On May 20, the CFPB settled an enforcement action against a California-based telemarketing firm for practices related to student loan debt relief services. The Bureau has ordered the firm to permanently halt operations and pay a $400,000 civil money penalty, in addition to ordering the recission of all the firm’s existing contracts with consumers.Continue Reading CFPB Shuts Down Debt Relief Provider Over Fraudulent Student Loan Practices

On January 2, 2024, New York Governor Kathy Hochul announced “a sweeping consumer protection and affordability agenda,” what she termed as the “most significant expansion of consumer laws since 1980.” As part of that agenda, she announced expanding UDAAP protections and registration requirements for BNPL providers.Continue Reading New York Governor Consumer Protection Agenda Targets Unfair and Deceptive Practices and BNPL Providers

On September 8, a Texas federal judge ruled that the CFPB exceeded its authority by adopting a sweeping anti-discrimination policy last year. The CFPB adopted the policy in March 2022, via an update to its exam manual, stating that discrimination in any financial product is an “unfair” practice that can trigger liability under the federal prohibition against “unfair, deceptive or abusive acts or practices” or UDAAPs (we discussed this policy in previous posts here and here). The CFPB offered examples of practices that may be unfair because they are discriminatory, including offering one set of products or services to a certain customer demographic and a greater set of products or services to another customer demographic, providing inferior terms to one customer demographic as compared to another customer demographic, and engaging in targeted marketing or advertising in a discriminatory manner. Continue Reading Texas Court Strikes Down CFPB UDAAP Policy

Recently, the California Department of Financial Protection and Innovation (DFPI) approved the final rule implementing and interpreting certain sections of the California Consumer Financial Protection Law (CCFPL) that prohibit persons from engaging in unfair, deceptive, or abusive acts or practices (UDAAP) related to commercial financial products and services and establishes data collection and reporting requirements.Continue Reading California DFPI Finalizes Small Business UDAAP Rule

On July 26, the CFPB released its Summer 2023 Supervisory Highlights reporting unfair, deceptive, and abusive acts or practices (UDAAPs) across a number of consumer financial products, including auto origination, auto servicing, consumer reporting, debt collection, deposits, fair lending, information technology, mortgage origination, mortgage servicing, payday and small dollar lending, and remittances, in violation of the CFPA. Below we focus on some key areas in particular.Continue Reading Latest CFPB Supervisory Highlights Detail UDAAPs Across Range of Areas

On July 19, the CPFB filed a complaint against a lease-to-own finance company, alleging that the company has offered and provided millions of “lease-purchase” and “rental-purchase” financing agreements in ways that have harmed consumers, including through misleading advertisements, insufficient disclosures, and interfering with consumers’ ability to understand the terms and conditions of its financing agreements. The CFPB additionally alleges that the company harmed consumers in servicing its lease-to-own financing products by misrepresenting payment obligations and making false threats in collections. Specifically, the CFPB alleges that the company engaged in the following illegal activity:Continue Reading CFPB Sues Lease-to-Own Finance Company for Allegedly Deceiving Consumers

On December 1, the CFPB and a financial services company filed a stipulated proposed court order seeking the resolution of a CFPB suit alleging that the financial services company made false, misleading, and inaccurate marketing representations to consumers regarding its “high yield” savings account offering. In its original complaint, the CFPB alleged that the financial services company engaged in four separate false representations to consumers in violation of the CFPA:
Continue Reading CFPB Targets Financial Services Company for Deceptive Advertising

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 American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America, and the U.S. Chamber of Commerce affirmed in a letter to CFPB Director Rohit Chopra that the CFPB should rescind its recent updates to the exam manual allowing for the examination of financial institutions unfair, deceptive, and abusive acts or practices or UDAAPs. The group conveyed to Director Chopra that “Congress did not authorize or intend for the CFPB to “fill gaps” between the clearly articulated boundaries of antidiscrimination statutes with its UDAAP authority.” (We discussed this exam manual update in a previous blog post here).
Continue Reading Industry Groups to CFPB: Take Back UDAAP Anti-Discrimination Policy

On May 17, the FDIC and the CFPB took parallel actions to combat the misuse of  the name or logo of the FDIC and deceptive representations about deposit insurance.  The FDIC approved a final rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo.  The CFPB followed suit by releasing Consumer Financial Protection Circular 2022-02 providing that company’s likely violate the CFPA’s prohibition on deception acts or practices if they misuse the name or logo of the FDIC or engage in false advertising or make misrepresentations to consumers about deposit insurance, regardless of whether such conduct (including the misrepresentation of insured status) is engaged in knowingly.
Continue Reading FDIC and CFPB Take Action to Protect Against Misrepresentations about FDIC Insured Status and Misuse of Name and Logo

On March 22, the CFPB issued Compliance Bulletin 2022-05 regarding potentially illegal practices related to consumer reviews.  The guidance states that consumer reviews impact company revenue and help consumers choose between financial providers, which can in turn “incentivize dishonest market participants to attempt to manipulate the review process, rather than compete based on the value of their services, which can frustrate a competitive marketplace.”
Continue Reading CFPB Flexes UDAAP Muscle Over Contractual “Gag” Clauses and Fake Consumer Reviews