After bouncing from the Texas federal district court to the D.C. federal district court to the Fifth Circuit and back again to the Texas federal district court, the industry lawsuit challenging the CFPB’s credit card late fee rule (Rule) is poised for another round of possible twists and turns in the wake of the U.S.… Continue Reading

The U.S. Supreme Court, in a 7-2 decision, ruled today that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. 

In the Dodd-Frank Act, Congress provided that the CFPB would receive annual funding from the combined earnings of the Federal Reserve System.  Each year, the Federal Reserve Board is directed to transfer to the CFPB an amount determined by the CFPB Director to be reasonably necessary to carry out the CFPB’s authorities, with that amount not to exceed 12% of the Federal Reserve’s total operating expenses as reported in 2009 (approximately $600 million) as adjusted for inflation.  … Continue Reading

Yesterday, the Texas federal district court hearing the industry lawsuit challenging the CFPB’s final credit card late fee rule (Rule) issued the following unusual order:

On March 10, 2024, this Court granted Plaintiffs’ Motion for Preliminary Injunction.  The Court therefore has questions concerning the live causes of actions in this case and what next steps are appropriate to move the case along.… Continue Reading

Last Friday, May 10, the Texas federal district court hearing the lawsuit challenging the CFPB’s final credit card late fee rule (Rule) granted the plaintiffs’ preliminary injunction motion and stayed the Rule.  The Rule was set to become effective tomorrow, May 14.  The district court’s ruling followed the entry of an order by the Fifth Circuit vacating the district court’s order denying the plaintiffs’ motion for expedited consideration of their preliminary injunction motion and remanding the case to the district court with instructions to rule on the plaintiffs’ preliminary injunction motion by May 10.… Continue Reading

On May 9, 2024, the Consumer Financial Protection Bureau (CFPB) and U.S. Department of Transportation (DoT) held a 98-minute joint hearing on airline and credit card rewards programs.  CFPB Deputy Director Zixta Martinez introduced the panel and public commenters.

In his opening remarks, Secretary of Transportation Pete Buttigieg compared frequent flyer and credit card rewards to savings accounts. … Continue Reading

Our special guest is Brian Johnson, Managing Director of Patomak Global Partners and former CFPB Deputy Director.  In November 2023, the CFPB issued a proposed rule to supervise nonbank companies that qualify as larger participants in a market for “general-use digital consumer payment applications.”  In this episode, we first discuss the CFPB’s authority to supervise nonbank entities considered to be “a larger participant of a market for other consumer financial products or services” and  its previous use of that authority. … Continue Reading

CFPB Director Rohit Chopra has released a statement about the proposal issued by the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Federal Housing Finance Agency to address incentive-based compensation arrangements.  The rulemaking is required by Section 956 of the Dodd-Frank Act, which directed the FDIC, OCC, FHA, as well as the Federal Reserve Board, National Credit Union Administration, and U.S.… Continue Reading

In the lawsuit challenging the CFPB’s final credit card late fee rule (Rule), the Fifth Circuit has denied the CFPB’s petition for a panel rehearing to reconsider the panel’s order vacating the district court’s order transferring the case to the U.S. District Court for the District of Columbia and issuing a writ of mandamus directing the district court to reopen the case. … Continue Reading

As part of its junk fees initiative, the CFPB released a new report, “Price Complexity in Laboratory Markets.”  In its press release about the report, the CFPB states that because it “suggests consumers tend to pay more for products that have more complex pricing structures,” the report “has implications for understanding how junk fees impede fair and competitive pricing in markets like auto loans or mortgages, where consumers have to evaluate extended warranties, add-ons, closing costs, and a wide variety of other fees instead of an all-inclusive price.” … Continue Reading