CFPB, Federal Agencies, State Agencies, and Attorneys General
In September 2023, the CFPB updated its UDAAP Examination Manual to remove the changes it made in March 2022 which provided that unfair acts or practices encompassed discriminatory conduct, even in circumstances to which federal fair lending laws, such as the Equal Credit Opportunity Act, did not apply.
It has been suggested that this update means the CFPB has retreated from its position that discriminatory conduct can be the basis of a UDAAP violation. … Continue Reading
The CFPB recently issued a policy statement in which it provided a framework for determining what constitutes abusive conduct under the CFPA. After reviewing the definition of abusive in the CFPA and the historical background of the adoption of an abusive standard in the CFPA, we examine how the policy statement addresses each element of the abusive standard and share our observations as to the policy statement’s implications. … Continue Reading
On November 6, the CFPB filed a notice with the Texas federal district court that it is appealing to the Fifth Circuit the district court’s order granting summary judgment to a group of trade associations in their lawsuit against the CFPB challenging the changes made to its UDAAP Exam Manual in March 2022. … Continue Reading
In March 2022, the Consumer Financial Protection Bureau announced that it had revised its examination manual to instruct its examiners to apply the “unfairness” standard under the Consumer Financial Protection Act to conduct considered to be discriminatory, whether or not it is covered by the Equal Credit Opportunity Act. We first review the changes that the CFPB made to the manual, its rationale for the changes, and how those changes would allow the CFPB to target discrimination more broadly than the circumstances covered by the ECOA. … Continue Reading
Our special guest is Andrew Nigrinis, PhD, who formerly served as Enforcement Economist for the Consumer Financial Protection Bureau. We first discuss what is meant by “dark patterns” and the types of digital practices identified by the CFPB and Federal Trade Commission as “dark patterns.” We then look at the CFPB ‘s position regarding the use of “dark patterns” as an unfair, deceptive, or abusive act or practice under the Consumer Financial Protection Act, the FTC’s position regarding the use of “dark patterns” as anticompetitive and/or a violation of the FTC Act prohibition of unfair or deceptive acts or practices, and the relationship between “dark patterns” and behavioral economics. … Continue Reading
On October 1, 2023 the California Department of Financial Protection and Innovation’s (“DFPI”) final regulations impacting those who provide commercial financial products and services will become effective. The regulations implement the California Consumer Financial Protection Law’s (“CCFPL”) prohibition on engaging in unfair, deceptive or abusive practices (“UDAAP”) in connection with the offering or provision of certain commercial financial products and services.… Continue Reading
The U.S. Chamber of Commerce, joined by six other trade groups, filed a lawsuit on September 28, 2022 in a Texas federal district court against the CFPB challenging the CFPB’s recent update to the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) section of its examination manual to include discrimination. The other plaintiffs are American Bankers Association, Consumer Bankers Association, Independent Bankers Association of Texas, Longview Chamber of Commerce, Texas Association of Business, and Texas Bankers Association.… Continue Reading
After discussing what are “dark patterns” and the most common forms they can take, we consider whether and how “dark patterns” used to influence consumers’ online behavior differ from traditional scams directed at consumers involving the use of deception. We then discuss the federal and state statutes and common law claims currently being used to challenge the use of “dark patterns” as well as current legislative action to more directly target “dark patterns” and the challenges lawmakers face in crafting new legislation. … Continue Reading
Asserting that irreparable harms to their members “are piling up,” the U.S. Chamber of Commerce and the other plaintiffs have filed a motion for a status conference with the Texas federal district court hearing their lawsuit challenging the CFPB’s update to the Unfair, Deceptive, or Abusive Acts or Practices section of its examination manual to include discrimination. … Continue Reading
Last week, the FTC filed a civil case against Amazon alleging that the company used “dark patterns” to enroll people in its Prime program. The case continues a pattern initiated by FTC Chair Lina Khan of challenging web-based marketing tactics of consumer-facing businesses as deceptive and anticompetitive on the grounds that they impede consumer choice and can be used by dominant firms as a tactic to exclude competitors. … Continue Reading
