Compliance Check for Financial Institutions: Is Your Website ‘Accessible' to those with Disabilities?June 10, 2019 | Megan Stumph-Turner
What do Amazon, Domino’s, and Beyoncé have in common? Their websites have all have been the subject of high profile lawsuits alleging failure to comply with the Americans with Disabilities Act of 1990 (the “ADA”). Your financial institution could be, too, if it has not taken measures to ensure its website is ADA compliant.
We most often associate the ADA with physical limitations of brick and mortar buildings. But in recent years, several courts have extended the protections of the ADA to customers using websites in times where we conduct most of our business online. The relevant portion of the ADA provides that “No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to) or operates a place of public accommodation.” 42 U.S.C. §12182(a). Even though the ADA has not been amended to specifically address websites, several courts have held that the ADA applies to website accessibility, whether by nexus to a physical location or by the website’s public nature.
There is currently a split among the circuits as to whether or not a website falls under the scope of the ADA, but recent cases show a tilt in favor of holding that websites are either places of public accommodation in their own right, or have a sufficient nexus to services provided out of a brick and mortar location to fall under the ADA. In one of the more recent cases, the Ninth Circuit Court of Appeals held that an ADA lawsuit could proceed against Domino’s for alleged failure to comply with appropriate accessibility standards for its website. The Court reasoned, “The statute applies to the services of a place of public accommodation, not services in a place of public accommodation. To limit the ADA to discrimination in the provision of services occurring on the premises of a public accommodation would contradict the plain language of the statute.” Domino’s had not established that compliance would be an undue burden or would materially alter its business, such that the ADA claim was permissible.
While ADA website litigation is not altogether new, it has gained traction in the past couple of years. Financial Services Litigators are closely monitoring these cases across the country and expect these filings against banks and credit unions to increase, due to increasing popularity of, and reliance upon, online banking by customers. Financial institutions are encouraged to ensure their websites comply with the current industry standard for accessibility, as well as state-level requirements. In evaluating its website, a financial institution should ask these questions:
- Is the website “perceivable”? Does it:
- Provide text alternatives for non-text content
- Provide captions and other alternatives for multimedia
- Create content that can be presented in different ways
- including by assistive technologies, without losing meaning
- Make it easier for users to see and hear content
- Is the website “operable”? Does it:
- Make all functionality available from a keyboard
- Give users enough time to read and use content
- Avoid content that causes seizures
- Help users navigate and find content
- Is the website “Understandable”? Does it:
- Make text readable and understandable
- Make content appear and operate in predictable ways
- Help users avoid and correct mistakes
- Is the website “Robust”? Does it:
- Maximize compatibility with current and future user tools.
The Eighth and Tenth Circuits have not yet issued rulings applicable to this topic. We will continue to monitor for new cases and provide updates.
Earlier this month, the CFPB took one of its first substantial steps under new leadership, with a Notice of Proposed Rulemaking seeking to rescind the underwriting requirements of the Bureau’s 2017 Final Rule regarding payday loans, vehicle title loans, and high-cost installment loans (the “2017 Payday Loan Rule”). Signed by new director Kathy Kraninger and published on February 6, this proposal is open for comment through May 7, 2019.
This recent proposal seeks to eliminate the “identification” provision in the 2017 Payday Loan Rule that makes it an unfair and abusive practice for lenders to make these types of loans without making a reasonable determination that the customer will have the ability to repay those loans. The new proposed rule also seeks to remove the “prevention” provision, which set forth certain underwriting guidelines that lenders were going to be required to use in an effort to prevent loans from issuing to borrowers not reasonably likely to be able to repay. Also subject to elimination were new recordkeeping and reporting requirements promulgated by the 2017 Rule. Director Kraninger’s new proposal did not seek to remove any of the new payment policies put into effect by the 2017 Rule.
In its Notice, the CFPB reasoned that there was not sufficient evidence to support the 2017 Rule, particularly where the 2017 Rule would prevent many consumers from accessing credit when needed. The CFPB also noted that most states have some degree of regulation in place as to payday loans, with varying levels of oversight and intricacy. To impose an additional federal, uniform requirement over the industry, it maintains, would be overly burdensome to both lenders and consumers seeking credit.
