Recently, the Consumer Financial Protection Bureau (CFPB or Bureau) submitted letters to senators in Connecticut and California supporting their proposals to prohibit medical debt reporting.
CFPB Enters Consent Order Against BloomTech Over Misleading Income-Share Agreements
On April 17, the Consumer Financial Protection Bureau (CFPB or Bureau) entered a consent order against BloomTech, a for-profit vocational school, and its CEO, Austen Allred, for deceptive marketing practices related to income-share agreements (ISAs). The CFPB found that BloomTech and Allred misled students about the nature and cost of their ISAs and made false claims about job-placement rates for graduates. The CFPB’s action highlights the Bureau’s ongoing scrutiny of ISAs, including the Bureau’s classification of ISAs as loans, and the Bureau’s concern that consumers may not fully understand the true cost of their educations if they use ISAs.
CFPB Updates Risk-Based Nonbank Supervision Designation Process
Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a procedural rule streamlining the designation proceedings for nonbank supervision based on a particular entity posing “risks to consumers.” As discussed in “Our Take” below, the changes are designed to encourage nonbanks to volunteer to be supervised, while making it easier for the CFPB to impose supervisory oversight when companies do not consent.
General Counsel of the CFPB Delivers Remarks Focusing on Medical Collections and Tenant Screening
In a recent speech at the National Consumer Law Center/National Association of Consumer Advocates Spring Training, Seth Frotman, General Counsel of the Consumer Financial Protection Bureau (CFPB or Bureau), focused on medical billing and collections and tenant screening and debt, emphasizing the CFPB’s enforcement of the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA) in these areas.
CFPB’s Spring Edition of Its Supervisory Highlights Focuses on Consumer Reporting
Last week, the Consumer Financial Protection Bureau (CFPB or Bureau) released the spring edition of its Supervisory Highlights report, providing a high-level overview of alleged unfair, deceptive, or abusive acts or practices identified by the agency during examinations from April 1, 2023 to December 31, 2023. According to the report, examiners have continued to find deficiencies in consumer reporting agencies’ (CRAs) compliance with the accuracy and identity theft requirements of the Fair Credit Reporting Act (FCRA) as well as deficiencies in furnishers’ compliance with the accuracy and dispute investigation requirements.
HUD Issues Rulemaking Amending Regulations Governing Admission to Public Housing for Applicants with Criminal Records
Last week, the U.S. Department of Housing and Urban Development (HUD) issued a Notice of Proposed Rulemaking, seeking public comment on its proposal to amend existing regulations that govern admission to public housing and housing programs for applicants with criminal records and eviction or termination of assistance of persons on the basis of illegal drug use, drug-related criminal activity, or other criminal activity. The proposed rule would require that, prior to any discretionary denial or termination for criminal activity, public housing agencies (PHAs) and assisted housing owners take into consideration multiple sources of information, including but not limited to the recency and relevance of prior criminal activity. The proposed rule also seeks to clarify existing PHA and owner obligations and reduce the risk of violation of nondiscrimination laws.
DOJ Releases Final Rule on Web Content Accessibility Requirements for State and Local Governments Under Title II of the ADA
On April 8, the U.S. Department of Justice (DOJ) released its Final Rule to revise existing regulations implementing Title II of the Americans with Disabilities Act (ADA). This Final Rule clarifies the obligations of state and local governments to make web content and mobile applications accessible.
Fifth Circuit Reverses Transfer of Credit Card Late Fee Rule Lawsuit to D.C.
On April 5, the U.S. Court of Appeals for the Fifth Circuit issued an order effectively reversing the district court’s decision to transfer the lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) credit card late fee rule from the Northern District of Texas to the District Court for the District of Columbia (D.D.C), finding that the Texas district court lacked jurisdiction to issue its order because the plaintiffs’ appeal of the effective denial of their motion for preliminary injunction was already pending before the appellate court.
CFPB Annual Report Sees Continued Increase in Consumer Reporting Complaints and Complaints Involving Fraudulent Activity, Student Loan Repayment Difficulties, and Auto Finance
On March 29, the Consumer Financial Protection Bureau (CFPB or Bureau) released its Consumer Response Annual Report, providing a high-level overview of the 1,657,600 consumer complaints received by the Bureau from January 1 through December 31, 2023. According to the report, the most-complained-about consumer financial product and service categories in 2023 were consumer reporting (79%), debt collection (7%), credit card (4%), checking or savings account (4%), and mortgage (2%). The CFPB’s 2023 Consumer Response Report found a continued increase in consumer reporting complaints, with more than one million of such complaints sent to the three nationwide consumer reporting agencies (CRA). The CFPB encourages companies to consider how best to incorporate complaint information into their institutional processes to help ensure that problems are detected early and addressed quickly.
Fifth Circuit Temporarily Halts Transfer of Credit Card Late Fee Rule Lawsuit
On April 2, the U.S. Court of Appeals for the Fifth Circuit issued an order staying the district court’s decision to transfer the lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB) credit card late fee rule from the Northern District of Texas to the District Court for the District of Columbia (D.D.C). As discussed here, on March 28, 2024, the district court had transferred the case to D.D.C. finding an “attenuated nexus” to the Fort Worth Division since, according to the district court, only one of the six plaintiffs had even a remote tie to the division. The Fifth Circuit’s stay is in effect until 5:00 pm on Friday, April 5, 2024.