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ARTICLE · 09 MARCH 2015

Cases We’re Watching: CFPB v. Morgan Drexen

Morrison Foerster
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We don’t know about you, but we’ve been following the contentious litigation between the CFPB and debt-relief services company Morgan Drexen pretty closely.

United StatesLitigation, Mediation & Arbitration
Joanna Zdanys
Joanna Zdanys
Rebekah Kaufman
Rebekah Kaufman
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We don't know about you, but we've been following the contentious litigation between the Consumer Financial Protection Bureau (CFPB) and debt-relief services company Morgan Drexen pretty closely. The CFPB filed its lawsuit in August 2013, alleging, among other things, that the company deceived consumers into paying unlawful up-front fees for debt relief services by disguising them as fees related to "sham" bankruptcy services. The CFPB claimed that the defendant's practices violated the Telemarketing Sales Rule (TSR), 16 C.F.R. § 310, and the Consumer Financial Protection Act (CFPA).

The action offered its share of drama even during motion practice, when the defendant was one of those that took up the sword against the Bureau on constitutionality grounds. It lost that motion last month but managed first to get the Court to hold that CFPB officials could be subjected to depositions. Trial was set to begin on February 10, 2015, but instead the court held an

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