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The Consumer Financial Protection Bureau (CFPB) recently published its Semi-Annual Report to Congress, detailing its activities from October 2022 to March 2023. CFPB Director Rohit Chopra testified before the House Financial Services Committee and the Senate Banking Committee, discussing the state of the consumer financial services marketplace. He highlighted high levels of consumer debt, particularly in credit card and auto lending markets. Director Chopra also mentioned the Bureau's proposed rule to implement Dodd-Frank Section 1033, efforts to address "junk fees," and the Bureau's supervision and enforcement efforts, which have resulted in $8 billion in penalties and redress. He also expressed concerns about the role of artificial intelligence in financial services. [Extracted from the article]

President Joe Biden recently spoke about his administration's efforts to combat "junk fees," which are hidden charges that companies add to bills. He called on Congress to pass the Junk Fee Prevention Act, which would outlaw certain fee practices and empower the Federal Trade Commission (FTC) and other agencies to create rules to enforce the law. The FTC has proposed a regulation that would prohibit unfair or deceptive practices related to fees for goods or services. Additionally, California has passed legislation banning "drip pricing," where companies advertise a price that is lower than the actual cost. These efforts aim to protect consumers from hidden fees and promote fair business practices. [Extracted from the article]

The Consumer Financial Protection Bureau (CFPB) has released its Fall 2023 Rulemaking Agenda, which outlines upcoming rulemakings from November 2023 to October 2024. In December 2023, the CFPB plans to finalize a proposed rule that limits credit card late fees. They also anticipate issuing two proposed rules, one regarding overdrafts and another concerning non-sufficient funds (NSF) fees. The agenda includes other potential rulemakings, such as amending regulations related to fair credit reporting and mortgage servicing. The CFPB aims to finalize rulemakings on various topics in 2024, including nonbank registries and the application of ability-to-repay requirements. However, specific dates for certain rulemakings are not provided in the agenda. [Extracted from the article]

The Consumer Financial Protection Bureau (CFPB) has submitted a comment letter to the California Department of Financial Protection and Innovation (DFPI) regarding a proposal that would require companies offering income-based advances to register and undergo examination. The CFPB supports the proposal, stating that state supervision of consumer financial services providers promotes consumer protection. The CFPB plans to issue further guidance on the application of federal law to income-based advance products. [Extracted from the article]

The Fall 2023 issue of the CFPB's Supervisory Highlights focuses on supervisory examination findings regarding junk fees. The Bureau describes junk fees as anticompetitive behavior and notes that supervised institutions have started to compete more when it comes to fees. The Bureau's supervisory work in this area has resulted in institutions refunding over $140 million to consumers. The issue also highlights violations of law in areas such as deposits, auto servicing, and remittances. Additionally, concerns were raised about payment platforms for K-12 student meal accounts, although no specific law violations were identified. [Extracted from the article]

The article discusses a joint statement issued by the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) regarding the consideration of borrowers' immigration status under the Equal Credit Opportunity Act (ECOA). While Regulation B, which implements ECOA, does not explicitly prohibit considering immigration status, it does allow creditors to take it into account in certain contexts. However, the joint statement cautions against unnecessary or biased reliance on immigration status, as it may violate ECOA's antidiscrimination provisions and other laws. The statement also highlights the potential for immigration status to serve as a proxy for protected characteristics, such as race and national origin, and emphasizes the need for evidence-based criteria and fair lending practices. Additionally, the article mentions creditors' obligations under 42 U.S.C. § 1981, which provides broad antidiscrimination protections. [Extracted from the article]

In a recent speech, CFPB Director Rohit Chopra discussed the relationship between the CFPB and the U.S. mortgage market, highlighting the Bureau's role in implementing new standards to ensure safety and transparency. He argued that if these rules had been in place during the 2008 crisis, families would have been able to keep their homes and the Great Recession would have had a different outcome. Director Chopra also expressed concerns about the pending CFSA case in the Supreme Court, stating that it could have significant implications for the financial regulatory system. He emphasized the importance of the CFPB's regulations for the stability of the financial markets and household finances. [Extracted from the article]

