Law Firm Owners May Be Liable For CFPB Violations

A federal district court in Wisconsin has held that the owners of two law firms may be held liable by the Consumer Financial Protection Bureau for alleged violations of the Consumer Financial Protection Act of 2010, as well as Regulation O, which governs mortgage assistance relief services. The CFPB brought the action against the two firms and four individual lawyers, based on the firms’ offering of debt relief services. They defendants are accused of misrepresenting their services and charging impermissible advance fees. The court said that the individual defendants could be held liable if the CFPB could demonstrate they participated in illegal practices, or knew or should have known about them, and – in a ruling that this post from Holland & Knight calls particularly significant – the court also said that the CFPB could seek disgorgment not just of profits, but of revenues, in this case more than $20 million.