CFPB

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The CFPB has filed a Statement of Interest in a case pending before a Florida federal district court in which the plaintiffs allege that the defendant engaged in discriminatory targeting in violation of the Equal Credit Opportunity Act (ECOA).

In Roberson v. Health Career Institute LLC, the plaintiffs are students at a for-profit nursing school who allege that the school engaged in various unfair and deceptive practices and other unlawful conduct in connection with enrolling students in and operating its “functionally valueless” nursing program. … Continue Reading

On April 26, 2023, the CFPB will hold a field hearing in Brooklyn, New York on “zombie second mortgages.”  At the event, Director Chopra will host a discussion with local community organizations, advocates, leaders, and members of the public about such mortgages and debt collection issues.  The CFPB describes “zombie second mortgages” as “debts that consumers thought were satisfied long ago by loan modifications or bankruptcy proceedings or that were written off by lenders as uncollectable.”… Continue Reading

On April 5, 2023, the Consumer Financial Protection Bureau (CFPB) brought an action against James R. Carnes and Melissa C. Carnes, both individually and as co-trustees of the James R. Carnes Revocable Trust and the Melissa C. Carnes Revocable Trust, for allegedly hiding money through a series of fraudulent transfers in order to avoid paying more than $40 million in restitution and penalties for illegal payday lending activities. … Continue Reading

The CFPB has issued its “Consumer Response Annual Report,” which analyzes patterns and trends in the approximately 1,287,000 consumer complaints submitted to the Bureau in 2022.  The annual report is required by the Consumer Financial Protection Act.  

The CFPB indicated that the largest increase in complaints, accounting for more than 75% of all consumer complaints, was related to dissatisfaction with credit reporting, including inaccurate information on credit reports and improper use of reports. … Continue Reading

On April 11, 2023, Consumer Financial Protection Bureau Director Rohit Chopra spoke with the Washington Post regarding the banking industry after the failure of Silicon Valley Bank. Director Chopra, who is also a board member of the Federal Deposit Insurance Corporation, focused his messaging on the need to better educate consumers regarding when their deposits are and are not insured by the FDIC. … Continue Reading

In the CFPB’s second attempt to define “abusive” acts or practices, the first being guidance rescinded a year after it was given in 2020, the CFPB has issued a new policy statement in which it turns to statutory analysis and past enforcement actions to provide a framework for determining what constitutes abusive conduct. … Continue Reading

The CFPB and FTC have targeted the use of “dark patterns” on websites to influence consumer behavior.  We first discuss what regulators consider to be dark patterns and why they are a focus of  regulatory concern and look at examples.  We then discuss the empirical issues and behavioral theories a company should expect regulators to raise if it is the target of a dark patterns investigation or enforcement action, what proactive steps a company can take to reduce the risk of a dark patterns challenge and the role of A/B testing, the practices most likely to be the focus of future dark pattern challenges by regulators, and principles to consider when designing online interactions with consumers so as to avoid potential dark patterns.… Continue Reading

The CFPB has filed a Notice of Appeal with the U.S. Court of Appeals for the Seventh Circuit from the district court’s decision in the CFPB’s enforcement action against Townstone Mortgage (Townstone).  In the case, the district court ruled that a redlining claim may not be brought under the Equal Credit Opportunity Act (ECOA) because the statute only applies to applicants.… Continue Reading

Many people have asked me if the Second Circuit’s opinion in CFPB v. Law Offices of Crystal Moroney, which held that the CFPB’s funding does not violate the Appropriations Clause, changes my mind about how the Supreme Court will rule in CFSA v. CFPB.  It is noteworthy that two of the three judges on the Second Circuit panel were appointed by Republican Presidents, including one appointed by President Trump. … Continue Reading

On March 30, the Consumer Financial Protection Bureau issued its final rule to implement Section 1071 of the Dodd-Frank Act.  Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses. … Continue Reading