In a recent speech at the Federal Reserve Bank of Philadelphia's Annual Fintech Conference, CFPB Director Rohit Chopra discussed the role of "Big Tech" in mobile payment systems. He highlighted the dominance of two large tech firms in the market and expressed concerns about their practices, particularly Apple's restrictions on third-party apps accessing tap-to-pay technology. Director Chopra also mentioned the CFPB's ongoing efforts to implement Dodd-Frank section 1033, which aims to enhance consumer control over financial data. A proposed rule for section 1033 is expected to be released next month. [Extracted from the article]

In December, twenty-one state attorneys general sent letters to the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) requesting assistance with investigations of federally chartered banks and the enforcement of state consumer protection laws. The attorneys general expressed concern that federally chartered banks often refuse to cooperate with investigations and fail to provide necessary documents or testimony. They suggested that the CFPB develop a formal mechanism for state attorneys general to seek assistance when facing resistance from federally chartered banks. [Extracted from the article]

Congressman Andy Barr has introduced proposed legislation in the U.S. House called the "Rectifying Undefined Descriptions of Abusive Acts and Practices Act." The legislation aims to amend and clarify the standards surrounding the authority of the Consumer Financial Protection Bureau (CFPB) to police unfair, deceptive, and abusive acts and practices (UDAAP) under the Consumer Financial Protection Act. The proposed legislation includes provisions such as requiring the Bureau to issue rules on civil penalties for UDAAP violations, defining "abusive act or practice," prohibiting the inclusion of discriminatory practices under UDAAP, and limiting the Bureau's ability to seek civil penalties for conduct prior to the target's most recent consumer compliance rating. [Extracted from the article]

The Consumer Financial Protection Bureau (CFPB) has filed an appeal against a ruling by the U.S. District Court of the Eastern District of Texas in a case involving changes to the Bureau's Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) examination manual. The dispute arose when the CFPB revised the manual to include discriminatory conduct as a violation of the Dodd-Frank Act prohibition on unfairness, despite the existence of more specific antidiscrimination laws. Trade groups sued the Bureau, and the district court ruled in their favor, invalidating the manual changes. The appeal will be heard by the U.S. Court of Appeals for the Fifth Circuit. [Extracted from the article]

The Consumer Financial Protection Bureau (CFPB) has proposed a rule that would subject larger nonbank digital payment application providers to Bureau supervision. This proposal is based on the Bureau's authority under the Consumer Financial Protection Act to designate for supervision any nonbank covered person that poses risks to consumers in the offering or provision of consumer financial products or services. The proposed rule aims to ensure compliance with federal consumer financial law, monitor for new risks, and level the playing field between nonbanks and depository institutions. The rule defines "larger participants of the general-use digital payment market" as entities with an annual covered consumer payment transaction volume of five million or more, excluding small business concerns. Congresswoman Maxine Waters has praised the proposed rule for protecting consumers regardless of whether they use traditional bank accounts or digital wallets. Comments on the proposed rule are due by January 8, 2024, or thirty days after publication in the Federal Register. [Extracted from the article]

The article discusses a case, Suluki v. Credit One Bank, currently pending before the U.S. Court of Appeals for the Second Circuit, which involves the Fair Credit Reporting Act (FCRA) duties of furnishers of consumer report information. The plaintiff disputed a tradeline in her credit file, alleging identity fraud, but the defendant declined to delete the information after investigating the dispute. The trial court denied the plaintiff's motion for summary judgment, finding that there was a genuine issue of fact regarding the reasonableness of the investigation. The CFPB and FTC filed an amicus brief arguing that the trial court's ruling should be reversed, as it failed to consider the possibility that a reasonable investigation would have concluded that the debt could not be verified. The amici maintain that the defendant should have deleted the debt, and its failure to do so may have injured the plaintiff. [Extracted from the article]

A recent report published by the CFPB's Offices of Consumer Populations and Markets highlights a significant decline in insufficient fund (NSF) fees charged by banks and credit unions. The report reveals that a majority of large banks have eliminated NSF fees in recent years, resulting in a 97% decrease in NSF fee revenue for banks with over $10 billion in assets. This change has led to an estimated annual savings of nearly $2 billion for consumers. However, the report also notes that some institutions, particularly large credit unions, still charge NSF fees, and the CFPB will continue to monitor these practices. [Extracted from the article]

