On June 5, 2017, the U.S. Supreme Court handed down a unanimous decision in Kokesh v. SEC. In Kokesh, the SEC took the position that disgorgement was not a penalty and therefore not subject to the statute of limitations in 28 U.S.C. § 2462. The Court held that disgorgement remedies are indeed “penalties” and therefore  subject to the five-year statute of limitations in § 2462. In its PHH briefing, the CFPB argued that “[its] administrative proceedings are subject only to the statute of limitations set forth in 28 U.S.C. § 2462.” Thus, the Supreme Court’s reasoning in Kokesh would also apply squarely to the disgorgement remedies available to the CFPB.

The opening paragraph of the Kokesh opinion says it all.

“A 5-year statute of limitations applies to any ‘action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise.’ 28 U.S.C. § 2462. This case presents the question of whether § 2462 applies to claims for disgorgement imposed as a sanction for violating a federal securities law. The Court holds that it does. Disgorgement in the securities-enforcement context is a ‘penalty’ within the meaning of § 2462, and so disgorgement actions must be commenced within the five years of the date the claim accrues.”

The Court rested its decision on the principle that “[s]uch limits are ‘vital to the welfare of society’ and rest on the principle that ‘even wrongdoers are entitled to assume that their sins may be forgotten.'” The CFPB has argued that, except for the statute of limitations in § 2462, no statute of limitations applies to claims it brings through administrative enforcement actions. This argument was brought to the fore by the PHH case, which we have blogged about extensively. The CFPB lost on that issue in the PHH case before a three-judge panel of the D.C. Circuit. The panel’s decision was vacated when the D.C. Circuit decided to re-hear the case en banc. We are still waiting to see what the en banc court will do.

In addition to its implications for CFPB rulemaking, the D.C. Circuit’s decision in PHH Corporation v. CFPB has significant implications for the CFPB’s authority to enforce federal consumer financial protection laws as well as the Consumer Financial Protection Act (CFPA) prohibition of unfair, deceptive, or abusive acts or practices (UDAAP).

In its decision, the D.C. Circuit ruled not only that the CFPB’s single-director-removable-only-for-cause structure is unconstitutional but also ruled that RESPA’s three-year statute of limitations (SOL) applies to CFPB administrative enforcement actions.  According to the court, when using it authority under Section 5563 of the CFPA to conduct hearings and adjudication proceedings to enforce a federal consumer financial protection law as to which it has enforcement authority, the CFPB is subject to any limits in such law, such as a SOL.  It stated that “[b]y its terms, then, Section 5563 ties the CFPB’s administrative adjudications to the statutes of limitations of the various federal consumer protection laws it is charged with enforcing.”

RESPA’s SOL provides that “actions brought by the Bureau, the Secretary [of HUD], the Attorney General of any State, or the insurance commissioner of any State may be brought within 3 years from the date of the occurrence of the violation.”  Not only did the court reject the CFPB’s argument that RESPA’s SOL did not apply to administrative enforcement actions, it also rejected the CFPB’s argument that by its terms, RESPA’s three-year SOL was limited to court actions.  The court concluded that the reference to “actions” in RESPA’s SOL includes both CFPB RESPA enforcement actions brought administratively and those brought  in court.

The court’s statement that Section 5563 “ties the CFPB’s administrative adjudications to the statutes of limitations of the various federal consumer protection laws it is charged with enforcing” has implications for attempts by the CFPB to avoid the SOLs of federal consumer financial protection laws other than RESPA.  Indeed, the court specifically noted that the CFPB’s argument that it was not bound by RESPA’s SOL “would extend to all 19 of the consumer protection laws that Congress empowered the CFPB to enforce” and cited to the CFPB’s administrative enforcement action against Integrity Advance, LLC in which the CFPB’s Administrative Law Judge (ALJ) found that the CFPB was not bound by the TILA or EFTA SOLs.  The respondents in that case filed a motion to stay their appeal of the ALJ’s decision and for their case to be remanded to the ALJ for reconsideration in light of the D.C. Circuit’s PHH decision.  The motion was denied by Director Cordray who, in an order issued on October 31, 2016, stated that he “was fully able to address [the respondents’] arguments about the appropriate statute of limitations in this appeal” and that he had “extended the briefing schedule sua sponte to ensure that the parties would have a full opportunity to present arguments on the impact (if any) of the D.C. Circuit’s decision in PHH v. CFPB.”

