On September 24, the Governor of California signed AB 2017 (the “Act”) into law. The Act prohibits state-chartered banks and credit unions from charging consumers non-sufficient fund fees (“NSF fees”) when they initiate transactions that are instantaneously declined due to insufficient funds.Continue Reading California Enacts Law Prohibiting State Banks and Credit Unions from Charging NSF Fees
On September 17, the California Department of Financial Protection and Innovation (DFPI) announced enforcement actions against three student loan debt relief companies. The companies were ordered to cease unlawful practices, including charging upfront fees prior to providing services. They were also required to cancel all outstanding contracts with California consumers, issue refunds, and collectively pay $260,000 in penalties.Continue Reading DFPI Cracks Down on Illegal Student Loan Debt Relief Practices
On September 30, a credit repair service provider and its owner were ordered to pay $31 million in consumer redress, and a $19 million civil money penalty, when a Massachusetts federal court granted summary judgment for the CFPB and the Massachusetts Attorney General.Continue Reading Credit Repair Company Fined $50M for Misleading Consumers
On September 24, California enacted a series of consumer protection laws, including three bills aimed specifically at restricting certain debt collection practices in connection with medical debt reporting, civil actions for money judgments, and commercial debt collection.Continue Reading California Expands Debt Collection Protections for Small Businesses and Consumers
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 12, the National Consumer Law Center (NCLC), a prominent consumer advocacy group, petitioned the CFPB to open rulemaking under the Equal Credit Opportunity Act (ECOA) to expand the definition of “credit” to include housing and apartment rental leases, and “creditors” to include landlords. While acknowledging that landlords are already banned from discriminating against prospective tenants under the federal Fair Housing Act, the petition aims to secure two additional protections. Continue Reading Advocacy Group Petitions CFPB to Categorize Housing Rental Leases as “Credit”
On August 5, the FTC announced a proposed settlement which included a $12 million fine in connection with a complaint it filed against operators of a credit repair operation in May of 2022. The initial complaint alleged that the company violated the Credit Repair Organizations Act, the FTC Act’s prohibition against unfair, deceptive, and abusive acts and practices, and the Telemarketing Sales Rule, by preying on consumers with low credit scores by deceptively promising credit building services they could not deliver on, and taking illegal advance fees. Continue Reading Allegedly Deceptive Credit Repair Scheme Settles with FTC for $12 Million
On August 8, the CFPB filed a proposed order to resolve its 2021 lawsuit (previously discussed here) against a California-based software company and its CEO for their role in helping credit repair businesses charge illegal advance fees to customers in violation of the Telemarketing Sales Rule and the Consumer Financial Protection Act.Continue Reading CFPB Settles Action against Third-Party Service Provider Supporting Credit Repair Industry
On July 29, the FTC filed a stipulated order settling claims against an online career-training company on the grounds that it engaged in deceptive advertising. In addition to injunctive relief barring the company from engaging in deceptive acts, the order requires the company to pay a $15.7 million fine and cancel approximately $27.8 in consumer debt. Continue Reading FTC Settles Action Against Online Career-Training Company for Deceptive Advertising
On July 10, the CFPB announced proposed rules for mortgage servicers, aimed at helping homeowners avoid foreclosures. The new rules, which would modify RESPA and Regulation X’s existing mortgage servicing framework, are designed to streamline the process for obtaining mortgage assistance, and incentivize servicers to prioritize borrower aid over foreclosure.Continue Reading CFPB Proposes Revamped RESPA Mortgage Servicing Rules
On June 14, the CFPB published a press release announcing that its 2017 Payday, Vehicle Title and Certain High-Cost Installment Loans Rule (“Payday Lending Rule”) will go into effect on or about March 30, 2025. According to the Bureau, the rule will target unfair and abusive practices in short-term installment lending and will aim to curb lenders’ efforts to repeatedly withdraw payments from a borrower’s bank account, even after knowing the borrower’s account was shown to have insufficient funds. The CFPB determined such debiting practices rarely benefited lenders and created negative consequences for borrowers such as overdraft and insufficient fund fees, or even account closures by their banks.Continue Reading Payday Lending Rule Slated to Take Effect, 7 Years Later