On February 9, the FTC provided the CFPB and the Federal Reserve Board with its annual letter that summarizes its activities enforcing the ECOA and its implementing regulation, Regulation B, in the prior year. The FTC is in charge of ECOA enforcement for financial service providers that are not banks, thrifts, or federal credit unions. In accordance with the Dodd-Frank Act, the CFPB has rulemaking and enforcement authority over ECOA, and the FTC retains its authority to enforce ECOA, as well as authority to enforce any CFPB rules applicable to entities within the FTC’s jurisdiction. As set forth in full in the letter, the FTC describes its work in areas such as enforcement, research, and policy development, including:
FTC Imposes Record-Setting $10M Fine Against Multistate Auto Dealer, Settling Charges of Racial Discrimination and Unauthorized Charges
On March 31, the FTC and Illinois State Attorney General announced a settlement of charges against a large, multistate auto dealer that allegedly discriminated against black consumers and included illegal junk fees for unwanted “add-ons” in customers’ bills.
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CFPB Closes Online Lending Fintech for Violating ECOA and CFPB Consent Order
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.
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CFPB Sues Online Lender for Alleged Violations 2016 Consent Order
The CFPB recently filed a complaint against an online installment and single-payment lender alleging that it violated the terms of a 2016 consent order that previously required the company to pay millions in consumer redress and a civil penalty and to stop misleading consumers with false claims about the cost of loans and the benefits of repeated borrowing.
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