Category Archives: Consumer Financial Protection

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Investing Under the Influence? SEC Issues Warning Letters to Celebrities and Social Influencers

Earlier this month, the Securities and Exchange Commission (SEC) issued a warning to celebrities and social influencers who use social media to encourage consumers to invest and/or purchase stocks. Recent celebrity endorsements for investment in Initial Coin Offerings (ICOs) were highlighted as examples in the SEC’s warning. In the future, if celebrities and social influencers … Continue Reading

Congressional Override Offers Industry Reprieve from CFPB Arbitration Rule but Battles Ahead Still Likely

Last week, the Senate voted 51 to 50 (with Vice President Pence casting the tiebreaking vote) to override the Consumer Financial Protection Bureau’s Arbitration Rule, which was finalized earlier this year in July.  As previously discussed here and here, the Arbitration Rule would have prohibited providers of covered consumer financial products and services from using … Continue Reading

Trump To Nominate Competition-Focused Simons for FTC Chair, CP-Focused Chopra for Commissioner; Reports of Philips for Additional Seat

After months of speculation among the consumer protection and antitrust bars, Trump announced today his intention to nominate former Director of the Bureau of Competition and current Paul Weiss partner Joseph Simons as Chairman of the Federal Trade Commission.  Trump also announced his plan to nominate Rohit Chopra, currently a senior fellow at the Consumer … Continue Reading

California Ruling Requires TransUnion to Pay Record $60M for FCRA Violations; Suit Alleged Consumer Reports Erroneously Linked Consumers to Criminals in OFAC Database

A California jury in federal court ruled on Tuesday, June 20, that TransUnion violated the Fair Credit Reporting Act (FCRA) by erroneously linking certain consumers with similarly named terrorists and criminals in the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC’s) database.  The jury awarded statutory and punitive damages in excess of $60 million, … Continue Reading

NetSpend Settles FTC Charges, Resolving Allegations that it Deceived Consumers over Access to Prepaid Funds

Last week the FTC announced that it had reached a settlement with NetSpend over allegations that NetSpend deceived consumers by promising “immediate access” with “guaranteed approval” to money loaded on its general purpose reloadable cards.  Approved 2-1 with a vote by then-Commissioner Ramirez before her resignation, the order prohibits NetSpend from making misrepresentations about the … Continue Reading

Announcing the Advertising and Privacy Law Webinar Series

Please join Kelley Drye in 2017 for the Advertising and Privacy Law Webinar Series. Like our annual in-person event, this series will provide engaging speakers with extensive experience and knowledge in the fields of advertising, privacy, and consumer protection. These webinars will give key updates and provide practical tips to address issues faced by counsel. … Continue Reading

Do You Venmo? FTC Spotlight on Peer-to-Peer Payments and Crowdfunding

The FTC recently examined peer-to-peer (P2P) payment systems and crowdfunding in the second forum of its FinTech series.  P2P payment systems are online services that allow consumers to share money electronically.  These platforms enable the immediate transfer of money between consumers, typically for free or for a small fee.  In the panel discussion of P2P … Continue Reading

D.C. Circuit Rules that CFPB is Unconstitutionally Structured

Earlier today, the U.S. Court of Appeals for the D.C. Circuit issued a landmark decision against the CFPB, finding that the agency was unconstitutionally structured because it concentrates “enormous executive power in a single, unaccountable, unchecked Director.”  However, the court stopped short of ordering a shutdown of the Bureau and instead held that the President … Continue Reading

CFPB Issues Final Rule to Regulate Prepaid Products; Prepaid Providers Given One Year to Comply

Yesterday the CFPB released a final rule that will impose a variety of consumer protection requirements on prepaid products, such as requiring specified disclosures before product purchase and compelling financial institutions to limit consumer losses for lost or stolen cards.  The CFPB had previously released a proposed rule, which we discussed here, and the final … Continue Reading

Protected: 2016 Advertising and Privacy Law Summit Attendee Follow up

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CFPB Highlights Possible Approaches to Ramping up Regulation of Debt Collectors

The CFPB recently released an outline of proposals that it is currently considering to overhaul the debt collection market.  The proposals under consideration would significantly expand current regulations governing debt collection, including by requiring collectors to maintain specified information to substantiate a debt before contacting consumers, limiting the number of times that a collector can … Continue Reading

Texas Settles with PayPal over Money Transfer App Advertising and Privacy Practices

On Friday, Texas Attorney General Ken Paxton announced a settlement with PayPal, resolving allegations that its Venmo money transfer app violated the Texas Deceptive Trade Practices Act by failing to clearly disclose how consumers’ phone contacts would be used, or how consumers’ transactions and interactions with other users would be shared, and misrepresenting that communications … Continue Reading

Agree to Disagree? CFPB Rule Would Prohibit Mandatory Arbitration Clauses, Require Submission of Arbitral Records