In addition to the ALJ’s finding in Integrity Advance that the CFPB was not bound by the TILA and EFTA SOLs, the ALJ found that the three-year SOL in Section 5564(g)(1) for actions to enforce the CFPA did not apply to the CFPB’s UDAAP claims. Section 5564(g)(1) provides that “[e]xcept as otherwise permitted by law or equity, no action may be brought under this title more than 3 years after the date of discovery of the violation to which an action relates.”  In rejecting the CFPB’s reading of “actions” in RESPA’s SOL, the D.C. Circuit observed that “[t]he Dodd-Frank Act repeatedly uses the term “action” to encompass court actions and administrative proceedings” and cited to various Dodd-Frank sections as examples.  Assuming the term “action” in Section 5564(g)(1) would similarly be read to encompass court actions and administrative proceedings, the CFPB would be bound by the provision’s three-year SOL, including its discovery rule, when bringing administrative actions to enforce its UDAAP authority.

The implications of the SOL issues for the CFPB’s exercise of its enforcement authority could include the fast-tracking of enforcement matters and greater use of its UDAAP authority for conduct that violates a federal consumer financial protection law with a SOL that is less than 3 years.  We will be watching to see how Director Cordray addresses the respondent’s TILA, EFTA and UDAAP SOL arguments when he rules on Integrity Advance’s appeal.

 

The CFPB announced that, jointly with the New York Attorney General, it has filed a lawsuit in a New York federal court against three companies that purchased consumer debts and two of the companies’ individual principals alleging that the defendants engaged in a “massive illegal debt-collection scheme.”

The complaint alleges that the defendants’ conduct violated the FDCPA, the UDAAP prohibition of the Consumer Financial Protection Act, and various New York laws, including New York’s debt collection and UDAP laws.  The FDCPA and NY state law claims are asserted by only, respectively, the CFPB and NY AG, while the UDAAP claims are asserted by both the CFPB and NY AG.  Under CFPA Section 1042, a state AG is authorized to bring a civil action for a violation of the CFPA UDAAP prohibition. While Section 1042 is not cited in the complaint, presumably the UDAAP claims rely on Section 1042 for the NY AG’s authority.  Although the NY Department of Financial Services has previously relied on Section 1042 to file a lawsuit alleging UDAAP violations, this is the first time we are aware of that the NY AG has relied on Section 1042 to assert UDAAP claims in court.  Several other state AGs have also used Section 1042 to assert UDAAP claims.

Each of the claims alleged in the complaint are asserted against one or more of the defendant companies and both individual principals.  The UDAAP claims allege that the individuals are liable for the companies’ UDAAP violations because they knew or should have known of the companies’ alleged illegal practices.  According to the complaint, the individuals directed the companies’ operations, were aware of a debt seller’s audit that identified illegal practices by the companies, and the companies had received numerous complaints and inquiries from consumers, government agencies and consumer organizations about their collection practices.  With regard to the FDCPA claims, the CFPB alleges that the individuals’ involvement in the companies’ debt collection activities, including their management of staff and approval of the companies’ collection policies and practices, made them “debt collectors” under the FDCPA.

The complaint alleges that the defendants engaged in unlawful conduct that included:

  • Adding $200 to each consumer debt account the companies acquired without regard to whether the addition of such amount was permitted by applicable state law or the underlying contract between the consumer and the original creditor
  • Falsely threatening consumers with legal action they had no intention of taking and impersonating law enforcement officials, government agencies, and court officers, including using call-spoofing technologies to make it appear that collectors were calling from government agencies.

 

On September 15th, the FTC will hold a workshop to examine the testing and evaluation of disclosures that companies make to consumers about advertising claims, privacy practices, and other information.  The FTC’s workshop will explore how to test the effectiveness of these disclosures to ensure consumers notice them, understand them, and can use them in their decision-making.  Companies should incorporate the principles articulated during the workshop by federal regulators such as the FTC and the CFPB into the development of their own consumer disclosures, especially relating to e-commerce and mobile initiatives.

The “Putting Disclosures to the Test” workshop will explore ways to improve the evaluation and testing of consumer disclosures by industry, academics, and the FTC related to:

  • Disclosures in advertising  designed to prevent ads from being deceptive;
  • Privacy-related disclosures, including privacy policies and other mechanisms to inform consumers that they are being tracked; and
  • Disclosures in specific industries designed to prevent deceptive claims.

