FTC Holder Rule --16 C.F.R. § 433.2(a)

The California Supreme Court denied review and declined to depublish the Court of Appeal's decision in Spikener.  https://appellatecases.courtinfo.ca.gov/search/case/dockets.cfm?dist=0&doc_id=2322739&doc_no=S263361&request_token=NiIwLSEmXkg%2FWyBdSCJNSElIIDg0UDxTJSIuSzxTICAgCg%3D%3D Spikener held that the FTC Holder Rule pre-empted Civil Code section 1459.5, which legislatively sought to overrule the Lafferty decision's finding that the FTC Holder Rule capped attorneys' fees recoverable under the Rule.  https://www.severson.com/consumer-finance/court-of-appeal-cal-says-legislative-effort-to-overrule-laffertys-cap-on-attorneys-fees-under-the-ftc-holder-rule-is-preempted/ Read More

In Heinz v. Driven Auto Sales, No. ED107617, 2020 Mo. App. LEXIS 782 (Ct. App. June 16, 2020), the Missouri Court of Appeals found that a credit union was responsible for the dealer’s conduct under the FTC Holder Rule, despite an argument that the credit union could not be directly liable under the Missouri statute sued upon. In many respects,… Read More

In Spikener v. Ally Financial, Inc. , the Court of Appeal deferred to the FTC's 2019 interpretation of the FTC Holder Rule, holding that the Holder Rule limits recovery, including attorneys' fees, against the holder to the amount that the debtor paid under the assigned contract.  Civil Code 1459.5, which was enacted post-Lafferty to allow a debtor to recover uncapped attorneys'… Read More

In Hernandez v. Apple Auto Wholesalers of Waterbury Llc, No. 3:17-cv-1857 (VAB), 2020 U.S. Dist. LEXIS 86672 (D. Conn. May 18, 2020), Judge Bolden certified an FTC Holder Rule question to the Connecticut Supreme Court. The FTC Holder Rule language "preserves a consumer's right to assert the same legal claims and defenses against the assignee of a credit contract as… Read More

A Superior Court judge ruled on the applicability of Civil Code 1459.5 to an attorney fee motion brought against a Holder.  The Superior Court held: The Court is unwilling to apply pending Civil Code 1459.5.  It does not take effect until January 1, 2020 and is pre-empted by the Federal Trade Commission's May 2, 2019 ruling on the issue of… Read More

In Timmons v. SunTrust Bank, No. A19A1262, 2019 Ga. App. LEXIS 547, at *1-6 (Ct. App. Oct. 9, 2019), the Georgia Court of Appeals held that an auto finance lender was not a holder-in-due-course, but instead was subject to the FTC Holder Rule contained in the RISC. [O]n July 9, 2015, the Plaintiffs purchased a 2015 GMC Sierra from the… Read More

A copy of the Firm’s bulletin on AB 1821, the Lafferty decision, and the FTC Holder Rule can be found here: https://www.severson.com/emailer/financial/080219/ For information, please contact the authors Mark Lonergan at mdl@severson.com or Kerry Franich at kwf@severson.com Read More

On July 12, the Governor chartered AB 1821, which seeks to overturn Lafferty’s cap on the Holder Rule.  AB 1821 adds Civil Code 1459.5 to the Civil Code, which now states A plaintiff who prevails on a cause of action against a defendant named pursuant to Title 16, Part 433 of the Code of Federal Regulations or any successor thereto, or… Read More

A copy of the Article is here. Hyman, S.J., and Mohseni, T., California Court of Appeal Finds that the FTC Holder Rule Limits a Holder's Liability for a Consumer's Attorneys Fees, 72 Conf. on Cons. Fin. L. Q. 432 (Spring 2019). Read More

As FY 2015 came to a close, the FTC asked for commentary on its Holder Rule for assignee liability.  Consumers and Industry responded in early 2016.  Three years in the making, the FTC finally responded, issuing its commentary today in the Federal Register, and it's first official commentary since the Rule was promulgated in 1975.  FTC Commentary on Holder Rule 5-2-19. … Read More