The CFPB warned on July 24, 2024, that confidentiality agreements that employees of a company are required to sign likely violate federal law if those agreements imply that employees could face retaliation from their employer or co-workers if they report what they perceive as unlawful behavior or wrongdoing at the company.… Continue Reading
CFPB Enforcement
CFPB Addresses Repeat Offender Unit
As we recently reported, the CFPB issued its final rule, titled the Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders Final Rule on June 3, 2024. The CFPB touts the registry as something that will help detect and deter repeat offenders of consumer financial protection laws, even though the registration requirements apply to an entity subject to a single consent order and in full compliance with the order.… Continue Reading
CFPB Takes Action Against BloomTech, Inc. for ISAs that Violate TILA, UDAAP, and the FTC’s Holder Rule
On April 17th, the CFPB issued a consent order to a for-profit training school alleging numerous violations of law related to its use if income share agreements (“ISAs”). According to the Bureau, BloomTech, Inc. (“BloomTech”) and the company’s founder and CEO engaged in deceptive and abusive acts or practices, violated the Truth in Lending Act (“TILA”) and Regulation Z, and violated the Federal Trade Commission’s (“FTC”) Holder Rule.… Continue Reading
Third Circuit Holds Securitized Trusts Are Covered Persons Under CFPA
On March 19th, the United States Court of Appeals for the Third Circuit issued an opinion in CFPB v. National Collegiate Master Student Loan Trust et al. (the “Trusts”). The issue before the Third Circuit was whether certain Trusts are “covered persons” subject to the Consumer Financial Protection Act (“CFPA”) and whether the CFPB was required to ratify the underlying action.… Continue Reading
California AG issues warning to state-chartered banks and credit unions on “surprise overdraft” and returned deposit item fees
On February 22, 2024, California Attorney General Rob Bonta issued letters (the “AG Letter”) to California’s 197 state-chartered banks and credit unions warning that overdraft and returned deposited item fees may violate California’s Unfair Competition Law (UCL) and the federal Consumer Financial Protection Act (CFPA). The AG Letter encourages the institutions to review their practices and policies regarding: “(1) surprise overdraft fees, which are assessed even when a consumer cannot reasonably anticipate that a debit or checking transaction will overdraw their account; and (2) returned deposited item fees, which are assessed when a consumer deposits a check that is returned, even when the consumer has no knowledge of or control over the circumstances that caused the check to be returned.”… Continue Reading
CFPB recaps 2023 enforcement activity and highlights plans to expand enforcement capacity in 2024
In a blog post published earlier this week titled “The CFPB’s enforcement work in 2023 and what lies ahead,” the CFPB discussed its 2023 enforcement activity and highlighted its plans to expand its enforcement capacity in 2024.
The CFPB indicated that in 2023, it filed 29 enforcement actions and resolved through final orders 6 previously-filed lawsuits. … Continue Reading
OIG report finds CFPB can enhance certain aspects of its enforcement investigations process
The Office of Inspector General (OIG) for the Federal Reserve Board and CFPB has issued a report on its evaluation of the CFPB’s process for conducting enforcement investigations. OIG concluded that the CFPB can enhance certain aspects of that process as described below.
In its evaluation, OIG focused on the efficiency of the Office of Enforcement’s process for conducting investigations, and reviewed Enforcement’s practices for tracking and monitoring matters. … Continue Reading
CFPB Adjusts Various Penalty Amounts Based on Inflation
The CFPB recently issued a rule to adjust maximum penalty amounts under various statutes that it administers. Included among the adjustments are the amounts for the three tiers of civil money penalties that the CFPB may impose for violations of consumer financial protection laws under the Dodd-Frank Act. Specifically, the Dodd-Frank Act initially provided for the following tiers of civil money penalties:
- For any violation of a law, rule, or final order or condition imposed in writing by the CFPB, a civil money penalty of up to $5,000 for each day during which such violation or failure to pay continues.
CFPB Announces Virtual Meeting in January for Prospective Enforcement Staff Applicants
On October 16 of last year, I reported that Eric Halperin, Enforcement Director of the CFPB, announced that the CFPB intended to substantially increase the number of enforcement staff by 50% and to create a 5th litigation team. He explained:
“These additional resources will enable us to open more investigations, including matters with significant market impact and against large market actors, consistent with the Bureau’s priorities.… Continue Reading
CFPB Suffers Significant Defeat In ECOA Lawsuit Against Townstone Mortgage
As previously reported, in July 2020 the CFPB filed the first ever redlining complaint against a nonbank mortgage company, Townstone Mortgage (Townstone), under the Equal Credit Opportunity Act (ECOA) and Consumer Financial Protection Act (CFPA). The US District Court for the Northern District of Illinois recently granted Townstone’s motion to dismiss the CFPB’s complaint on the grounds that the ECOA applies to applicants and not to prospective applicants. … Continue Reading