Among the participants at the workshop will be Heidi Johnson, a research analyst from the CFPB Office of Research, who will present a case study entitled, “Disclosure Research in the Lab and Online.” The CFPB’s Decision Making and Behavioral Studies team is engaged in a strategic initiative to invest in research that explores the factors that influence a disclosure’s efficacy, how to use different methodologies to study disclosure, and the market effects of disclosure. Ms. Johnson’s work as a part of this team has included consumer research on overdraft and other financial products.

On May 11, 2016, the CFPB sued All American Check Cashing, Mid-State Finance and their President and owner Michael E. Gray. It alleged that the Defendants engaged in abusive, deceptive, and unfair conduct in making certain payday loans, failing to refund overpayments on those loans, and cashing consumers’ checks.

The CFPB’s claims are mundane. The most interesting thing about the Complaint is the claim that isn’t there. Defendants allegedly made two-week payday loans to consumers who were paid monthly. They also rolled-over the loans by allowing consumers to take out a new loan to pay off an old one. The Complaint discusses how this practice is prohibited under state law even though it is not germane to the CFPB’s claims (which we discuss below). In its war against tribal lenders, the CFPB has taken the position that certain violations of state law themselves constitute violations of Dodd-Frank’s UDAAP prohibition. Yet the CFPB did not raise a UDAAP claim here based on Defendants’ alleged violation of state law.

This is most likely because of a possible nuance to the CFPB’s position that has not been widely discussed until recently. Jeff Ehrlich, CFPB Deputy Enforcement Director recently discussed this nuance at the PLI Consumer Financial Services Institute in Chicago chaired by Alan Kaplinsky. There, he said that the CFPB only considers state-law violations that render the loans void to constitute violations of Dodd-Frank’s UDAAP prohibitions. The Complaint in the All American Check Cashing case is an example of the CFPB adhering to this policy. Given that the CFPB took a more expansive view of UDAAP in the Cash Call case, it has been unclear how far the CFPB would take its prosecution of state-law violations. This case is one example of the CFPB staying its own hand and adhering to the narrower enforcement of UDAAP that Mr. Ehrlich announced last week.

In the All American Complaint, the CFPB cites an email sent by one of Defendants’ managers. The email contained a cartoon depicting one man pointing a gun at another who was saying “I get paid once a month.” The man with the gun said, “Take the money or die.” This, the CFPB claims, shows how Defendants pressured consumers into taking payday loans they didn’t want. We don’t know whether the email was prepared by a rogue employee who was out of line with company policy. But it nevertheless highlights how important it is for every employee of every company in the CFPB’s jurisdiction to write emails as if CFPB enforcement staff were reading them.

The Complaint also shows how the CFPB uses the testimony of consumers and former employees in its investigations. Several times in the Complaint, the CFPB cites to statements made by consumers and former employees who highlighted alleged problems with Defendants’ business practices. We see this all the time in the many CFPB investigations we handle. That underscores why it is very important for companies within the CFPB’s jurisdiction to be mindful of how they treat consumers and employees. They may be the ones the CFPB relies on for evidence against the subjects of its investigations.

The claims are nothing special and unlikely to significantly impact the state of the law. Although we will keep an eye on how certain defenses that may be available to Defendants play out, as they may be of some interest:

  • The CFPB claims that Defendants abused consumers by actively working to prohibit them from learning how much its check cashing products cost. If that happened, it is certainly a problem. Although, the CFPB acknowledged that Defendants posted signs in its stores disclosing the fees. It will be interesting to see how this impacts the CFPB’s claims. It seems impossible to hide a fact that is posted in plain sight.
  • The CFPB also claims that Defendants deceived consumers, telling them that they could not take their checks elsewhere for cashing without difficulty after they started the process with Defendants. The CFPB claims this was deceptive while at the same time acknowledging that it was true in some cases.
  • Defendants also allegedly deceived consumers by telling them that Defendants’ payday and check cashing services were cheaper than competitors when this was not so according to the CFPB. Whether this is the CFPB making a mountain out of the mole hill of ordinary advertising puffery is yet to be seen.
  • The CFPB claims that Defendants engaged in unfair conduct when it kept consumers’ overpayments on their payday loans and even zeroed-out negative account balances so the overpayments were erased from the system. This last claim, if it is true, will be toughest for Defendants to defend.

