On January 18, the CFPB filed a proposed final judgment against an Illinois-based third-party payment processor and its founder (collectively, “defendants”), which ceased operations almost three years ago, settling claims that the defendants facilitated payments for telemarketing fraudsters targeting seniors.

Continue Reading CFPB Bans Payment Processor for Engaging in Fraudulent Practices

On January 20, the Federal Reserve (Fed) released a much-anticipated discussion paper examining the pros and cons of a potential U.S. central bank digital currency (“CBDC”). To fully evaluate a potential CBDC, the Fed asks for public comment on more than 20 questions. Comments will be accepted for 120 days and can be submitted here.

Continue Reading Federal Reserve Examines Pros and Cons of a Central Bank Digital Currency

On November 3, Acting Comptroller of the Currency, Michael J. Hsu, remarked at the BritishAmerican Business Transatlantic Finance Forum 2021-2022 Executive Roundtable about the regulation of stablecoins and other crypto-assets (we discussed Hsu’s previous remarks on crypto trends and risks in earlier Consumer Finance & FinTech Blog posts here, here, and here). In his remarks, Hsu emphasized the following:

Continue Reading OCC: Bank Regulation Would Mitigate Crypto Risk

On January 13, the FTC announced that a leading business credit report provider agreed to settle allegations that it had engaged in deceptive and unfair business practices.  The FTC alleged that businesses complained of costly errors in the credit reports, which the company failed to remedy.  Additionally, the company’s suite of credit-improving products costing business hundreds or thousands of dollars per year failed to provide any real benefit to businesses.  Also, the company’s telemarketers deceptively pitched another service to businesses and falsely claimed that the businesses had to purchase the service for the company to complete the business’s credit profile.  Finally, the company allegedly did not disclose to businesses that the service’s subscription is automatically renewed each year, nor did it properly disclose other renewal practices that led to increasing costs.

Continue Reading FTC: Provider of Business Credit Reports Engaged in Deceptive and Unfair Practices, Refunds Customers

Section 1033 of the Dodd-Frank Act states that consumers have the right to access their own bank account and transaction data in a usable electronic format.  This provision mandates that the CFPB adopt a rule relating to data access.  However, the timeline for this rule has been fluid, in part due to the CFPB’s full agenda and the time needed by Rohit Chopra, the CFPB’s new director and a former member of the Federal Trade Commission, to make his own determinations about the rule.

Continue Reading CFPB Likely to Delay Data Sharing Rule Until 2023

On January 7, the FTC announced that a California-based lead generator agreed to settle with the FTC for $1.5 million to resolve allegations that through a number of its subsidiaries, the company induced consumers into sharing their personal financial information and then sold that information from these loan applications as “leads” to a variety of entities without regard to whether these entities are lenders or use the consumers’ data to make loans.

Continue Reading Lead Generator Settles with FTC Over Alleged FCRA and FTC Act Violations

On January 5, the CFPB released its Annual Report of Credit and Consumer Reporting Complaints that analyzes complaint responses by the three major consumer reporting agencies (CRAs).  The CFPB’s analysis reveals that recent changes in complaint responses provided by the CRAs resulted in fewer meaningful responses and with fewer instances of relief to consumers.  As a result, the CFPB concludes that the CRAs failed to meet their obligations under Section 611 of the Fair Credit Reporting Act, which requires that CRAs review consumer allegations of incomplete or inaccurate information on consumer credit reports, including allegations made by an authorized third-party representative of the consumer.

Continue Reading CFPB Report: Major Credit Bureaus Failed to Meet Statutory Obligations in Response to Consumer Complaints

On January 5, the FTC announced that two defendants will be permanently banned from the merchant cash advance and debt collection industries, and required to pay $675,000 to resolve allegations that they used deceptive and illegal means to seize assets from small businesses, non-profits, and religious organizations.  The order results from a 2020 complaint against two New York-based companies engaged in small-business financing, along with several of their owners and officers.

Continue Reading FTC Bans Merchant Cash Advance Provider from Industry

On December 17, the CFPB filed a proposed stipulated final judgment and order against a limited liability company, its principals, and an attorney who allegedly provided advisory services to consumers who sold structured settlements to the company.   The CFPB alleged that the company steered consumers to consider signing away future structured settlement payments for lump-sum payments, and to receive “independent advice” from an attorney who was paid directly by the company who indicated to consumers that the transactions required very little scrutiny.

Continue Reading CFPB Takes Action Against Purchaser of Structured Settlements

On December 22, New York Governor, Kathy Hochul, signed Senate Bill 1780C (S1780C), which allows the state’s notaries to conduct remote online notarizations (RON). The law is to be effective on June 20, 2022.  Among other things, the bill: (i) establishes definitions and sets forth registration requirements for electronic notaries public; (ii) establishes that notarial acts can be performed electronically, subject to certain requirements; (iii) sets forth instructions on how electronic notarization is to be performed; and (iv) provides that notaries public may collect fees for electronic notarial services, as authorized by the Secretary of State.

Continue Reading New York Makes Remote Online Notarizations Permanent

On December 21, an online lending fintech agreed to a stipulated final judgment with the CFPB to resolve a September 2021 complaint alleging that the company deceived consumers and violated the Equal Credit Opportunity Act (“ECOA”) (we discussed this complaint in an earlier Consumer Finance & FinTech Blog post here).  The stipulated final judgment prohibits the company from making new loans, collecting on outstanding loans to harmed consumers, selling consumer information, and making misrepresentations when providing loans or collecting debt or helping others that do so.  The company also agreed to a $40,500,000 suspended monetary judgment, and a $100,000 civil penalty based on its limited ability to pay.

Continue Reading CFPB Closes Online Lending Fintech for Violating ECOA and CFPB Consent Order