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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…
The CFPB issued its second in a series of Requests for Information on January 31, 2018; this one dealing with administrative adjudications. In the associated press release, the Bureau explained that it “is seeking to better understand the benefits and impacts of its use of administrative adjudications, and how its existing process may be improved.” The CFPB is currently issuing a series of RFIs to “ensure the Bureau is fulfilling its proper and appropriate functions…
On January 26, 2018, the CFPB published a Request for Information in the Federal Register regarding the Bureau’s Civil Investigative Demand processes. According to the Bureau’s related press release, the RFI is the first part of Acting Director Mick Mulvaney’s “call for evidence” about the Bureau’s functions. As presaged in the Bureau’s press release, the RFI is designed to “ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers” and to…
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…
On March 17, 2017 the United States District Court for the District of North Dakota granted the motion of Intercept Corporation and its senior executives to dismiss the complaint filed almost a year ago by the CFPB. Intercept is a payment processor that initiates ACH transactions to consumer accounts on behalf of its merchant-customers. This case is one of the few to go forward where the court is confronted with defining the parameters of the…
On Tuesday, September 27, 2016, the CFPB and the California Department of Business Oversight (“DBO”) announced separate enforcement actions against Flurish, Inc., an online lender that does business as “LendUp” in California and two dozen other states. LendUp agreed to pay, collectively, $3.43 million in restitution to consumers and $2.8 million in civil money penalties to the CFPB and California DBO. …
Earlier this month, a year after the House passed a bill to change the structure of the Consumer Financial Protection Bureau (CFPB), Rep. Randy Neugebauer (R-Tex.) again introduced legislation that would modify the structure of the Bureau. The most recent bill, H.R. 1266, would change the CFPB to an independent Financial Product Safety Commission (FPSC) replacing the position of Director of the CFPB with a five-member bipartisan commission appointed by the President, akin to the…