The CFPB acknowledged that, in response to the original proposed 2017 Payday Loan Rule, it received a substantial number of comments from those who observed undesirable consequences from payday lending. However, those comments were far outnumbered by those from consumers who reported that payday loans, title loans, and other applicable products had been a necessary tool for survival in hard times where no other financing was available due to poor or nonexistent credit history.
In the alternative, the CFPB also proposed that enforcement of the 2017 Payday Loan Rule underwriting requirements be delayed due to massive overhaul in technology and training payday lenders would have to undergo in order to meet these underwriting requirements.
Director Kraninger has welcomed comment on all sides regarding this proposal, but it seems likely at this point that the anticipated underwriting requirements of the 2017 Rule will not be implemented or enforced.
The Notice of Proposed Rulemaking to rescind the underwriting requirements may be found here. BSCR will continue to monitor until a final rule is issued.
It is well known to financial services practitioners that a “debt collector” under the FDCPA is prohibited from using false or misleading information in furtherance of collecting a debt, and that a debt collector is liable for the claimant’s attorneys’ fees for such a violation. But a recent decision out of the Fifth Circuit serves as a worthwhile reminder that the conduct of a party and its counsel, as well as reasonableness of the fees, matters in considering whether or not to grant recovery of fees.
In Davis v. Credit Bureau of the South, the defendant’s name alone reveals a violation of 15 U.S.C. §§ 1692e(10), (16), as it had ceased to be a credit reporting agency years before it attempted to collect a past due utility debt from Ms. Davis under that name. Cross motions for summary judgment were filed, and the Court found that the defendant was liable for statutory damages under the FDCPA for inaccurately holding itself out as a credit reporting agency.
Subsequently, Davis’ attorneys filed a motion for recovery of their fees, relying upon 15 U.S.C. § 1692k(a)(3), which states that a debt collector who violates these provisions of the FDCPA “is liable [ . . . ] [for] the costs of the action, together with reasonable attorneys’ fees as determined by the court.” The motion sought recovery of fees in the amount of $130,410.00 based upon on hourly rate of $450.00. The trial court was, as it held, “stunned” by the request for fees and denied the motion. For its holding, the court cited to the fact that there was disposed of by summary judgment with a Fifth Circuit case directly on point, and that there were substantial duplicative and excessive fees charged by Plaintiff’s multiple counsel. The trial court also characterized the rate of $450.00 as excessive in light of the relative level of difficulty of the case and the fact that the pleadings were “replete with grammatical errors, formatting issues, and improper citations.” From this order, Davis appealed.
In its holding, the Fifth Circuit recognized that the FDCPA’s express language, and several other circuit holdings, suggest that attorneys’ fees to a prevailing claimant are mandatory. However, the Court relied upon other circuits that have permitted “outright denial” (as opposed to a mere reduction) of attorney’s fees for FDCPA claims in “unusual circumstances,” as well as other Fifth Circuit cases with similar conduct under other statutes containing mandatory attorney fee recovery, to deny recovery of fees altogether. The Court found there was extreme, outrageous conduct that precluded recovery of fees, where the record showed Davis and her counsel had colluded to create the facts giving rise to the action. For instance, Ms. Davis misrepresented that she was a citizen of Texas rather than Louisiana in order to cause the defendant to mail a collection letter, thus “engaging in debt collection activities in the state of Texas.” Furthermore, Davis and her counsel made repeated, recorded phone calls to the defendant asking repetitive questions in order to generate fees. While the FDCPA’s fee recovery provision was intended to deter bad conduct by debt collectors, the Fifth Circuit found it was even more important in this case to deter the bad conduct of counsel.
The Davis opinion may be found here and is a cautionary tale that attorneys’ fees, as well as behavior throughout a case, may be held under the microscope, even where the law suggests that fees are recoverable as a matter of right.
About Financial Services Law Blog
The BSCR Financial Services Law Blog explores current events, litigation trends, regulations, and hot topics in the financial services industry. This blog will inform readers of issues affecting a wide range of financial services, including mortgage lending, auto finance, and credit card/retail transactions. Learn more about the editor, Megan Stumph, and our Financial Services practice.
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