The Consumer Financial Protection Bureau (CFPB) has published a report titled "Tuition Payment Plans in Higher Education," which examines the payment of college tuition through payment plans. The report found that nearly all colleges offer tuition payment plans, with millions of students utilizing these plans each year. However, the disclosures related to these plans vary widely, and some students are forced into them, leading to fees and financial difficulties. Late payment fees under these plans are high, and some plans allow colleges to convert interest-free plans into interest-bearing loans. Additionally, borrowers under these plans may face intrusive forms of debt collection, and some plans require waivers of consumer rights. [Extracted from the article]

Affirm Holdings, Inc., a major buy now, pay later (BNPL) provider, has stated in a regulatory filing that it expects to come under the supervision of the Consumer Financial Protection Bureau (CFPB) in the near future. The CFPB has been increasing its scrutiny of the BNPL market, with Director Rohit Chopra leading an inquiry into BNPL practices and releasing several reports and blog posts on the industry. While the CFPB has the authority to supervise certain larger participants in the consumer financial marketplace, it has not yet exercised this authority in the BNPL market. [Extracted from the article]

On August 15, 2023, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra delivered remarks before a White House Roundtable on Protecting Americans from Harmful Data Broker Practices. During his remarks, Director Chopra signaled that the CFPB plans to move forward with a rulemaking that would clarify the application of the Fair Credit Reporting Act ("FCRA") to data brokers. [Extracted from the article]

The senators call on the CFPB to "review the risks posed by this new technology as soon as practicable and take action under the CFPB's existing authorities to protect consumers". On July 6, 2023, Democratic Senators Sherrod Brown, Bob Menendez, Jack Reed, and Tina Smith issued a letter to CFPB Director Rohit Chopra regarding the emergence of artificial-intelligence-powered voice cloning technology and its potential use in financial scams. [Extracted from the article]

The Report highlighted the Bureau's lone fair lending enforcement action in 2022; described an unspecified number of pending fair lending enforcement investigations in the areas of student lending, payday lending, credit cards, small business lending, and mortgage lending; and noted that the Bureau made five fair lending enforcement referrals to the Justice Department throughout the year. On June 29, 2023, the CFPB issued its Fair Lending Annual Report to Congress, which described the Bureau's fair lending activities throughout 2022. [Extracted from the article]

The jury initially declined to award damages to two plaintiffs in the case because they released claims against the defendants in a loan modification agreement. On appeal, the defendants argued that the plaintiffs' ECOA claims fell outside of the applicable statute of limitations, that the trial court provided erroneous jury instructions, and that the two plaintiffs originally denied damages should be subject to the loan modification release. [Extracted from the article]

In the Report, the Bureau describes significant rules and orders, analyzes trends from its consumer complaint database, lists public supervisory and enforcement actions, assesses significant actions by state authorities relating to federal consumer financial law, describes the Bureau's fair lending efforts, analyzes Bureau workforce and contracting diversity, and provides an overview of the Bureau's budget. On June 8, 2023, the CFPB issued its Semi-Annual Report to Congress covering Bureau activities for the period beginning April 1, 2022, and ending September 30, 2022. [Extracted from the article]

In response, the Bureau held a second hearing, in which a properly appointed administrative law judge again ruled in favor of the Bureau based on a review of the record of the initial proceeding. On June 12, 2023, the U.S. Supreme Court denied a petition for certiorari in Integrity Advance, LLC et al. v. CFPB. [Extracted from the article]

The Agenda also states that the Bureau is contemplating new rules surrounding insufficient funds fees and overdraft fees as well as amendments to the regulations implementing the Fair Credit Reporting Act. The Bureau has issued its Spring 2023 Rulemaking Agenda, which covers rulemakings the Bureau expects to enter the pre-rule, proposed rule, and final rule stages during the period from June 1, 2023, through May 31, 2024. [Extracted from the article]

