The use of enforcement by the Consumer Financial Protection Bureau and other federal agencies rather than administrative rulemaking to advance novel legal theories has been widely criticized. After discussing the meaning of “regulation by enforcement,” we look at examples of the use of regulation by enforcement by the CFPB and other agencies, U.S.… Continue Reading
The Federal Trade Commission has provided its annual report to the CFPB on its enforcement and related activities in 2022 regarding the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA) (collectively, the “Financial Acts”). It also released its 2022 annual report on refunds. … Continue Reading
We discuss the industries and practices that have been the subject of recent FTC enforcement focus, including: marketing, servicing, and collection practices involving small business financing such as merchant cash advances; auto add-on product sales practices; product endorsements and reviews; dark patterns; marketing practices of for-profit schools; lead generation; and COVID-related fraud. … Continue Reading
In remarks given on Tuesday to the National Association of State Attorneys General (NAAG), CFPB Director Chopra promoted an aggressive approach to enforcement by both the CFPB and state attorneys general (AGs).
In his most noteworthy remarks, Director Chopra:
- Identified federal preemption as having played a major role in the 2007-2009 sub-prime mortgage crisis and suggested that the OCC had used preemption “to attack state consumer protection enforcement.”
Joined by two CBA representatives who previously served at the CFPB, we discuss the key arguments advanced in the white paper for why rulemaking and informal written guidance are more effective tools than enforcement for the Bureau to use to create new standards and expectations for industry and to carry out its consumer protection mission. … Continue Reading
The Consumer Bankers Association has released a new white paper, “The Case For Regulation Through Rulemaking & Guidance,” that advocates for the CFPB to use rulemaking and informal written guidance in lieu of attempting to create new industry regulatory standards through enforcement. Attorneys from Ballard Spahr’s Consumer Financial Services Group assisted CBA in preparing the white paper.… Continue Reading
CFPB enforcement activity has already ramped up and the pace is expected to increase with Director Chopra now at the helm. We look at the areas expected to be the focus of intensified enforcement activity, such as military lending, fair lending, and treatment of LEP consumers, and new areas under consideration by CFPB enforcement staff, such as machine learning models, use of alternative data, and fair lending related to servicing and loss mitigation (particularly in light of the end of pandemic-related forbearances). … Continue Reading
The CFPB announced last week that it has entered into a proposed settlement with Driver Loan, LLC (“Driver Loan”) and its Chief Executive Officer to settle the November 2020 lawsuit it filed against Driver Loan and its CEO alleging the defendants engaged in deceptive acts and practices in violation of the Dodd-Frank Act’s UDAAP prohibition in connection with taking deposits from and making loans to consumers.… Continue Reading
We take a close look at the role of the new Office of SEFL Policy and Strategy to be created by the plan and how the plan would change the CFPB’s current enforcement decision-making process. We also look at how the plan aligns with the approach of federal banking regulators, share our reactions to criticism of the plan by Democratic lawmakers and thoughts on the new Office’s expected leadership, and discuss the Presidential election’s potential impact.… Continue Reading
House Financial Services Committee Chairwoman Maxine Waters has sent a letter to CFPB Director Kraninger raising questions about the potential appointment of Thomas G. Ward as CFPB’s Assistant Director for Enforcement.
In her letter, Ms. Waters stated that, according to media reports, Mr. Ward is the leading candidate for the Enforcement Director position and that he currently serves as the Deputy Assistant Attorney General overseeing the torts branch in the Civil Division of the Department of Justice. … Continue Reading