The Consumer Financial Protection Bureau released a proposed rule last week that would prohibit providers of consumer financial products and services from using pre-dispute arbitration agreements to prevent consumers from filing a class action.  In its press release announcing the proposed rule, the CFPB used strong language to condemn mandatory arbitration provisions as permitting “companies … Continue Reading

CFPB, “Please”: Judge Rebuffs CFPB’s Attempt to Compel Documents Regarding For-Profit College Accreditation

Last Thursday, a federal district court judge in D.C. denied the Consumer Financial Protection Bureau’s (CFPB) attempt to compel documents from the Accrediting Council for Independent Colleges and Schools (ACICS).  Rejecting the CFPB’s motion to enforce the Civil Investigative Demand (CID) against ACICS, the court held that “the CFPB lacks authority to investigate the process … Continue Reading

CFPB’s First Data Security Action; Fines Online Platform Dwolla for Alleged Weak Security Practices

On March 2, the CFPB settled its first data security enforcement action against Iowa-based Dwolla Inc.  Launched as a startup in 2009, Dwolla is an online payment platform that enables customers to transfer money directly to/from their bank accounts.  Since its inception, Dwolla had been collecting customers’ sensitive personal information, including their name, address, date … Continue Reading

The Regulatory Landscape for Indirect Auto Lenders After Ally

In December 2013, the Consumer Financial Protection Bureau (CFPB) announced its first settlement in the indirect auto lending industry. The target company was Ally Financial Inc. and Ally Bank (Ally). The CFPB alleged that Ally had engaged in discriminatory pricing by charging minority consumers higher dealer markups for their auto loans. Ally was ordered to … Continue Reading

Wyndham Agrees to Settle FTC Data Security Case

After four years of litigation, this past Wednesday, Wyndham Worldwide Corporation and three of its subsidiaries  (collectively, “Wyndham”) settled the Federal Trade Commission’s (“FTC”) allegations that the global hospitality company failed to protect consumers’ personal information in violation of Section 5 of the FTC Act.  Between 2008 and 2009, Wyndham suffered a series of data … Continue Reading

CFPB Obtains $13M FCRA Settlement with Employee Background Screening Providers

The CFPB recently initiated an enforcement action against General Information Services (GIS) and its affiliate, e-Background-checks.com, Inc. (BGC) for allegedly violating the Fair Credit Reporting Act (FCRA) by failing to implement required safeguards while providing background screening reports to employers about job applicants. The CFPB found that certain background screening reports provided by GIS and … Continue Reading

Reauthorization of MOU Between CFPB and FTC Promotes Regulatory “Harmony”

The Federal Trade Commission (“FTC”) and the Consumer Financial Protection Bureau (“CFPB”) announced on March 12 the reauthorization of the Memorandum of Understanding (“MOU”) entered into by the two agencies on January 20, 2012.  As in the original, the new MOU addresses coordinated efforts in the areas of law enforcement, rulemaking and guidelines, research, consumer … Continue Reading

NY AG Settlement with Three Largest National Credit Reporting Agencies Promises Critical Reform to Credit Reporting Industry

On March 9, 2015, New York Attorney General Eric Schneiderman announced its settlement with the nation’s three largest national credit reporting agencies (“CRAs”): Experian, Equifax, and TransUnion.  This announcement underscores the recent heightened state and federal regulatory scrutiny in this area, and likely is the first of a wave of broad consumer-facing reforms to the … Continue Reading

CFPB Proposes Rule on Prepaid Products to Extend Certain Credit Requirements and Mandate Disclosures

The Consumer Financial Protection Bureau released last week a proposed rule that would impose an array of new requirements on prepaid accounts. The proposed new definition of “prepaid account” would include general purpose reloadable cards, electronic or mobile accounts that can store funds such as PayPal accounts, payroll cards, and certain government benefit cards, but … Continue Reading

CFPB Director Cordray Testifies Before House Financial Services Committee

CFPB Director Richard Cordray testified before the House Financial Services Committee today, fielding questions and comments on an array of issues from the CFPB’s data collection practices to the Qualified Mortgage Rule, which went into effect on January 10, 2014. The hearing was scheduled in response to the CFPB’s release of its fourth Semi-Annual Report … Continue Reading

CFPB Director Addresses Enforcement Strategy for New Mortgage Rules before Senate Banking Committee

On Tuesday November 12, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing on the fourth Semi-Annual Report of the Consumer Financial Protection Bureau (CFPB or Bureau). The hearing came amid growing concerns about enforcement of the CFPB’s mortgage lending and servicing rules taking effect on January 10, 2014. The rules implement … Continue Reading

CFPB Releases Advanced Notice of Proposed Rulemaking on Debt Collection Practices

On Wednesday November 6, the CFPB released an Advanced Notice of Proposed Rulemaking (ANPR) seeking comment on debt collection practices and noting that the Bureau is considering proposing rules regarding debt collection. The CFPB simultaneously announced that it was adding approximately 5,000 consumer debt collection complaints to its public Consumer Complaint Database. According to the … Continue Reading
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