Consumer Financial Protection Bureau (CFPB)

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On November 16, the Consumer Financial Protection Bureau (CFPB or Bureau) released its Fair Debt Collection Practices Act (FDCPA) Annual Report detailing the CFPB’s 2022 activities related to debt collection practices. This comprehensive document summarizes everything FDCPA-related undertaken by the agency during 2022, including enforcement actions, a summary of consumer complaints, education and outreach initiatives, and highlights from examinations it conducted. In addition to summarizing activities in the debt collection space from the past year, the report hints at potential future activities. Tellingly, the CFPB’s focus in 2022 was predominantly on medical debt, as highlighted by its press release announcing this report.

Last week, the annual Community Reinvestment Act & Fair Lending Colloquium took place in Austin, Texas. Two officials from the U.S. Department of Justice (DOJ) discussed in detail the “Combatting Redlining Initiative” led by the DOJ using a “whole of government” approach, the current state of redlining investigations, and the future direction of enforcement. In prepared remarks Assistant Attorney General Kristen Clarke stated, “we are proud of the work we have been able to accomplish in these past two years through the Combatting Redlining Initiative. But we are by no means done. We are also focusing on unlawful practices such as reverse redlining, and steering.”

On November 13, the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board (Fed) announced increased dollar thresholds used to determine whether certain consumer credit and lease transactions in 2024 are exempt from Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing).

On November 7, the Consumer Financial Protection Bureau (CFPB) issued a proposed rule with request for public comment to amend existing regulations defining “larger participants” the CFPB supervises by adding a new section to define larger participants that offer digital wallets, payment applications, and similar services.

On October 30, President Biden issued a sweeping Executive Order calling on Congress to enact privacy laws and directing federal agencies to review existing rules and potentially explore new rulemakings governing the use of artificial intelligence (AI) across various sectors of the U.S. economy. Among other things, the Executive Order will require AI system developers to submit safety test results to the federal government, establish standards for detecting AI-generated content to fight consumer fraud, and develop AI tools to identify and fix vulnerabilities in critical software. According to the White House fact sheet, the stated goal of the Executive Order is to “ensure that America leads the way in seizing the promise and managing the risks of [AI].” To that end, the Executive Order focuses on national security, privacy, discrimination and bias, healthcare safety, workplace surveillance, innovation, and global leadership.

In a major victory for small business lenders, yesterday the U.S. District Court for the Southern District of Texas granted motions filed by three groups of trade association intervenors to extend the court’s existing injunction against the Consumer Financial Protection Bureau’s (CFPB or Bureau) enforcement of its final rule under § 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Final Rule) to cover all small business lenders nationwide. A discussion of the preliminary injunction issued by that Texas federal court on July 31 can be found here. The injunction in Texas Bankers Association v. CFPB will dissolve if the U.S. Supreme Court reverses the Fifth Circuit in Community Financial Services Association v CFPB (CFSA case), which found the CFPB’s funding structure unconstitutional.

On October 19, the Consumer Financial Protection Bureau (CFPB) issued its highly anticipated notice of proposed rulemaking under Section 1033 of the Consumer Financial Protection Act of 2010 (CFPA). The proposed Personal Financial Data Rights Rule would require depository and nondepository entities to make available to consumers and authorized third parties certain data relating to consumers’ accounts, establish obligations for third parties accessing a consumer’s data, and provide basic standards for data access. Notably, the proposed rule only provides for narrow exceptions, such as community banks and credit unions that have no digital interface with their customers. The CFPB is currently accepting comments on the proposed rule until December 29, 2023.

In the last three weeks, the U.S. Department of Justice (DOJ) reached two more settlements with lenders under its Combatting Redlining Initiative, which began in October 2021. On September 27, the DOJ announced that Washington Trust Company agreed to pay $9 million to resolve allegations that it engaged in redlining majority-Black and Hispanic neighborhoods in Rhode Island. On October 19, the DOJ announced a separate $9 million agreement with Ameris Bank to resolve allegations that it engaged in redlining predominately Black and Hispanic neighborhoods in Jacksonville, Florida. And, according to Attorney General Merrick Garland, this is just the beginning. “[T]he Justice Department currently has over two dozen active investigations into redlining, spanning neighborhoods across the country.”

A new enforcement action provides more detail on the expectations of the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) (collectively, the agencies) for the content of tenant screening reports.

On October 11, the Consumer Financial Protection Bureau (CFPB or Bureau) issued an advisory opinion regarding § 1034(c) of the Consumer Financial Protection Act (CFPA), which requires large banks and credit unions to comply in a timely manner with consumer requests for information concerning their accounts. This advisory opinion follows a June 2022 request for information where the CFPB asked for public input on customer service obstacles encountered when interacting with large financial institutions. According to the CFPB, this initiative is in response to large financial institutions moving away from “relationship banking.”