consent Orders with Nine Separateincluding more lenient rules for certain limited content Lenders Following Sweep of Investigations into VAmessages. In December, the CFPB announced an Loan Advertising Practices additional rule to implement the FDCPA containing In 2020, the CFPB entered into nine consent orders withrequirements for debt collection disclosures. The rule different mortgage companies over allegedly deceptivecreates additional requirements around the content advertisements directed toward military servicemembersand presentation of such disclosures, including and veterans. Though the specific alleged conductrequirements for specific steps a debt collector must differed by entity, the CFPB alleged that the lenderstake to disclose the existence of a debt to consumers falsely represented an affiliation with the Veteransbefore reporting information about the debt to a Administration (VA), misrepresented the terms of creditconsumer reporting agency. related to VA-guaranteed mortgage loans, and failedOCC Finalizes True Lender Ruleto adequately disclose that they were a lender differentIn October, the OCC issued a final rule establishing from the borrowers current lender, which accordingthat a bank is the true lender of a loan entitled to to the CFPB rendered the advertisements misleading.preemption from state usury limits if, as of the date of In total, these actions resulted in the nine companiesorigination, the bank either is the named lender in the paying $4.4 million in civil money penalties.loan agreement or funds the loan. This bright-line rule Federal and State Regulators Attack Abusive Debtis intended to resolve true lender-related disputes by Collection Practices in Operation Corrupt Collector providing greater certainty to industry participants. In September, more than 50 federal and state lawIn January 2021, however, New York, California and enforcement entities, including the CFPB and FTC,several other states sued to block implementation of launched Operation Corrupt Collector, an initiative tothe true lender rule, arguing that the rule exceeds protect consumers from phantom debt collection andthe OCCs authority. This case, New York v. OCC, No. 8'