Most companies settle claims like this with the CFPB, resulting in a CFPB-drafted consent order and a one-sided view of the facts.  Even though this case involves fairly routine claims, it may nevertheless give the world a rare glimpse into both sides of the issues.

On Thursday, May 11, 2016 in Chicago, I moderated the “CFPB Speaks” panel which was the lead-off panel at the sold-out Practicing Law Institute  21st Annual Consumer Financial Services Institute. The CFPB speakers were:  Jeff Ehrlich, Deputy Assistant Director, Office of Enforcement, Paul Mondor, Managing Counsel, Office of Regulations and Chris Young, Senior Counsel and Chief of Staff, Office of Supervision Policy. My partner, Chris Willis (who is the Practice Group Leader of our firm’s Consumer Financial Services Litigation Group and who has handled a huge volume of CFPB investigations) was one of two industry representatives on the panel.

Jeff Ehrlich attempted to clarify the confusion surrounding the CFPB’s position in the CashCall lawsuit in which the CFPB asserted that longer term installment loans with interest rates that exceed the rate allowed under the law of the state where the borrower resides are also UDAAP violations. Many in the industry read the CashCall complaint as evidence that the CFPB views state usury violations as per se UDAAP violations.

Jeff indicated that the CFPB’s position is that there is a UDAAP violation if a state usury law violation makes a loan void or if state law provides that loans made without a required license are void. If, for example, the state law penalty for violating the state usury law is less draconian (e.g., double the finance charge or overcharge), then the CFPB would not assert that there is also a UDAAP violation.

Jeff’s comments, however, are not fully consistent with the complaint filed by the CFPB against CashCall. Specifically, the complaint asserts that the loans alleged to be UDAAP violations were subject to state laws that “rendered void or limited the consumer’s obligation to repay.” The complaint includes Colorado as a subject state and acknowledges that loans that exceed the usury limit in Colorado and loans originated without a license in Colorado are not void.  Rather, it states that in Colorado, consumers are relieved of the obligation to pay any charge that exceeds the usury limit and are entitled to a refund from the lender or assignee for any excess amount that they paid. It also states that a lender’s or assignee’s failure to obtain a required license removes the consumer’s obligation to pay finance charges to the lender or assignee.

As a result of the inconsistency between Jeff’s statement that there exists a UDAAP violation for a state law violation only when a company seeks to collect a loan that is void under state law and the much broader theory of UDAAP liability in the CashCall complaint itself, confusion continues to exist as to the CFPB’s position on when a state law violation constitutes a UDAAP violation.

The Dodd-Frank Act gave the CFPB authority to regulate “unfair, deceptive, or abusive” acts or practices.  Republican Congressman Blaine Luetkemeyer has introduced the “Unfair or Deceptive Acts or Practices Uniformity Act,” (H.R. 5112), which would remove the CFPB’s authority to regulate abusive acts or practices.

The bill would also prohibit the CFPB from taking any enforcement action to prevent covered persons or service providers from engaging in an unfair or deceptive act or practice (UDAP) unless the CFPB “first consults the covered person or service provider’s primary financial regulatory agency, if any.”  In addition, the bill would require the CFPB, when engaging in UDAP rulemaking, to comply with FTC Act UDAP rulemaking requirements applicable to the FTC.  Those requirements include publishing two notices of proposed rulemaking, meeting a restrictive standard for justifying a new rule, and providing an opportunity for informal hearings.

In his prepared remarks to the Consumer Bankers Association yesterday, Director Cordray attempted to defend the CFPB’s “regulation by enforcement” approach that has been widely criticized by industry.

Director Cordray’s remarks included the surprising acknowledgment that despite indications by his colleagues to the contrary, the reach of CFPB consent orders is not limited to the parties involved.  Rather, Director Cordray indicated that consent orders are intended to have precedential effect for other industry members.  More specifically, he stated that consent orders are “intended as guides to all participants in the marketplace to avoid similar violations and make an immediate effort to correct any such improper practices.”  He called it “compliance malpractice” for companies “not to take careful bearings from the contents of these orders about how to comply with the law and treat consumers fairly.”

Director Cordray asserted that criticism of the CFPB’s approach as “regulation by enforcement” is “badly misplaced.”  He defended the CFPB’s approach as “a thoughtful strategy for how to deploy [the CFPB’s] limited resources most efficiently to protect the public.”  According to Director Cordray, the CFPB’s strategy is one of “working toward a pattern of actions that conveys an intelligible direction to the marketplace, so as to create deterrence that can be readily understood and implemented.”

