Latest Articles

In its third Request for Information to “ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers,” the Consumer Financial Protection Bureau seeks comments “to help assess the overall efficiency and effectiveness” of its enforcement process. We issued client alerts previously on the CFPB’s outreach and RFI process, the first RFI relating to Civil Investigative Demands, and the second RFI on administrative adjudications. All three of the RFIs seek to address…
On December 13, the Eleventh Circuit Court of Appeals affirmed the decision of the U.S. District Court for the Middle District of Florida finding a credit card payment processor jointly and severally liable, under a theory of aiding and abetting, for the full judgment entered against fraudulent telemarketers. While some courts have rejected efforts by the Consumer Financial Protection Bureau to establish vicarious liability for the acts of payment processors, the decision provides useful guidance…
In another significant litigation setback for the CFPB, a U.S. District Court in Atlanta imposed discovery sanctions against the Bureau and dismissed all claims against payment processors alleged to have aided and abetted an unlawful debt collection scheme. Cases brought by the CFPB’s Division of Enforcement have seen the imposition of significant levels of damages as well as the imposition of severe penalties. More recently, however, some litigants have pushed back with success against the…
As widely anticipated, the Consumer Financial Protection Bureau (CFPB) issued a Notice of Proposed Rulemaking seeking comments on proposed regulations that would: 1) bar class action waivers; and 2) impose reporting requirements for individual arbitrations pursued pursuant to pre-dispute arbitration agreements (“Proposed Rule”). The Proposed Rule is accompanied by over 350 pages of Supplementary Information in which the CFPB makes it case that class action litigation and CFPB monitoring of individual arbitrations are both “in…
In March 2015, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) reauthorized their 2012 Memorandum of Understanding (MOU), extending it for a three-year term with a few small administrative updates. According to the FTC’s blog post, titled Peace, Love, and Understanding, the two agencies plan to continue to coordinate. The MOU covers the following main areas: Law Enforcement. The agencies will protect consumers without unnecessarily burdening businesses by coordinating—and avoiding duplicative—investigations.…
The Equal Credit Opportunity Act (ECOA) forbids discrimination by a creditor on the basis of race, color, religion, national origin, sex, marital status or age. As the Consumer Financial Protection Bureau (CFPB) has acknowledged, particularly in the non-mortgage context, lenders are generally not permitted to collect demographic information about borrowers. But, regulators, including the CFPB, continue to look for potential discrimination—and, more precisely, potential disparate impact liability—in a variety of non-mortgage credit contexts, including indirect…
On September 17, 2014, the CFPB issued a proposed rule which, if adopted, will broaden the CFPB’s enforcement authority to cover non-banks that offer automobile loans to consumers, as long as those non-banks are “larger participants” in the automobile loan market. This would mark the first time that non-bank auto loan companies would be subject to the supervisory regulatory authority of a federal agency. The proposed rule was published in the Federal Register on October…
On September 17, 2014, the CFPB issued a supervisory highlights report concerning discriminatory practices in automobile lending. The report focused on so-called “indirect auto lending” which the CFPB defines as “when a consumer secures vehicle financing through the dealer, which typically originates the loan to the consumer and arranges financing through a third-party financial institution.” The report notes that, as a result of alleged discrimination uncovered during supervisory reviews, unnamed entities have agreed to pay…