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Lori Sommerfield

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With over two decades of consumer financial services experience in federal government, in-house, and private practice settings, and a specialty in fair lending regulatory compliance, Lori counsels clients in supervisory issues, examinations, investigations, and enforcement actions.

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Yesterday, the Federal Trade Commission (FTC) and the State of Arizona announced a joint action against Coulter Motor Company, an Arizona-based motor vehicle dealership, and its former general manager, for allegedly engaging in deceptive pricing practices and discriminatory financing treatment of Latino consumers. The complaint alleges violations of the FTC Act, the Equal Credit Opportunity Act, and the Arizona Consumer Fraud Act. The defendants have agreed to a $2.6 million settlement, most of which will be used to provide refunds to affected consumers.

This week, the Biden-Harris Administration launched a comprehensive initiative aimed at addressing what it describes as everyday hassles that waste Americans’ time and money. This new government-wide effort, called “Time Is Money,” seeks to regulate various business practices that the administration claims add unnecessary burdens to consumers’ lives. The initiative includes actions from multiple federal agencies, including the Consumer Financial Protection Bureau (CFPB or Bureau) and the Federal Trade Commission (FTC).

Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) issued Circular 2024-04 warning financial institutions about the potential illegality of nondisclosure agreements (NDAs) that could deter whistleblowing. Specifically, the Bureau addressed whether requiring employees to sign broad confidentiality agreements violates § 1057 of the Consumer Financial Protection Act (CFPA). According to the CFPB, the answer is “yes” under circumstances that could lead an employee to reasonably believe that they would be sued or subject to other adverse actions if they disclosed suspected violations of federal consumer financial law to government investigators or a law enforcement agency.

The Consumer Financial Protection Bureau (CFPB or Bureau) recently released its semi-annual regulatory agenda, outlining its planned rulemaking initiatives. The CFPB releases regulatory agendas twice a year in voluntary conjunction with a broader initiative led by the Office of Budget and Management to publish a Unified Agenda of Regulatory and Deregulatory actions across the federal government. This agenda includes a mix of rules in the pre-rulemaking, proposed rule, and final rule stages, covering a wide range of topics from mortgage closing costs to financial data transparency. The CFPB has not yet posted a blog or issued a press release about the agenda.

Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) filed a brief in the U.S. District Court for the Northern District of Texas in support of its motion to dissolve the preliminary injunction that has stayed the implementation of its credit card late fee rule. Concurrently, the Bureau also filed a notice of supplemental authority in support of their motion to dismiss or transfer on the grounds that the Fort Worth Chamber of Commerce does not have associational standing to bring the suit. Within hours, the court issued an order requiring further briefing on the issue of associational standing.

As discussed here, on February 3, 2023, an Illinois federal court dismissed a case brought by the Consumer Financial Protection Bureau (CFPB or Bureau) in 2020 against Townstone Financial, Inc., a Chicago mortgage lender, for alleged violations of the Equal Credit Opportunity Act (ECOA). The CFPB had accused Townstone of discouraging prospective African American applicants in the Chicago metropolitan area from applying for mortgages.

On July 2, the Consumer Financial Protection Bureau (CFPB or Bureau) published the summer edition of its Supervisory Highlights, focusing on examinations of auto and student loan servicing companies and debt collectors that were completed between April 1, 2023 and December 31, 2023. The report also highlights consumer complaints about medical payment products and identifies concerns with financial institutions freezing deposit accounts.

As discussed here, following the U.S. Supreme Court’s decision in Community Financial Services Association of America, Limited v. Consumer Financial Protection Bureau (CFPB or Bureau), which upheld the CFPB’s funding structure, the Bureau announced updated compliance dates for its Section 1071 Final Rule concerning small business data collection and reporting under the Dodd-Frank Act.

On June 20, six federal financial services regulators issued the final automated valuation model (AVM) rule. The AVM rule, initially proposed in June 2023 and discussed here, aims to implement the quality control standards mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The final AVM rule is largely identical to the proposed rule and is set to take effect on the first day of the calendar quarter following 12 months after its publication in the Federal Register.

On June 18, the Fifth Circuit Court of Appeals granted the plaintiffs’ petition for a writ of mandamus, effectively halting the transfer of the lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) credit card late fee rule from a Texas federal district court to the District of Columbia. This decision marks another pivotal moment in the ongoing legal battle over the CFPB’s Final Rule, which has seen a complex procedural history unfold over the past few months.