Credit Reporting + Data Brokers

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Earlier this month, we discussed the lawsuit filed by ACA International, LLC and Collection Bureau Services, Inc. in the U.S. District Court for the District of Columbia against the Consumer Financial Protection Bureau (CFPB or Bureau) and Director Rohit Chopra. The lawsuit challenges the CFPB’s October 1, 2024 advisory opinion on medical debt collection practices. The plaintiffs are seeking an order vacating the advisory opinion and a stay of the effective date pending the conclusion of the case.

On November 13, Representative Gary J. Palmer (R-AL) introduced House Joint Resolution 220, which seeks congressional disapproval of an advisory opinion published by the Consumer Financial Protection Bureau (CFPB or Bureau) relating to medical debt collection practices.

Yesterday, we discussed the constitutional legal challenge against New York City’s recently amended debt collection rules, which were scheduled to go into effect on December 1, 2024. These rules would stringently regulate various debt collection activities by debt collectors operating in the city. Today, the New York City Department of Consumer and Worker Protection (DCWP) announced a delay in the enforcement of these new rules until April 1, 2025.

New York City’s recently amended debt collection rules — scheduled to go into effect on December 1, 2024 and which would stringently regulate various debt collection activities by debt collectors operating in the city — have drawn a constitutional legal challenge. Whether this challenge will affect the effective date is yet to be seen. The plaintiffs seek declaratory and injunctive relief to prevent the enforcement of the rules amending Title 6 of the Rules of the City of New York, which they argue are unconstitutional and preempted by federal and state law.

The U.S. District Court for the District of Massachusetts recently denied a credit repair organization’s motion for partial summary judgment and granted the Consumer Financial Protection Bureau (CFPB or Bureau) and the Commonwealth of Massachusetts’s motion for summary judgment in a case alleging violations of the Telemarketing Sales Rule (TSR), the Consumer Financial Protection Act (CFPA), and Massachusetts state law. The significant penalties and restitution ordered in this case highlight the severe consequences of non-compliance with federal and state regulations governing credit repair services.

On October 1, the Consumer Financial Protection Bureau (CFPB or Bureau) issued an advisory opinion aimed at debt collectors and emphasizing their obligations under the Fair Debt Collection Practices Act (FDCPA) and Regulation F. The opinion specifically emphasizes the prohibitions on false, deceptive, or misleading representations, and unfair or unconscionable means to collect or attempt to collect medical debts.

On September 24, California Governor Gavin Newsom signed into law a package of consumer protection laws, with three bills aimed directly at collection practices. These new laws introduce significant changes in the areas of commercial debt collection practices, medical debt reporting, and civil actions for money judgments.

The Federal Trade Commission (FTC) recently announced that it has filed proposed orders against the owners and operators of Financial Education Services (FES), a credit repair operation accused of running a pyramid scheme and violating the Credit Repair Organizations Act (CROA). The proposed orders call for permanent bans and substantial monetary penalties for the defendants.

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.

On July 5, the California Privacy Protection Agency (CPPA) published a Notice of Proposed Rulemaking regarding Data Broker Registration pursuant to Senate Bill 362 (the Delete Act). The Delete Act requires the CPPA to establish an accessible deletion mechanism. This mechanism allows a consumer, through a single verifiable consumer request, to request that every data broker delete any personal information related to that consumer held by the data broker or associated service provider or contractor. The stated aim of the proposed rulemaking is to clarify and enhance the registration process for data brokers.