On September 17, the CFPB issued a circular stating that financial institutions can be found liable for violating the Electronic Funds Transfer Act by charging overdraft fees if the there
Continue Reading CFPB Issues Circular Warning Against Overdraft Practices
In a letter to the CFPB released on September 10, several Senate Democrats implored the Bureau to establish stricter guardrails for BNPL providers, arguing that consumer harm will occur absent
Continue Reading Senators Urge Regulators to Adopt Tighter Controls for BNPL
On September 13, the CFPB filed a complaint against a nonbank corporation and its CEO, alleging that the company engaged in deceptive and abusive acts through misleading advertising and unjustified, exorbitant fees related to its credit card program. The CFPB claims these actions violate both the Consumer Financial Protection Act and the Truth in Lending Act.Continue Reading CFPB Cracks Down on Credit Services Provider for Gouging and Trapping Consumers
On September 12, 2024, the Consumer Financial Protection Bureau (CFPB) filed a proposed order which, if entered by the court, will ban a student loan servicer from servicing federal student loans and require it to pay $120 million—$20 million in civil money penalties and $100 million in redress for harmed borrowers—for what is described as “wide-ranging student lending failures” resulting in violations of the Consumer Financial Protection Act, the Fair Credit Reporting Act, and the Fair Debt Collection Practices Act.Continue Reading CFPB Settles Action Against Student Loan Servicer with Industry Ban
On September 5, the CFPB issued its annual report on debt collection practices, detailing the Bureau’s efforts to enforce the Fair Debt Collection Practices Act (FDCPA). This year’s report focuses on improper practices in the collection of medical and rental debt.Continue Reading CFPB Targets Medical and Rental Debt Collection in 2024 Annual Report
On August 28, the CFPB issued a Consumer Advisory warning that it believes video game companies are targeting children for monetary gain. With 45.7 million U.S. children engaged in video gameplay, the agency is concerned about the financial risks that games and virtual worlds pose, especially to young consumers. This Advisory highlights a growing focus on the game industry’s practices, which allegedly mimic traditional banking systems but lack corresponding consumer protections. Continue Reading The CFPB Continues to Reshape Consumer Protection in the Digital Arena
On August 29, the CFPB issued a consent order against a non-bank direct mortgage lender for misrepresenting the cost of its cash-out refinance loans, which are guaranteed under the VA home loan program, to active-duty servicemembers and veterans.Continue Reading CFPB Penalizes VA Lender for Misrepresenting Cost of Cash-Out Refinance Loans
On August 21, a group of trade organizations filed an amicus brief in support of a motion to dismiss filed by a subprime auto lender that is the target of a joint enforcement action brought by the CFPB and the New York State Office of the Attorney General in the Southern District of New York. The underlying complaint alleges that the auto lender misrepresented costs in loan agreements and tricked customers into high-cost loans on used cars in violation of the CFPA and New York usury limits (see previous blog post here). In particular, the complaint alleges that: (1) the auto lender’s business model allegedly incentivizes vehicle dealers to inflate vehicle prices so that the true finance charges in the retail installment contracts that dealers originate are hidden from consumers; and (2) the lender fails to assess consumers’ ability to pay prior to extending credit. Continue Reading Amicus Brief Argues CFPB Overreached in Enforcement Action Against Auto Lender
On August 21, the CFPB entered into a consent order with a nonbank mortgage servicer for mortgage servicing violations and for violating an earlier 2017 CFPB consent order for deficient foreclosure practices. Continue Reading CFPB Hits Executive Compensation in Action Against National Mortgage Servicer for Illegal Foreclosure Practices
On August 26, the United States District Court for the Southern District of Texas issued a decision upholding the legality of the CFPB Small Business Lending Rule (the “Rule”) (designed to implement section 1071 of the Dodd-Frank Act) in a lawsuit filed by plaintiff trade associations challenging the CFPB’s authority in promulgating the Rule (previously discussed here and here).Continue Reading Federal Court Upholds CFPB’s Small Business Lending Rule
On August 13, the CFPB announced an advisory opinion on the applicability of the Truth in Lending Act (TILA) and Regulation Z to “contracts for deed.” A contract for deed is an arrangement in which a consumer purchases a home from a seller subject to the purchaser paying for the home over time. The purchaser moves into the home and assumes responsibility for taxes, insurance, home maintenance and repairs, but does not take title to the home until all payments due are made to the seller. The arrangement is also known by other names, such as “land sales contract,” “land installment contract,” and “agreement for deed.” The arrangement is very similar in many respects to an installment sales contract for the purchase of goods. Continue Reading CFPB Announces Advisory Opinion on Applicability of TILA and Regulation Z To Contracts for Deed