The CFPB recently posted on its website a final rule regarding various annual adjustments it is required to make under provisions of Regulation Z (TILA) that implement the CARD Act, HOEPA, and the ability to repay/qualified mortgage provisions of Dodd-Frank. The adjustments reflect changes in the Consumer Price Index (CPI) in effect on June 1, 2023 and will take effect January 1, 2024.… Continue Reading
California Reconsidering the “Digital Financial Assets Law”
As readers may recall, California previously attempted to enact a “Digital Financial Assets Law” with the introduction of AB 2269 in February 2022. In relevant part, AB 2269 proposed (1) a stringent licensing requirement for entities engaging in or holding themselves out as being able to engage in “digital financial business activity” with or on behalf of California residents and (2) substantial ongoing reporting and operational obligations, both of which California modeled after New York’s “BitLicense” requirements for virtual currency businesses.… Continue Reading
U.S. Senate Committee on Banking, Housing, and Urban Affairs to hold hearing on “Artificial Intelligence in Financial Services,” Wednesday, September 20th at 10:00AM
This Wednesday, September 20th at 10:00AM ET, the U.S. Senate Committee on Banking, Housing, and Urban Affairs is scheduled to hold a hearing on “Artificial Intelligence in Financial Services.” Currently scheduled to speak are: Ms. Melissa Koide, Director and CEO, FinRegLab, former Deputy Assistant Secretary for Consumer Policy, U.S. Department of the Treasury; Mr.… Continue Reading
Seventh Circuit Holds FTC Act Does not Allow Disgorgement to U.S. Treasury
In FTC v. Credit Bureau Center, LLC, the Seventh Circuit recently held that Section 19 of the Federal Trade Commission Act does not allow the FTC to deposit excess funds awarded as restitution under Section 19 in the U.S. Treasury as disgorgement.
In the underlying action, the FTC alleged Credit Bureau Center, LLC (“CBC”) used “negative option features” on its websites which offered visitors a free credit report but automatically enrolled them in a $29.94 monthly membership subscription.… Continue Reading
CFPB reacts quickly and favorably to Petition submitted to it by consumer groups to ban pre-dispute arbitration
Last week, a group of consumer advocate organizations filed a Petition for Rulemaking with the CFPB that would prohibit the use of pre-dispute arbitration clauses in consumer contracts in favor of arbitration clauses that would permit consumers to choose between arbitration and litigation only after a dispute has arisen. We published a blog last Friday in which we enumerated the many flaws in the Petition and urged the CFPB to reject it.… Continue Reading
Kentucky Federal District Court Issues Order Enjoining the CFPB From Enforcing the Small Business Data Collection Rule as to All Companies Affected by the Rule
On September 14th, the Federal District Court for the Eastern District of Kentucky granted the plaintiff’s motion to preliminarily enjoin the CFPB from implementing the Small Business Lending Rule (“Rule”) promulgated under section 1071 of the Consumer Financial Protection Act. As a reminder, the plaintiffs in the Kentucky lawsuit are the Kentucky Bankers Association and several Kentucky banks.… Continue Reading
Consumer Advocates Petition CFPB to Undertake Rulemaking to Prohibit “Pre-dispute” Consumer Arbitration Clauses
Earlier this week, a group of consumer advocate organizations filed a Petition for Rulemaking with the CFPB that would prohibit the use of pre-dispute arbitration clauses in consumer contracts in favor of arbitration clauses that would permit consumers to choose between arbitration and litigation only after a dispute has arisen. There are numerous compelling reasons why the CFPB should not engage in such rulemaking.… Continue Reading
“Pig Butchering”: FinCEN Issues Alert on Virtual Currency Scam
On September 8, 2023, the Financial Crimes Enforcement Network (“FinCEN”) released an alert regarding a notorious virtual currency scam called “pig butchering,” because, unfortunately, it resembles the “fattening a hog before slaughter.” These scams are primarily perpetrated by criminal organizations in Southeast Asia where these scams are also called “Sha Zhu Pan.”… Continue Reading
CFPB Director Rohit Chopra Addresses Mortgage Post-Crisis Reforms and Importance of Consumer Protection Regulations
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra recently addressed The Mortgage Collaborative National Conference recounting the Congressional response to the mortgage industry crisis that began in 2008 that resulted in the creation of the CFPB. Mr. Chopra emphasized that challenges to the validity and authority of the CFPB could hurt the stability of the U.S.… Continue Reading
FTC Settles With Background Report Companies for FCRA Violations and Deceptive Acts
The Federal Trade Commission (“FTC”) on September 11, 2023, settled a claim against a group of affiliated entities operating a background reporting business, Instant Checkmate, LLC, TruthFinder, LLC, The Control Group Media Company, LLC, Intelicare Direct, LLC, and PubRec LLC (“background report companies” or “companies”) for alleged misrepresentations that deceived consumers about whether they had criminal records and for operating as a consumer reporting agency without following the requirements of the Fair Credit Reporting Act (“FCRA”).… Continue Reading