Tag Archive | "compliance"

Hudson Cook, LLP Adds Former CFPB Enforcement Deputy as Partner


Hanover, Md. – Hudson Cook, LLP, a nationwide provider of legal compliance services for the financial services industry, announces the addition of Lucy Morris as a partner in its Washington, DC office. Lucy brings 25 years experience in all aspects of consumer finance law and public policy. Lucy will support the firm’s enforcement and compliance practices, and her experience will further enhance the firm’s ability to provide meaningful and practical advice to its clients.

“Lucy brings a wealth of experience with consumer financial services regulation, from both the CFPB and the FTC, and she will be a great addition to our practice,” explained Hudson Cook Chairman Tom Hudson.

From 2011 to 2014, Lucy served as Deputy Enforcement Director in the Division of Supervision, Enforcement, and Fair Lending at the Consumer Financial Protection Bureau. Lucy’s responsibilities at the CFPB included overseeing investigations and litigation relating to consumer financial products and services, including credit cards, mortgage origination, mortgage servicing, payday lending, debt collection, credit reporting, and debt settlement. From 2010 to 2011, Lucy served as a founding member of the implementation team that organized the CFPB after passage of the Dodd-Frank Act, helping to stand up the Bureau’s enforcement, supervision, and other functions.

Before joining the CFPB, Lucy worked at the Federal Trade Commission from 1989 to 2010. She served in a variety of positions in the FTC’s Bureau of Consumer Protection, including Assistant Director of Financial Practices and Assistant to the Director. Lucy worked in the Division of Financial Practices for 18 years, where she was responsible for protecting consumers of financial products and services through law enforcement, rulemaking, policy development and public outreach. During her tenure at the FTC, Lucy supervised, litigated, and investigated complex law enforcement actions involving a variety of consumer financial products and services, including mortgage origination, mortgage servicing, credit reporting, debt collection, and debt settlement. Lucy was awarded the Chairman’s Award in 2008, the FTC’s highest award, in recognition of her accomplishments.

Before joining the FTC, Lucy practiced law for three years as a litigation associate at Betts, Patterson & Mines in Seattle, Washington. Lucy received her Bachelor of Arts degree, cum laude, from the University of Santa Clara and a Juris Doctor degree from Hastings College of the Law. Lucy speaks frequently on topics relating to the CFPB, law enforcement, litigation, and consumer financial protection.

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Biweekly Loan Processor Deepens its Commitment to Compliance and the Customer


ORLANDO, Fla. – US Equity Advantage® (USEA), a leading provider of biweekly loan processing for the automotive industry, has added two new components to its broad scope of compliance practices. The code of ethics and certification test for dealership partners are designed to further enhance the consumers’ understanding of the costs and benefits associated with the company’s biweekly loan payment services.

The code of ethics is an agreement signed by dealership finance managers. It is intended to demonstrate the commitment of their F&I personnel to operating in the customers’ best interests by fully disclosing in a clear and simple manner the costs and benefits of USEA’s biweekly loan payment services.

The certification test is an online exam for F&I professionals at dealerships to test their knowledge of USEA’s biweekly payment plan costs and benefits. They must successfully complete the exam in order to offer USEA’s products to their customers.

“The code of ethics and certification test represent a continuing evolution of our best-in-class business practices,” said USEA CEO Robert Steenbergh who also serves as the company’s chief compliance officer. “With the recent regulatory attention given to biweekly payment products, it is more important than ever that we have practices in place that promote full and accurate disclosure of our products and puts the customers’ best interest first and foremost.”

“USEA is in lockstep with the National Automobile Dealers Association (NADA) which has advised its members to be aware of the specifics of the F&I products they sell and ensure their staff are properly trained to accurately disclose all fees and costs and not overstate any potential benefits,” Steenbergh added. “Our new compliance initiatives give USEA’s dealership partners the tools to do exactly that.”

USEA’s leadership-driven commitment to compliance also includes a fulltime compliance officer whose department is actively engaged in meeting all regulatory issues in the marketplace. These include adhering to state money transmission licensing in all 50 states, Bank Secrecy Act/Anti Money Laundering (BSA/AML) regulations, ACH network operating rules and guidelines, Electronic Funds Transfer Act (EFTA) requirements related to customers’ transactions, the Gramm Leach Bliley Act (GLBA) governing customer privacy and security, and Generally Accepted Accounting Principles (GAAP) including annual financial auditing.

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NYC Imposes Strict Rule for Used-Car Sales


NEW YORK — City officials are cracking down on the sale of used cars that have been recalled but not repaired. Now, dealers in the city that sold unrepaired recalled vehicles must notify the vehicles’ owners and perform the necessary repairs, The New York Times reports.

