Morgan Drexen Loses Constitutional Challenge In CFPB Suit

Law360, New York (January 14, 2014, 1:09 PM EST) -- A California federal judge on Friday denied Morgan Drexen Inc.’s bid to evade a government lawsuit claiming the company collects illegal upfront fees for debt-relief services through a deceptive contract structure, rejecting the company’s argument that the Consumer Financial Protection Bureau is unconstitutional.

The agency alleged Nevada-based Morgan Drexen and its CEO Walter Ledda violated the Telemarketing Sales Rule and the Dodd-Frank Wall Street Reform and Consumer Protection Act by skirting laws generally forbidding upfront fees. The company allegedly does that by having customers who sign...
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