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On June 4, the CFPB issued Circular 2024-03 (“Circular”) warning that the use of unlawful or unenforceable terms and conditions in contracts for consumer financial products or services may violate the prohibition on deceptive acts or practices in the Consumer Financial Protection Act. We previously drafted a blog post and Law360 article about this circular.… Continue Reading

Rep. Andy Ogles, R-Tenn., on August 30, 2024 introduced in the House of Representatives a resolution under the Congressional Review Act (CRA) that would nullify the CFPB’s final nonbank registry rule.

The rule, issued in June, will require certain nonbank entities to register certain covered enforcement or court orders.  Additionally, CFPB-supervised covered nonbanks must comply with ongoing attestation reporting requirements on their compliance with such orders.… Continue Reading

On August 28, 2024, the CFPB issued a consumer advisory warning that many video games and “virtual worlds” increasingly resemble traditional banking and payment systems that allow the storage and exchange of billions of dollars in assets, including virtual currencies.

The advisory emphasizes that these “non-traditional” markets have many of the risks associated with real-world transactions, as well as their own unique risks, but without gaming companies providing protection against such risks.… Continue Reading

In a tentative win for the CFPB, a federal judge in Texas ruled on August 26, 2024, that the agency did not exceed its authority when it issued its final Section 1071 small business lending rule.  The court also rejected other Administrative Procedure Act (APA) challenges to the rule.  However, the court did not issue a final judgment, as it still has to rule on the motion of certain intervenors to amend their complaint to add a claim focused on the legality of the CFPB being funded by the Federal Reserve Board, when since September, 2022, the combined earnings of the Federal Reserve System has been negative.… Continue Reading

The National Consumer Law Center is asking the CFPB, by way of a petition, for rulemaking that is long on policy arguments but woefully short on legal support, as we note below, to define residential leases as “credit” under the Equal Credit Opportunity Act (ECOA) and landlords as “creditors” for two purposes.… Continue Reading

On August 7, 2024, the CFPB published an Issue Spotlight on the solar lending industry. In conjunction with the CFPB’s Issue Spotlight, the CFPB, U.S. Department of Treasury, and the Federal Trade Commission also issued a Consumer Advisory in connection with solar energy sales. All of this comes on the heels of states increasing scrutiny of solar sales practices.… Continue Reading

The CFPB and Credit Repair Cloud, have reached agreement over allegations that the firm helped other credit repair businesses charge illegal fees to consumers.

If approved by a federal judge in the Central District of California, the company would pay a $1 million penalty and its CEO, Daniel A. Rosen would pay a $2 million civil penalty.… Continue Reading

We recently reported that on August 15, 2024 Solo Funding, Inc. (“Solo”) filed a motion to dismiss in its entirety an enforcement complaint brought by the CFPB against Solo (a company that facilitates peer-to-peer small dollar lending) in Federal District Court for the Central District of California (Los Angeles). The motion to dismiss was predicated in part on Solo’s argument that since September, 2022, the CFPB has been unlawfully funded by the Federal Reserve Board because the Federal Reserve System incurred losses starting then.… Continue Reading

On July 30, 2024, Heights Finance Holding Co. f/k/a Southern Management Corporation and a group of its wholly-owned, state-licensed subsidiaries (collectively, “Southern”) filed a motion for judgment on the pleadings (the “JOP Motion”) in the lawsuit filed by the CFPB against Southern in South Carolina federal district court. That lawsuit alleges that Southern violated the Consumer Financial Protection Act’s (“CFPA’s) prohibition on UDAAPs by “churning payment-stressed borrowers in fee-laden refinances.”… Continue Reading

Many financial services providers would be required to allow consumers seeking assistance to be connected to a “real person” by clicking on one button, under a new Biden Administration “Time is Money” initiative.

“Companies often deliberately design their business processes to be time-consuming or otherwise burdensome for consumers, in order to deter them from getting a rebate or refund they are due or canceling a subscription or membership they no longer want—all with the goal of maximizing profits,” the administration said in a fact sheet.… Continue Reading