He also rejected the “suggestion that law enforcement officials should think through and explicitly articulate rules for every eventuality before taking any enforcement actions at all,” stating that such an approach “would lead to paralysis because it simply sets the bar too high.”  According to Director Cordray, “the vast majority of our enforcement actions involve some sort of deception or fraud” and “courts have long noted that trying to craft specific rules to root out fraud or untruth is a hopeless endeavor.”  He observed that because of the impracticality of drafting specific rules, the CFPB strives in consent orders to “meticulously catalogue the facts we have found in our very thorough investigations and set out the legal conclusions that follow from those facts.”

Director Cordray’s comments ignore the reality that consent orders often result from CFPB pressure on targets to settle and, particularly for entities subject to CFPB supervision, a desire to avoid hostile litigation that might damage their ongoing relationship with the CFPB.  (Indeed, consent orders generally state that a company has consented to the order “without admitting or denying any findings of fact, violations of law or regulations” or “without admitting or denying any wrongdoing.”)  Thus, the legal conclusions set forth in a consent order only reflect the CFPB’s unilateral view of the law which a court might reject as incorrect.

Moreover, because they are tied to specific facts, consent orders rarely provide useful guidance for companies with different practices that are seeking to avoid violations.  For example, the CFPB’s enforcement actions against credit card issuers involving the marketing of add-on products (e.g., debt cancellation coverage, identity theft) created tremendous uncertainty among issuers as to the CFPB’s expectations.  This uncertainty caused most card issuers to stop offering these products altogether, a result that is not beneficial to the many consumers who found these products to be very valuable.

In addition, the fact that Dodd-Frank gives gave the CFPB UDAAP rule-writing authority indicates that Congress did not believe drafting rules to address deception or fraud was a “hopeless endeavor.”  Unlike the Administrative Procedure Act (APA) rulemaking process, the use of consent orders to impose industry-wide standards does not allow industry or other stakeholders to provide input nor does it require the CFPB to consider the impact of such standards on an entire industry.

We find it interesting that in defending the CFPB’s use of consent orders to set industry-wide standards, Director Cordray only notes the difficulty in establishing rules “to root out fraud or untruth.”  The CFPB has also entered into consent orders in cases where a company’s practices were alleged to be “unfair” or “abusive.”  For most companies seeking to comply with the CFPB’s expectations, the greatest cause of uncertainty and concern is the absence of clear CFPB guidance for determining whether any of their practices could be deemed “unfair” or “abusive” by the CFPB.

A notable example of the CFPB’s “regulation by enforcement” approach is the series of consent orders it has entered into with auto finance companies to resolve charges that the companies engaged in unlawful discrimination in violation of the ECOA through their auto dealer compensation practices giving dealers discretion to “mark up” interest rates on consumers’ retail installment sale contracts purchased by the companies.  The CFPB’s legal conclusion that such companies violated the ECOA rests on its view that disparate impact claims are cognizable under the ECOA.  Even if a court were to agree with the CFPB’s view, the methodology used by the CFPB to establish disparate impact has been challenged as seriously flawed.  The CFPB’s consent orders in these cases have required the auto finance companies to change their dealer compensation policies so that they conform to the options specified in the consent orders.  The establishment of “rules” for how the entire auto finance industry companies must compensate dealers without using the APA rulemaking process is clearly inappropriate.

 

An attempt by the Pennsylvania Attorney General to use her Dodd-Frank Section 1042 authority recently met with only partial success in Pennsylvania federal district court.  Section 1042 allows state attorneys general and regulators to bring civil actions for violations of Dodd-Frank’s prohibition of unfair, deceptive, or abusive acts or practices (UDAAP).  The AG’s action in Commonwealth of Pennsylvania v. Think Finance, Inc., et al., was brought against several companies and their individual principal for allegedly (1) engaging in “rent-a-bank” and “rent-a-tribe” schemes to market Internet loans, and (2) charging interest rates that were usurious under state law.

In addition to alleging various state law violations, including that the defendants had engaged in “racketeering,” the AG alleged that the defendants had violated the Dodd-Frank UDAAP prohibition by (1) conditioning loans on the borrower’s use of electronic payments in violation of the Electronic Fund Transfer Act (EFTA) prohibition on compulsory use; (2) “inducing consumers to provide highly personal information;” and (3) taking unreasonable advantage of consumers’ lack of understanding.  The AG also claimed that the defendants should be liable for the UDAAP claims under a “common enterprise” theory.

