On January 11, the Consumer Financial Protection Bureau (CFPB or Bureau) issued two “advisory opinions” addressing the CFPB’s views of the obligations of consumer reporting agencies (CRAs) under the Fair Credit Reporting Act (FCRA). The advisory opinions are interpretive rules issued under the Bureau’s authority to interpret the FCRA pursuant to § 1022(b)(1) of the Consumer Financial Protection Act of 2010.
In a change of course, the Utah court of appeals has reversed the dismissal of a plaintiffs’ suit against a debt collector based on its alleged failure to register as a collection agency prior to filing collection suits. While the Utah Collection Agency Act (UCAA) was repealed by the Utah legislature last year, discussed here, cases asserting this theory of liability remain pending before state and federal courts in the state. Late last year, in Meneses v. Salander Enterprises LLC, discussed here, the court of appeals held that a violation of the UCAA was not a deceptive or unconscionable act. The court distinguished this case from Meneses by finding that the defendant made affirmative representations in the lawsuits at issue that precluded dismissal at this stage.
As discussed here, during the summer of 2023, Representative Roger Williams (R-Texas) and Senator John Kennedy (R-La.) introduced identical Congressional Review Act (CRA) resolutions in the U.S. House and Senate (H.J. Res. 66 and S. J. Res. 32, respectively) disapproving the Consumer Financial Protection Bureau’s (CFPB or Bureau) implementation of the small business data collection and reporting final rule under § 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Final Rule). Under the CRA, a rule promulgated by an administrative agency “shall not take effect (or continue), if the Congress enacts a joint resolution of disapproval.” On October 18, by a bipartisan vote of 53-44, the Senate approved its resolution. On November 29, the House likewise passed a resolution of disapproval by a vote of 221-202.
On January 9, the California Department of Financial Protection and Innovation (CA DFPI) announced a consent order with Credova Financial, LLC, (Credova) to resolve allegations that, in violation of the California Consumer Financial Protection Law, the company failed to disclose potential third-party fees to consumers. Pursuant to the settlement, Credova is required to pay a $50,000 penalty and disclose potential third-party convenience fees to consumers in the future.
The Federal Trade Commission (FTC) and Connecticut Attorney General William Tong filed suit against auto dealer Manchester City Nissan (Manchester City), its owner, and several employees for allegedly deceiving consumers about the price of certified used cars, add-ons, and government fees. Filed January 4, the lawsuit was brought under the FTC Act and the Connecticut Unfair Trade Practices Act.
To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week:
On January 2, New York Governor Kathy Hochul unveiled her 2024 consumer protection agenda, which includes plans to regulate the “buy now, pay later” (BNPL) industry. Specifically, Governor Hochul plans to propose legislation to require BNPL providers to be licensed in the state and to authorize the New York State Department of Financial Services to propose and issue regulations for the industry. According to Governor Hochul, “New Yorkers are increasingly turning to [BNPL] loans as a low-cost alternative to traditional credit products to pay for everyday and big-ticket purchases. This legislation and regulations will establish strong industry protections around disclosure requirements, dispute resolution and credit reporting standards, late fee limits, consumer data privacy, and guidelines to curtail dark patterns and debt accumulation and overextension.”
To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week:
On December 22, Montana Attorney General Austin Knudsen issued an opinion on whether Earned Wage Access (EWA) products constitute either “consumer loans” under Montana Code § 32-5-102(2)(a) or “deferred deposit loans” under § 31-1-703. In short, AG Knudsen’s opinion was no, “so long as the EWA product is fully non-recourse, does not condition an income-based advance on any interest, fees, or other consideration or expenses, and limits income-based advances to income already earned by the consumer.”
Late last month, Councilmember Kenyan R. McDuffie introduced B 25-0609, entitled the Protecting Affordable Loans Amendment Act of 2023, that proposes to opt the District of Columbia out of sections 521-523 of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA). Sections 521-523 of DIDMCA empower state banks, insured state and federal savings associations, and state credit unions to charge the interest allowed by the state where they are located, regardless of where the borrower is located and regardless of conflicting state law (i.e., “export” their home state’s interest-rate authority). But another section of DIDMCA (section 525), permits states to opt out of sections 521-523 via legislation. If the bill passes, the District will join Colorado, discussed here, Iowa and Puerto Rico as the only jurisdictions currently opting out.