Following closely on the heels of the CFPB’s recent action against pay day lender Cash America, the CFPB has taken action against medical credit card company, CareCredit. CareCredit, a subsidiary of GE Capital Retail Bank, offers medical credit cards through over 175,000 offices of health care providers such as dentists and vision care professionals. In a consent order issued on December 10th, the CFPB ordered CareCredit to refund up to $34.1 million to more than one million patients who were deceptively enrolled for the medical credit card. [Read more…] about CFPB Takes Action Against Deferred-Interest Medical Credit Card
Contract Interest Rate Only Through Confirmation
In First United Security Bank v. Garner, No. 11-10465 (11th Cir. Nov. 30, 2011) the court found that, under section 506(b), FUSB, an over-secured creditor, was entitled to receive post-petition interest at the contact rate of 10.5% until confirmation at which time the interest rate would drop to 4.25% as determined under the standard set forth in Till v. SCS Credit Corp., 541 U.S. 465 (2004). In so holding, the court relied on the Supreme Court’s statement in Rake v. Wade, 508 U.S. 464 (1993), that the temporal aspect of section 506(b) applies only from the date of filing to confirmation. The court additionally noted that the Second and Ninth Circuits have interpreted section 506(b) and the “cram-down” provision of section 1325(a)(5)(B)(ii) as allowing accrual of interest at the contract rate to continue only through confirmation.