The AG claimed that the defendants had violated the EFTA and engaged in a UDAAP by giving customers “the option of receiving the loan proceeds in their bank account quickly if the consumer agrees to electronic direct deposit and repayment, while conditioning the alternative option of payment by mail on the consumer agreeing to wait as long as a week for the borrowed cash.”  The court ruled that the AG had not stated a claim for a UDAAP claim because the AG “fails to connect the Defendants’ incentivizing electronic payments with a lack of understanding on the part of the consumer.”  The court also observed that it “was difficult” to see how the automatic payment option was itself “unfair or deceptive.”  It noted that the AG had not pled that the option caused injury to consumers and commented that the defendants’ promise to provide loans by direct deposit “as soon as tomorrow” was not itself injurious but was “reflective of the desperation of the consumer prior to engaging with the Defendants.”

The court also found that the AG had failed to state a claim for a UDAAP violation based on the allegation that consumers were induced to provide “highly personal information.”  It agreed with the defendants’ argument that this ground failed because the AG had not indicated how consumers were harmed “beyond a general allegation that it ‘makes them vulnerable to future improper use of that information.'”

The court did, however, find that the AG had stated a claim for a UDAAP violation based on the allegation that the defendants had engaged in an abusive act or practice by taking unreasonable advantage of the consumer’s lack of understanding of material risks.  While agreeing with the defendants that the AG had not shown that the defendants had engaged in abusive conduct by failing to disclose the loan terms, it found that the AG had sufficiently pled abusive conduct by alleging that the defendants took unreasonable advantage of the consumer’s lack of knowledge by “[holding] these loans out to be legal.”

With regard to the AG’s attempted use of a “common enterprise” theory, the AG argued that because the FTC Act prohibits unfair or deceptive acts or practices and the FTC has been allowed to use the “common enterprise” theory in FTC Act enforcement actions, the theory should apply to Dodd-Frank UDAAP claims.  In rejecting that argument, the court distinguished the FTC Act by noting that it can only be enforced by the FTC and does not also prohibit abusive conduct.

While involving loans with triple-digit interest rates, the defendants’ inability to use federal preemption to obtain a dismissal of the AG’s racketeering and other state law claims also makes the decision particularly noteworthy for marketplace lenders that partner with banks to originate loans at much lower rates.  Most significantly, the court’s rejection of preemption demonstrates the need for marketplace lenders to be prepared to defend their bank partnerships against “true lender” challenges by revisiting their partnerships’ structure, documentation, and compliance controls with legal counsel.  For more information about the decision, see our legal alert.

A new FTC report, “Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues,” warns that certain uses of big data consisting of consumer information may implicate various federal consumer protection laws.  In the report, the FTC puts companies on notice that it intends “to monitor areas where big data practices could violate existing laws” and “bring enforcement actions where appropriate.”

The report discusses the potential applicability of the Fair Credit Reporting Act (FCRA), the Equal Credit Opportunity Act (ECOA), and Section 5 of the FTC Act to big data practices (which prohibits unfair or deceptive acts or practices).  The CFPB also has FCRA and ECOA enforcement authority, as well as authority to enforce the Dodd-Frank Act prohibition of unfair, deceptive, or abusive acts or practices.  As a result, companies subject to CFPB jurisdiction face the possibility that the CFPB could also begin using that authority to target big data practices (perhaps using the FTC’s report as a roadmap).  In addition, companies supervised by the CFPB could face scrutiny of their big data practices in CFPB examinations and potential supervisory actions.

In its July 2014 report on the use of remittance histories in credit scores, the CFPB noted that use of remittance histories could have a disproportionately negative impact on certain racial or national origin groups and thereby implicate fair lending concerns.  At the American Bar Association’s Consumer Financial Services Committee meeting in Park City, Utah earlier this week, a CFPB representative commented on the potential discriminatory impact of using big data in credit decisions.  My colleague Joseph Schuster, who attended the meeting, will be blogging about those comments.

For more on the FTC’s report, see our legal alert.  On February 17, 2016, from 12 p.m. to 1 p.m ET, Ballard Spahr attorneys will hold a webinar, “Big Problems with Big Data? FTC Report Warns Against Using Big Data in Ways That Violate Federal Consumer Protection Laws.”  The webinar registration form is available here.