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.
CFPB Advises Large Banks on Compliance with CFPA § 1034(c)
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.”
Federal Agencies Finally Weigh in on Immigration Status in Credit Underwriting
Yesterday, the U.S. Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) (collectively, the agencies) issued a joint statement on the subject of creditors’ use of immigration status for eligibility for credit transactions, an issue that has been kicking around in private litigation for years, but as to which the federal regulators have been silent. The joint statement warns lenders that “unnecessary or overbroad” reliance on immigration status in the credit decisioning process may violate the Equal Credit Opportunity Act (ECOA) and other federal laws. According to the agencies, the joint statement was issued in response to consumers reportedly being rejected for credit cards and loans because of their immigration status, even when they have strong credit histories and are otherwise qualified to receive the loans.
October 11 Was a Red-Letter Day in the Growing Federal-State War on Fees
On October 11, the Consumer Financial Protection Bureau (CFPB or Bureau) published a special edition of its Supervisory Highlights report. This report serves as a “victory lap” for the Bureau, which highlights the relief it has obtained for consumers since the release of its March 2023 Special Fees Edition, discussed here. According to the Bureau, its supervisory efforts have led to institutions refunding over $140 million to consumers, including $120 million in overdraft and non-sufficient funds (NSF) fees.
Third Circuit Finds No Exception Under FCRA for a Furnisher’s Failure to Investigate “Frivolous” Indirect Dispute
The Third Circuit Court of Appeals overruled a district court’s reading of an exception into §1681s-2(b) of the Fair Credit Reporting Act (FCRA) that would allow a furnisher discretion to refuse to investigate an indirect dispute it deems frivolous or irrelevant. Instead, the Third Circuit held that a furnisher must investigate even frivolous indirect disputes — disputes submitted by a consumer first to a consumer reporting agency (CRA) that are then transmitted by the CRA to the furnisher. A copy of the decision can be found here.
Supreme Court Hears Arguments on Challenge to CFPB’s Funding Structure
On October 3, the U.S. Supreme Court heard arguments in Community Financial Services Association of America, Limited (CFSA) v. Consumer Financial Protection Bureau (CFPB or Bureau), a case in which the Fifth Circuit held that the CFPB’s funding mechanism violates the Appropriations Clause because the CFPB does not receive its funding from annual congressional appropriations like most executive agencies, but instead, receives funding directly from the Federal Reserve based on a request by the CFPB’s director. If the Supreme Court affirms the Fifth Circuit’s decision, the future of the Bureau as well as its rulemaking and enforcement actions would be in question.
CFPB Extends Deadline for FCRA Rulemaking Feedback by One Week
As discussed here, on September 21 the Consumer Financial Protection Bureau (CFPB) released an outline of its plans for rulemaking under the Fair Credit Reporting Act (FCRA). The outline was supplied for initial comment to a panel of small business representatives convened under the Small Business Regulatory Enforcement Fairness Act (SBREFA).
CFPB and FTC File Amicus Brief Urging Second Circuit to Find FCRA Requires Unverified Information to be Deleted from Consumer Report
Yesterday, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) (collectively, the agencies) filed an amici curiae brief urging the U.S. Court of Appeals for the Second Circuit to reverse a district court’s decision finding a furnisher’s investigation of a consumer’s dispute and subsequent furnishing of the disputed information to be reasonable under the Fair Credit Reporting Act (FCRA).
August Consumer Litigation Filings: Everything Up Again
According to a recent report by WebRecon, court filings under the Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and Telephone Consumer Protection Act (TCPA) were back up for the month of July. Complaints filed with the Consumer Financial Protection Bureau (CFPB) were also up for the month.
Congressional Republicans Receive Banking and Credit Union Trade Association Support for Legislation to Overturn the CFPB’s Section 1071 Final Rule
This summer, 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). Currently, the Senate resolution has not moved beyond introduction, but the House Financial Services Committee recently approved the House resolution to advance. If the resolutions are adopted by both houses of Congress and signed by the President, the Final Rule would be overturned. While that outcome appears unlikely under the current Democratic administration, letters submitted to Congress by banking and credit union trade groups supporting the joint resolution do appear to confirm the nearly unanimous industry opposition to the Final Rule.