Agency Rule-Making & Guidance

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On May 10, the CFPB announced the release Circular 2023-02 to confirm that reopening closed accounts may violate federal law. Based on its review of consumer complaints, the CFPB observed that after customers closed their bank accounts, some accounts were reopened without customer consent and then assessed overdraft/nonsufficient funds fees and monthly maintenance fees. The Bureau warned that such practices may violate the CFPA’s prohibition on unfair acts or practices. “When a bank unilaterally chooses to open an account in someone’s name after they have already closed it, this is a fake account,” CFPB Director Rohit Chopra said in the announcement. “The CFPB is acting on all fronts to halt the harvesting of illegal junk fees.”…

Continue Reading New CFPB Circular: Reopening Closed Accounts May Violate CFPA 

On April 26, 2023, the CFPB issued an advisory opinion, which reiterated that the FDCPA and Regulation F prohibit certain debt collectors from suing to collect on debt or threatening to foreclose on homes with mortgages past the statute of limitations, or “time-barred” debt. Such guidance is a result of actions by certain debt collectors to foreclose on silent second mortgages, referred to as “zombie mortgages,” that consumers thought had been satisfied and that are likely not enforceable in court.…

Continue Reading CFPB Issues Guidance to Protect Homeowners from Zombie Mortgages

On April 14, the CFPB filed a statement of interest in a case currently pending before the United States District Court for the Southern District of Florida in an attempt “to help protect consumers from discriminatory targeting.” In a press release announcing the filing of the statement of interest, the CFPB explained that “discriminatory targeting” is the act of directing predatory or otherwise harmful products or practices at certain groups, neighborhoods, or parts of a community.…

Continue Reading CFPB Statement of Interest Highlights Focus on Discriminatory Access to Credit

On March 8, the CFPB released a special edition of its Supervisory Highlights reporting on unlawful junk fees that were uncovered in a variety of servicing markets, including bank account deposits, auto loan servicing, mortgage loan servicing, payday lending, and student loan servicing during examinations between July 1, 2022, and February 1, 2023. Specific discoveries during such time period include:…

Continue Reading Junk Fees Continue to be Focus of CFPB, Biden Administration

On April 4, CFPB Director Rohit Chopra delivered remarks at the International Association of Privacy Professionals’ Global Policy Summit on the importance of reigning in repeat violators of consumer finance and privacy laws. According to the Director, the CFPB is to enhance penalties against repeat offenders of consumer protection laws. Such penalties could involve a broader range of agency remedies, including naming executives in enforcement actions and placing meaningful limitations on future business practices, in addition to simple fines.…

Continue Reading CFPB Director Elevates Priorities for Data Privacy & Repeat Offenders

On April 3, the CFPB issued a policy statement explaining the legal prohibition on “abusive” conduct in consumer financial markets provided in the Consumer Financial Protection Act (CFPA) and provided a summary past enforcement where these provisions have been applied.…

Continue Reading CFPB Issues Guidance on “Abusive” Conduct in Financial Markets

On March 28, the CFPB issued a preemption determination that that TILA does not preempt commercial lending disclosure regulations enacted in California, New York, Utah, and Virginia (we discussed state commercial financing disclosure laws in previous posts here, here, and here). After analyzing public comments on its preliminary determination about whether New York’s commercial financing disclosure law is not preempted by TILA, the CFPB reiterated there is no preemption because the states’ statute require lenders to include disclosures in their commercial financing transactions with businesses, and commercial financing transactions are not covered by TILA.…

Continue Reading CFPB: TILA Does Not Preempt State Commercial Financial Disclosures

Today, the CFPB has issued the small business lending final rule to implement changes to the Equal Credit Opportunity Act made by Section 1071 of the Dodd-Frank Act to require financial institutions to compile data regarding certain business credit applications and report that data to the CFPB (we previously discussed Section 1071 rulemaking in prior blog posts here and here). According to the CFPB, Section 1071’s purposes are “facilitating enforcement of fair lending laws and enabling the identification of business and community development needs and opportunities for women-owned, minority-owned, and small businesses.” While the final rule includes almost 900 pages of rulemaking, highlights include the following:…

Continue Reading CFPB Issues Small Business Lending Rule

On March 15, the CFPB issued a Request for Information (RFI) about data broker business practices to inform planned rulemaking under the FCRA and provide the CFPB with insight into the full scope of the data broker industry. In particular, CFPB is seeking information about (i) new business models that sell consumer data and (ii) consumer harm and market abuses.…

Continue Reading CFPB Launches Inquiry into the Business Practices of Data Brokers

On February 28, 2023, the FTC and the CFPB issued a joint request for information (“RFI”) seeking public comment on background checks used to screen potential tenants for rental housing. As part of the RFI, the FTC and the CFPB are asking current tenants, prospective tenants, advocacy groups, commercial and individual landlords, property managers, background screening companies, other consumer reporting agencies, and others to weigh in on a wide array of issues that affect tenant screening, such as:…

Continue Reading CFPB, FTC Seek Public Comment on Tenant Background Checks