June 25, 2022

Volume XII, Number 176

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CFPB and NY AG Sue Remittance Provider, citing “Repeat Offender”

On April 21, the CFPB and New York Attorney General’s Office filed a complaint against a remittance provider alleging that the provider (i) repeatedly gave senders inaccurate information about when their remittance transfers would be available to recipients abroad; (ii) repeatedly failed to provide the investigations, responses, or remedies required when consumers complained of remittance-transfer errors; and (iii) failed to comply with policy-and-procedure and document-retention requirements.  The complaint also alleges that the company engaged in unfair acts and practices by failing to timely make remittance transfers available to recipients or to timely make refunds available to senders. The complaint alleges that the these actions violated the Electronic Funds Transfer Act and its implementing Regulation E and the Remittance Rule and the Consumer Financial Protection Act, among various consumer financial protection laws.

Notably, the CFPB’s announcement refers to the provider as a “repeat offender” citing to a $125 million settlement with the FTC for the company’s failure to implement a comprehensive anti-fraud and agent-monitoring program under a previous consent order.  The CFPB also cites to previous agreement to forfeit $100 million and enter into a deferred prosecution agreement with the DOJ, admitting it “criminally aided and abetted wire fraud and failed to maintain an effective anti-money laundering program.”

Putting It Into Practice:  This the CFPB’s second such lawsuit this month holding repeat offenders accountable (we discussed the first lawsuit in a blog post here).  This latest lawsuit should alert companies that the CFPB is looking for noncompliance not only with its prior consent order, but also orders from other agencies.  Companies should also confirm and document their compliance with ongoing consent order stipulations.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 118
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About this Author

Moorari Shah Bankruptcy Lawyer Sheppard Mullin Law Firm
Partner

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

Areas of Practice

Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,...

213-617-4171
A.J. S. Dhaliwal Bankruptcy Attorney Sheppard Mullin Washington DC
Associate

A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office. 

A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.

With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving...

202-747-2323
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