Kristen E. Larson

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On September 17, 2024, the CFPB issued Consumer Financial Protection Circular 2024-05 on improper overdraft practices. The circular reminded financial institutions of their obligation to retain records that prove the consumer consented to the institution’s payment of ATM and one-time debit card transactions.

The Electronic Funds Transfer Act (EFTA) and Regulation E (12 CFR § 1005.17(b)(1)), prohibit financial institutions from charging an overdraft fee for paying ATM or one-time debit card transactions (“regulated overdrafts”) unless an institution: (i) provides the consumer with its overdraft service disclosure (a/k/a What You Need to Know About Overdraft and Overdraft Fees); (ii) provides the consumer a reasonable opportunity to opt in; (iii) obtains the consumer’s affirmative consent, or opt-in; and (iv) provides the consumer with a written confirmation of the consent, which includes a statement informing the consumer of the right to revoke such consent.… Continue Reading

Innovation and technology are not the magic wands that will help low-income Americans climb out of debt; they often are tools used to prey on the neediest people, Seth Frotman, the CFPB’s general counsel told the Poverty Law Conference earlier this month.

“We hear a lot about ‘innovation’ and ‘financial technology’ in the consumer financial marketplace,” Frotman said, adding that it is not uncommon for such businesses to boast about how they serve an underprivileged population.… Continue Reading

Some dollar  store chains and other retailers now are charging consumers for obtaining cash back on debt or prepaid card purchases—transactions that generally have been free in the past–the CFPB reported.

Obtaining cash back on such purchases may be particularly important in banking deserts and in areas where financial institutions charge significant fees, the bureau said.… Continue Reading

On August 22, 2024, the CFPB filed its reply brief in support of its motion to dissolve the preliminary injunction and lift the stay of the CFPB’s credit card late fee final rule (“Rule”) in the lawsuit challenging the Rule.

On May 10, 2024, in issuing the preliminary injunction, Judge Pittman found that the plaintiffs had established a likelihood of success on the merits based solely on the Fifth Circuit’s decision in CFSA v.… Continue Reading

On August 19, 2024, the CFPB filed its reply brief in support of the CFPB’s motion to dismiss Plaintiff Fort Worth Chamber of Commerce (Fort Worth Chamber) for lack of standing and, if granted, transfer the case to the Federal District Court for D.C. in the lawsuit challenging the CFPB’s credit card late fee final rule (“Rule”).… Continue Reading

On August 15, 2024, the Illinois Bankers Association, American Bankers Association, America’s Credit Unions, and Illinois Credit Union League filed a complaint for declaratory and injunctive relief against the Illinois Attorney General challenging the enactment of the Interchange Fee Prohibition Act (the “IFPA”). The 74 page complaint seeks a declaratory judgment that the IFPA is preempted by federal laws, unconstitutional, and invalid as applied to any participant in the payment system, and to permanently enjoin the state from taking any investigatory or enforcement actions under the IFPA.… Continue Reading

On August 12, 2024, the plaintiffs filed their brief in opposition to the CFPB’s motion to dismiss Plaintiff Fort Worth Chamber of Commerce (Fort Worth Chamber) for lack of standing and if granted, transfer the case to the Federal District Court for D.C. in the lawsuit challenging the CFPB’s credit card late fee final rule (“Rule”).… Continue Reading

On August 8, 2024, the plaintiffs filed their brief in opposition to the CFPB’s motion to dissolve the preliminary injunction in the lawsuit challenging the CFPB’s credit card late fee final rule (“Rule”). In their brief, the plaintiffs renew their arguments that the CFPB exceeded its authority under Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and the Truth in Lending Act (TILA) in promulgating the Rule.… Continue Reading

On August 2, 2024, the CFPB, the OCC, the Federal Reserve Board, the FDIC, the NCUA, the FHFA, the CFTC, the SEC and the Treasury Department proposed a joint rule intended to establish standards to promote the ability of each of the agencies to exchange and use the data that the other agencies collect (referred to as the “interoperability” of financial data across the agencies).… Continue Reading

On July 29, 2024, the CFPB filed a motion to dismiss the Fort Worth Chamber of Commerce as a Plaintiff for lack of standing and if granted, transfer the case to a the Federal District Court for D.C. In its brief, the CFPB argues that the Fort Worth Chamber of Commerce cannot satisfy the test for associational standing and once Fort Worth Chamber of Commerce is dismissed, the remaining plaintiffs cannot establish that venue is proper in the Fort Worth Division of the Northern District of Texas.… Continue Reading