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Page 2                                                               NDBA Legal Update • January 11, 2018

          directing these tribal entities to provide information to be   of debt that she owed. The borrower also sought rescission
          used by CFPB to determine whether they violated consumer   under the Truth in Lending Act (TILA). The district court
          financial laws. The tribes directed their tribal entities not   dismissed the TILA claim without prejudice and granted
          to respond and informed CFPB it lacked jurisdiction to   ReconTrust’s motion to dismiss the FDCPA claim.
          investigate lending entities created and operated by the tribes.
                                                                 On appeal, the borrower argued that ReconTrust was a debt
          CFPB rejected the tribes’ offer to cooperate as co-regulators   collector under the FDCPA because the notice of default and
          of consumer lending services. With that, the tribes petitioned   sale were attempts to collect debt. In a 2-1 decision, the Ninth
          CFPB to set aside the CIDs.  CFPB denied the petition and   Circuit affirmed the dismissal of the FDCPA claim, finding
          sought enforcement of the CIDs in federal court. The district   that ReconTrust’s activities were an “enforcement of a security
          court decided in favor of the CFPB, holding the Consumer   interest.”
          Financial Protection Act (CFPA) applies to the tribal lending
          entities.                                              In the petition for review by the U.S. Supreme Court,
                                                                 the borrower argued the case involved an important and
          The tribal entities argued the CFPA limits CFPB authority   recurring question on statutory construction, and one upon
          to “persons,” which excludes sovereign entities. Additionally,   which lower courts have been divided. ReconTrust argued the
          they asserted Congress did not intend for the definition of   petition should be denied because the case implicates a very
          “person” to encompass tribal entities because the act explicitly   narrow question that involves state law and which no other
          includes tribes in the definition of “state.”          court of appeals has addressed. ReconTrust also argued that,
                                                                 even if it fell within the FDCPA’s definition of debt collector,
          On appeal, a panel of the Ninth Circuit disagreed and
          affirmed the district court decision. The appeals court said the   its activities are excluded from liability under the FDCPA.
          CFPA definition of “state” to include Native American tribes
          falls “far short” of meaning CFPB does not have jurisdiction   Website Compliance with
          to issue CIDs to the tribal entities, or that Congress intended   ADA is a Continuing Issue
          to exclude tribes from the CFPA’s enforcement provisions. The
          Supreme Court’s refusal to review the case means the lower   Because the Justice Department continues to refuse to issue
          court ruling will govern the CFPB’s authority over tribes at   guidance about how banks and others can comply with ADA
          least within the Ninth Circuit. North Dakota is in the Eighth   requirements for equal access for the disabled, banks and other
          Circuit where the issue remains open.                  businesses continue to be at risk of being sued for alleged ADA
                                                                 violations.  And there is ongoing litigation on the topic, even
          Supreme Court Denies Review                            though one law firm appears to have agreed with ICBA not
                                                                 to sue community banks that are making good faith efforts
          of FDCPA for Trustees                                  to update websites and make them compliant with the most
                                                                 recent WCAG standards.
          The  U.S.  Supreme  Court is  also  refusing  to  hear  a  case
          in which the lower courts decided entities conducting   On the litigation front, ABA and thirteen business trade
          foreclosure-related activities, including notifying borrowers   groups have filed an amicus brief urging the Eleventh Circuit
          that their homes would be sold unless payment is made, are   Court  of Appeals to  dismiss  Haynes v. Outback Steakhouse
          not subject to Fair Debt Collection Practices Act (FDCPA)   of Florida, LLC, a lawsuit alleging Outback Steakhouse’s
          general restrictions on debt collectors. Specifically, the Court   website to be not fully accessible and in violation of the ADA.
          declined to review a decision that a trustee is not considered   The core issue in Haynes is whether a substantive business
          a debt collector under the FDCPA.                      remediation plan moots subsequent lawsuits from plaintiffs
                                                                 alleging identical claims under Title III of the ADA.
          The case is Ho, Vien-Phuong T v. ReconTrust Co, et al., Case
          No 17-278. The borrower purchased property with a loan   On September 13, 2016, Outback Steakhouse entered into
          from Countrywide Bank. After default, trustee, ReconTrust   a settlement agreement in New York federal district court
          Company (ReconTrust), started nonjudicial foreclosure   to bring its website into compliance with the Web Content
          proceedings against the borrower. ReconTrust recorded a   Accessibility Guidelines (WCAG). Subsequent to the New
          notice of default and mailed the notice to the borrower. The   York settlement, plaintiff Dennis Haynes filed a complaint
          borrower then sued ReconTrust, Countrywide and Bank of   in Florida federal district court, alleging Outback violated
          America (BofA), alleging ReconTrust violated the FDCPA   the ADA by failing to make its website compatible with
          when it sent her notices that misrepresented the amount   screen reading software utilized by the visually impaired.
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