For the second time in a month, the Consumer Financial Protection Bureau (CFPB) has proposed a new rule that would require businesses to report already public information and thereby increase the burdens on, and risks to, the nonbank financial services industry, which may ultimately increase costs to consumers or slow the proliferation of new products that benefit consumers.
LATEST REGULATORY DEVELOPMENTS IMPACTING
THE FINANCIAL SERVICES INDUSTRY
THE FINANCIAL SERVICES INDUSTRY
The Consumer Financial Protection Bureau (CFPB or Bureau) recently released its Spring Supervisory Highlights summarizing findings from supervisory exams it conducted between July and December 2021.
Last week’s state attorney general races brought little change on the surface, but change in Washington significantly increases the risk of enforcement and litigation by the states. If it seems counterintuitive, it is. But this Washington changeover heightens the complexity of the relationship between Washington and state capitols.
An August 31 memorandum issued by the Office of Information and Regulatory Affairs (OIRA), an arm of the Office of Management and Budget (OMB) within the Executive Branch, could dramatically change the way agencies handle civil and administrative enforcement proceedings. The memorandum directs covered agencies to provide greater due process to individuals and companies under investigation and reemphasizes the principle that the burden of proof of a violation rests solely with the government. The memorandum was issued to implement the directives contained in Section 6 of Executive Order 13924, Executive Order on Regulatory Relief to Support Economic Recovery (issued May 19, 2020). In relevant part, the executive order directed agency heads to revise agency procedures and practices in light of “the principles of fairness in administrative enforcement and adjudication.”
The Federal Trade Commission (FTC) announced a settled action on April 22 with Canadian company RevenueWire (the Company) and its CEO to resolve allegations that the Company assisted and facilitated two tech-support scams that the FTC had previously targeted. Under the alleged scheme, consumers were marketed tech support services to “fix” nonexistent computer problems, leading to hundreds of millions of dollars of consumer injury.
The Great Schism at the Consumer Financial Protection Bureau (CFPB) is over, at least for now, and White House Office of Management and Budget Director Mick Mulvaney is now firmly in control of the agency as its acting director, having been appointed pursuant to the president’s authority under the Federal Vacancies Reform Act.
Acting Federal Trade Commission (FTC) Chairman Maureen Ohlhausen has released a list of changes to how the agency’s Bureau of Consumer Protection (BCP) will issue civil investigative demands (CIDs)—the principal consumer protection investigative tool the agency wields.
One of President Donald Trump’s early official acts in February 2017 was to sign an executive order stating a series of “Core Principles” for the regulation of the US financial system and directing the secretary of the Treasury to report, in consultation with the members of the Financial Stability Oversight Council, on the extent to which existing laws, regulations, and other regulatory requirements promote the Core Principles.
In a concise panel ruling (CFPB vs. Accrediting Council for Independent Colleges and Schools) that no doubt stings for the Consumer Financial Protection Bureau (CFPB), the US Court of Appeals for the DC Circuit has held that the CFPB failed to provide adequate notice of the purpose of a civil investigative demand (CID) it issued to an accrediting group for for-profit colleges, and has accordingly declined to enforce the CID.
Pushing the limits of its already broad and undefined consumer protection authority, the Consumer Financial Protection Bureau (CFPB) issued a Consent Order stating that MasterCard and UniRush, a prepaid card issuer, have engaged in “unfair acts or practices” by failing to conduct adequate testing and preparation for the conversion of UniRush’s RushCard prepaid card onto the Mastercard Payment Transaction Services (MPTS) platform.