In July, city officials sent subpoenas to 200 dealerships requesting information on how many unrepaired recalled vehicles they had sold in the last year. The city’s Consumer Affairs Department said it was prepared to issue violations to dealers who did not follow up with customers who bought the vehicles, or even revoke their licenses to operate.

To read the full story, click here.

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Dealer Sentenced to 15 Years for Identity Theft


INDEPENDENCE, Mo. — The owner of Edge Auto Sales, an auto dealership with locations in Blue Springs and Independence, was sentenced to 15 years in prison for multiple felony convictions related to an extensive identify theft scheme he ran out of his dealerships.

Morrow acquired personal identifying information about his victims through their applications for auto financing, according to Attorney General Chris Koster and Jackson County Prosecuting Attorney Jean Peters Baker. Morrow used the victims’ information to forge dozens of fraudulent auto loans for car sales that never occurred. He then sold those fraudulent loans to automotive finance companies, who bought the rights to collect on the loans for a lump sum payment to Morrow.

The Missouri Attorney General began investigating Morrow in 2012 after receiving a tip from a consumer who discovered a fake car loan on her credit report.

In addition to Edge Auto, the attorney general’s office discovered that Morrow fabricated the existence of a dealership in Kansas City, forging documents so that it appeared to be owned and operated by one of his Edge Auto victims. Morrow also created fake loans through this fictitious dealership.

In 2012, Morrow created another dealership, Silver Star Motors, in Illinois. Through this new dealership, Morrow reused identities of his Jackson County victims in addition to selecting new victims in Illinois to continue his scam. An Illinois consumer checking his credit report also discovered a fraudulent car loan and alerted authorities there.

In April, Morrow pleaded guilty to nine felony counts of forgery, nine felony counts of deceptive business practices and two felony counts of identity theft. On Thursday, the judge sentenced him to 15 years on each of the two identity theft counts, seven years on each of the nine forgery counts, and four years on each of the counts for deceptive business practices. The sentences were ordered to run concurrently and Morrow was credit with approximately a year for time served. The Missouri Attorney General’s Office assisted Jackson County Prosecuting Attorney Jean Peters Baker in the prosecution.

Koster said that his office identified at least 44 Missouri victims and approximately $1.125 million of fraudulent loans, which Morrow sold to four automotive finance companies for approximately $478,000 in cash.

“Terry Morrow perpetrated the most extensive identity theft scheme ever prosecuted in Missouri and the sentence handed down today reflects the severity of his crimes,” Koster said. “His scheme was discovered because consumers checked their credit reports and found loans they had not taken out. Without that consumer vigilance there is no telling how many more victims there might have been.”

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Kan. Dealer Ordered to Pay Customer $2,065


LAWRENCE, Kan. — A Douglas County auto dealer has been ordered by Attorney General Derek Schmidt’s Office to repay a consumer more than $2,000 after violating the Kansas Consumer Protection Act.

South Auto Sales, Eudora, and its owner, Salah Ibrahim, were ordered last week in a consent judgment to reverse an automobile transaction and repay a consumer $2,065. In addition, the company was ordered to repay the attorney general’s office for the costs of the investigation and refrain from further violations of the Consumer Protection Act.

An investigation by the attorney general’s Consumer Protection Division found that the auto dealer required consumers purchasing an automobile on credit to sign a preprinted repossession waiver form that violated the consumers’ rights under the Kansas Uniform Consumer Credit Code and the Kansas Consumer Protection Act.

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RouteOne to Cover Regulator Scrutiny of F&I Products in Upcoming Webinar


FARMINGTON HILLS, Mich. — RouteOne LLC will discuss the forthcoming scrutiny of F&I products by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) during a complimentary webinar on July 23 at 12 p.m. ET.

During the webinar, entitled “CFPB and FTC Update: All About Add-Ons,” RouteOne Staff Attorney Joseph Karam and National Business Development Manager Jesse Pappas will discuss the cost of compliance, provide a brief introduction to the CFPB and FTC, and look closely into the forthcoming scrutiny of F&I products. Dealers may register for the free webinar by clicking here.

“As the regulatory environment grows increasingly complex, dealerships are contributing a significant amount of time, resources and money in the effort to stay compliant,” said Mike Jurecki, RouteOne CEO. “With separate federal agencies now dedicated to consumer finance and consumer protection, we encourage our dealer customers to take advantage of this opportunity to educate and prepare themselves for the future regulatory environment.”

Karam and Pappas will offer a Q&A session following the presentation. The webinar will be recorded and available for review after the live session on July 23.

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