Agency Rule-Making & Guidance

On July 27, CFPB Director Chopra was interviewed in multiple publications, here and here, about, among other topics, how the CFPB could seek to help mortgage borrowers strained by the Federal Reserve’s battle against inflation and how the agency is looking at cryptocurrency. Below are some of the more important updates from the interviews.

Continue Reading CFPB’s Chopra Has Payments and Crypto In Focus

Recently, the Federal Reserve Board (Fed) published its annual Cybersecurity and Financial System Resilience report describing measures it has taken to strengthen cybersecurity in the financial services sector, including the supervision and regulation of financial institutions and third-party service providers.

Continue Reading Fed Reports on Cybersecurity and Financial System Resilience

On July 11, CFPB Director Rohit Chopra drafted a blog post detailing the Bureau’s efforts to comply with President Biden’s Executive Order on Promoting Competition in the American Economy aimed, in part, to address the Administration’s concerns about pressing antitrust and competition issues affecting consumers. The CFPB was directed by the Order to explore ways to make it easier for consumers to switch financial institutions and to aggressively enforce the prohibition of UDAAPs in consumer financial products and services pursuant to the Dodd-Frank Act.

Continue Reading CFPB Continues Efforts to Promote Competition in Financial Markets

On July 15, the California DFPI released draft text for a proposed second rulemaking under the Debt Collection Licensing Act (DCLA) relating to the scope, annual report, and bond amount increase provisions of the DCLA.

Continue Reading DFPI Second Rulemaking Proposal on Debt Collection Licensing

Two weeks after the DFPI set a Dec. 9 effective date for its long-threatened commercial financing disclosure requirement (we discussed these regulations in a previous bog, here), the DFPI issued proposed commercial UDAAP and annual reporting regulations likely impacting many of the same companies. Specifically, the proposed regulations would apply to providers of commercial financing or other financial products and services to small businesses, nonprofits, and family farms, and would (i) expand the DFPI’s UDAAP authority, and (2) impose annual reporting requirements on covered providers (we briefly discussed these proposed regulations in a previous blog post here).

Continue Reading Proposed California Commercial UDAAP and Annual Reporting Regs to be Promulgated Under California Consumer Financial Protection Law

On June 28, the CFPB issued an interpretive rule affirming states’ abilities to police credit reporting markets through the issuance of their own fair credit report laws. The interpretive rule clarifies that the Fair Credit Reporting Act (FCRA) does not prevent states from enacting their own fair credit reporting laws that are stricter and more protective of consumers. The FCRA defines the permissible use of credit reports, and establishes the guidelines of the information that can and should be included in those reports. However, the FCRA leaves to the states the flexibility to consider local challenges affecting consumers and economies, and enact laws to protect consumers by further regulating credit report guidelines and uses. State fair credit reporting laws are not preempted by the FCRA unless they directly conflict with the FCRA or fall within the narrow preemption categories directly enumerated in the statute, according to the interpretive rule.

Continue Reading CFPB Issues Rule Clarifying States’ Rights to Protect Consumers Through Fair Credit Reporting Laws

On June 29, the CFPB issued an advisory opinion affirming that the Fair Debt Collection Practices Act (FDCPA) and Regulation F prohibit debt collectors from collecting pay-to-pay or “convenience fees” imposed for making a payment in a particular way, such as by phone or online, when such fees are not expressly authorized by the underlying agreement or otherwise permitted by law. In interpreting FDCPA Section 808, the Bureau’s advisory opinion explains that:

Continue Reading CFPB Advisory Opinion: Pay-to-Pay, “Convenience” Fees Prohibited by FDCPA

In 2009, Congress enacted the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). Among other things, the CARD Act curtailed a range of junk fees, coercive contract clauses, and other suspicious practices. In 2010, the Federal Reserve Board of Governors’ (Fed) voted to implement provisions of the CARD Act that required penalties to be “reasonable and proportional to the omission or violation.” While the Fed prohibited collecting excessive late fee penalties, the Fed also included a provision that allowed credit card issuers to escape enforcement scrutiny if they set fees at or below a particular level, which may be adjusted annually for inflation (immunity provision). Currently, Regulation Z, which implements the CARD Act, sets forth a safe harbor of $30 for fees generally, with exceptions and alternatives for specific scenarios.

Continue Reading CFPB Examines Credit Card Late Fees

On June 23, the FTC proposed a rule that would prohibit junk fees, bait-and-switch advertising, and other deceptive practices by auto dealers to protect consumers and honest dealers in the car-buying process. The proposed measures would:

Continue Reading FTC Targets Junk Fees, Bait-and-Switch Advertising by Auto Dealers