• Court Allows CFPB to Revive Abusive Practice Claims Against Attorney
  • February 5, 2018 | Author: Robert A. Gaumont
  • Law Firm: Gordon Feinblatt LLC - Baltimore Office
  • As reported in our October 2017 Maryland Legal Alert, we are continuing to monitor one of the few federal cases where a court has applied the “practice of law” exclusion to the jurisdiction of the Consumer Financial Protection Bureau (CFPB) in an abusive practices claim against an attorney. The United States District Court for the District of Maryland had previously dismissed the claims against an independent professional advisor (IPA) who was an attorney and who had provided at least some legal advice to consumers that were considering a structured settlement factoring arrangement. In response to the CFPB’s motion for leave to file an amended complaint, the court issued an opinion on December 13, 2017 granting the CFPB leave to amend. Specifically, the amended complaint alleged that consumers were actually unaware that the IPA was an attorney. The court then held that “[i]t is logically impossible for a ‘client’ to form an attorney-client relationship with someone she does not know is an ‘attorney.’” Therefore, if the allegations in the amended complaint are accepted as true, the IPA and the consumers “did not form an attorney-client relationship, which means [the IPA’s] alleged conduct falls within the [Dodd-Frank Act’s] exception to the ‘practice of law exclusion.’” The court therefore allowed the amended complaint to be filed, reviving abusive practice claims under the Dodd-Frank Act against the IPA. On December 27, 2017, the IPA filed a motion to dismiss or, in the alternative, motion for summary judgment, which included an affidavit from the IPA asserting that he told consumers that he was a Maryland attorney in his IPA consultations with consumers. We will continue to monitor this important case.