A group of Democratic members of Congress have written a letter to the Director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, urging the Bureau to issue a rule that would limit consumer arbitration clauses. The letter acknowledges that Congress has the authority to restrict these clauses, but argues that the CFPB is better positioned to take action in this area. It also highlights that Congress previously overturned a 2017 Bureau arbitration rule, but asserts that the Bureau still has the authority to regulate arbitration and can issue a new rule that does not violate the prohibition. [Extracted from the article]

The article discusses the approval of a Trial Disclosure Program Waiver Template by the Consumer Financial Protection Bureau (CFPB). The template was proposed by the Independent Community Bankers of America and aims to make improvements to the Loan Estimate and Closing Disclosure for construction or construction-to-permanent loans. The approval allows for deviations from the standard TRID Rule disclosures in these specific loan contexts. The article provides insights from various editors in the field of business regulation and regulated industries. [Extracted from the article]

The House of Representatives has passed a joint resolution aimed at repealing a recent rule by the Consumer Financial Protection Bureau (CFPB) regarding the collection of data on credit applications by women-owned, minority-owned, and small businesses. The resolution, which has already passed in the Senate, would repeal the rule and prevent the Bureau from implementing a similar rule in the future. However, President Biden is expected to veto the resolution, and it is unlikely that there are enough votes to override the veto. In the meantime, enforcement of the rule has been halted due to legal challenges. [Extracted from the article]

On December 12, 2022, the CFPB promulgated a proposed rule aimed at nonbank entities subject to federal, state, and local consumer financial protection law enforcement orders. The proposal would also impose an attestation requirement for certain larger nonbanks subject to the Bureau's supervisory authority. [Extracted from the article]

The Court also rejected arguments from Aria surrounding the deceptiveness of his solicitations and the calculation of restitution and penalties. On December 13, 2022, the U.S. Court of Appeals for the Ninth Circuit handed down a decision in CFPB v. Aria, et al., siding with the CFPB in a dispute with a student aid company and its CEO. [Extracted from the article]

The Semi-Annual Report, which covers the Bureau's activities from October 1, 2021, through March 31, 2022, discusses its significant rules and orders, complaints about consumer financial products or services, public supervisory and enforcement actions by the Bureau, significant actions by state regulators relating to federal consumer financial law, the Bureau's efforts to fulfill its fair lending mission, diversity in the Bureau's workforce, and the agency's budget. On December 14 and 15, 2022, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra testified before the U.S. House Financial Services Committee and the Senate Banking Committee regarding the Bureau's Semi-Annual Report to Congress. [Extracted from the article]

Month-In-Brief:Business Regulation & Regulated IndustriesConsumer Finance Law On September 14, the CFPB published updated frequently asked questions regarding its section 1071 rule. The updated FAQs cover topics that include the treatment of refinanced loans and agricultural-purpose credit loans under the rule, the exclusion of consumer-designated credit from the rule's scope, and the rule's coverage of merchant cash advances.By Eric Mogilnicki and B. Graves LeeEdited By Lynette Hotchkiss, Editor-in-Chief, Business Regulation & Regulated Industries, Nashville, TN. [Extracted from the article]

The Consumer Financial Protection Bureau (CFPB) has updated its page on compliance with the Real Estate Settlement Procedures Act (RESPA) to include a "non-exhaustive list" of regulations and guidance issued by the U.S. Department of Housing and Urban Development (HUD) that the Bureau applies in its current activities. This list includes HUD policy statements and an interpretive rule that the CFPB still considers to be applicable. The CFPB gained authority under RESPA in 2011 and continues to apply documents issued by other agencies relating to RESPA. [Extracted from the article]

In a June 13, 2023, interview with Fox News, CFPB Director Rohit Chopra discussed banks' use of artificial-intelligence-based chatbots in customer service contexts. He also cited risks surrounding the protection of consumers' financial data they divulge to chatbots. [Extracted from the article]

In the Republican attorneys general brief, amici argue that the Supreme Court should grant certiorari and affirm the Fifth Circuit's ruling, "apply[ing] its reasoning nationwide." On December 14, 2022, twenty-two Democratic and sixteen Republican state attorneys general filed separate amicus briefs requesting that the U.S. Supreme Court grant cross-petitions for certiorari in CFPB v. Community Financial Services Association of America, Ltd. [Extracted from the article]