Consumer Crossroads: Where Financial Services and Litigation Intersect

On January 13th, the last day of the Illinois legislature's six-day lame duck session, the General Assembly passed the Illinois Predatory Loan Prevention Act (PLPA) as part of SB 1792.

An important resource for financial services compliance professionals just received a new update. The Third Edition of the 50 State Guide on Student Loan Servicing Regulations—a quick reference guide and resource for student loan servicers regarding the regulations specific to the industry, along with pending legislation, litigation, and court rulings—now also includes language of the rules implementing state student loan servicer laws.

The Illinois Supreme Court in Rosenbach v. Six Flags Entertainment Corporation, et al. just held that under the Illinois Biometric Information Privacy Act (BIPA) "an individual need not allege some actual injury or adverse effect, beyond violation of his or her rights under the Act, in order to qualify as an 'aggrieved' person and be entitled to seek liquidated damages and injunctive relief."

On November 20, 2018, the Illinois Supreme Court heard oral arguments regarding the Illinois Biometric Information Privacy Act (BIPA) in Rosenbach v. Six Flags Entertainment Corporation, et al. BIPA governs how entities may collect, use, and retain biometric data, such as fingerprints and retinal scans. Specifically, the Illinois Supreme Court will rule on whether a plaintiff is an "aggrieved party" to state a claim under BIPA without suffering any actual injury. If the Supreme Court rules the way that they indicated at oral argument, then BIPA will become a large consumer issue.

While Illinois mortgagees have the option of recouping delinquent mortgage loan debt through different types of lawsuits, the pursuit of this option can violate Illinois' prohibition on refiling the same cause of action. A recent decision illustrates the pitfalls of a mortgagee's numerous lawsuits filed on the same default and debt in reliance upon Illinois' savings statute.

Yesterday, the Illinois House of Representatives voted 98-16 to override Governor Bruce Rauner's veto of the Illinois Student Loan Bill of Rights. The IL student loan bill provides for the licensing of student loan servicers and imposes numerous, detailed requirements concerning the servicing of student loans. Among other things, the bill sets forth certain information that must be provided to borrowers, some of which must be provided through a trained repayment specialist. Non-exempt servicers have until December, 2018 to become compliant. Illinois is the 4th jurisdiction to create such a law, following Connecticut, California and the District of Columbia.

In a foreclosure action, the Illinois Appellate Court recently held that the foreclosing lender established its standing by attaching the blank-indorsed note to its complaint, but reversed judgment and remanded for the trial court to determine if a letter required by the Secretary of Housing and Urban Development ("HUD") regulations was actually dispatched.

Recently, an Illinois federal court denied and dismissed two plaintiffs' Fair Debt Collection Practices Act (FDCPA) claims after the plaintiffs failed to present evidence sufficient to establish materiality.

We return to the issue of retail debt collection with a case out of Illinois in which a federal judge has asked a jury to decide if a debt collection agency’s constant calling to a Banana Republic credit card holder violated the Fair Debt Collection Practices Act (FDCPA). The debt collector called the cardholder three to five times each day, with no two calls made less than two hours apart, for a total of eighty-seven calls between December 5 and December 23. On the 87th call, the cardholder answered and told the debt collector she could not pay the debt and to stop phoning her. Even though the debt collector did not call the cardholder again, the federal court refused summary judgment and decided a jury should review whether the volume and pattern of calling amounted to harassment under the FDCPA. We previously reported on a case out of California where a federal judge dismissed an FDCPA claim under the same circumstances and against the same debt collector.