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At the Money 20/20 fintech conference, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra announced his intent to move forward with the CFPB’s rulemaking under Section 1033 of the Consumer Financial Protection Act as part of the financial services industry’s movement toward “open banking,” a concept that involves the use of APIs that provide direct access to a financial institution’s data, enabling third-party developers to build applications and services around such data. Specifically, Chopra stated that the upcoming CFPB rules will likely contain provisions: (1) requiring financial institutions that offer transaction accounts to set up secure methods, like APIs, for data sharing; (2) stopping incumbent institutions from improperly restricting access when consumers seek to control and share their data; and (3) exploring safeguards to prevent excessive control or monopolization by a handful of firms. Today, the CFPB released an Outline of Proposals and Alternatives Under Consideration for industry participants to weigh in on the Section 1033 rulemaking. The CFPB will be accepting written feedback from stakeholders through January 25, 2023.

Chopra described the impetus for the new rule as part of an intentional shift by the CFPB away from “fine print” privacy notices and toward procompetitive regulation. “While not explicitly an open banking or open finance rule, the rule will move us closer to it, by obligating financial institutions to share consumer data upon consumer request, empowering people to break up with banks that provide bad service, and unleashing more market competition. If successful, it will also reduce the ability for incumbents to build moats and for middlemen to serve as gatekeepers. It will provide big advantages to those who provide the best products, service quality, and rates.”

According to Chopra, the benefits of moving toward open banking include:

  • More bargaining leverage for individuals and nascent firms;
    • Individuals who want to switch providers would be able to transfer their account history to a new company.
    • Nascent firms would be able to use data permissioned by consumers to improve upon and customize, to provide greater access, and to develop products and services.
  • Better security of personal financial data;
    • If a firm is required to make a person’s financial information available to them, or to a third-party acting on the consumer’s behalf, via a secure method, some privacy problems like screen scraping could be mitigated.
  • More switching and incentives for better service;
    • Individuals could walk away from their financial provider for whatever reason without worrying about the hassle of resetting direct deposits or automatic payments.
    • A competitive market would lead to unbundling where companies compete on individual products, rather than relying on captive customers.
  • More switching would lead to greater efforts by firms to maintain or win customer loyalty.
    • When consumers authorize transfers of their personal financial data, new providers would immediately know the products and services that could best fit their new customers’ needs.
    • Large incumbents would find their customers to be less “sticky” and easier to “poach.” They’d also find it harder to impose “junk fees” and harvest personal financial data for their exclusive use.
  • The ability for financial companies to find new ways to underwrite and score with less bias.
    • Lending could move back to real-world data about someone’s ability to pay back a loan and this could eliminate bias and reliance on credit scores and other proxies.

The proposed rules will be limited to deposit accounts, credit cards, digital wallets, prepaid cards, and other transaction accounts, but Chopra noted that, “while we expect to cover more products over time, we are starting with these ones.” Chopra hopes that the new rule “will be able to facilitate new approaches to underwriting, payment services, personal financial management, income verification, account switching, and comparison shopping.” Chopra also indicated that the new rule may reach beyond consumer access to financial records, but could touch on areas, including data monetization restrictions, purpose limitations, data deletion requirements, data ownership, as well as replacing existing privacy regimes, such as the Gramm-Leach-Bliley Act.

The proposed rules being considered, amongst other things, would:

  • Require a defined subset of Dodd-Frank Act covered persons that are data providers to make consumer financial information available to a consumer or an authorized third-party.
  • Require a potential “authorized third-party” to: (1) provide an “authorization disclosure” to inform the consumer of key terms of access; (2) obtain the consumer’s informed, express consent to the key terms of access contained in the authorization disclosure; and (3) certify to the consumer that it will abide by certain obligations regarding collection, use, and retention of the consumer’s information.
  • Require covered data providers to make available the following categories of information with respect to covered accounts:
    • Periodic statements;
    • Information regarding prior transactions and deposits that have not yet settled;
    • Information about prior transactions not typically shown on periodic statements or online financial account management portals;
    • Online banking transactions that the consumer has set up but that have not yet occurred;
    • Account identity information; and
    • Other information, including consumer reports obtained and used by the covered data provider in deciding whether to provide an account or other financial product or service to a consumer; fees that the covered data provider assesses on its consumer accounts; bonuses, rewards, discounts, or other incentives that the covered data provider provides to consumers; and information about security breaches that exposed a consumer’s identity or financial information.
  • Ensure that data providers transmit consumer information accurately through third-party access portals, by requiring covered data providers to implement reasonable policies and procedures to ensure data accuracy, establish performance standards, and prohibit covered data provider conduct that would adversely affect the accurate transmission of consumer information, or some combination of the above.
  • Limit third-parties’ collection, use, and retention of consumer information to what is reasonably necessary to provide the product or service the consumer has requested.
    • Authorized third-parties would be required to provide consumers with a simple way to revoke authorization at any point, consistent with the consumer’s mode of authorization.
    • The CFPB is considering proposals that would limit third-parties’ secondary use of consumer-authorized information and would require deletion of consumer information that is no longer reasonably necessary to provide the consumer’s requested product or service.
    • The CFPB is also considering proposals to require authorized third-

parties to implement data security standards and maintain reasonable policies and procedures to ensure the accuracy of the data that they collect and use.

Consumer Bankers Association (CBA) President and CEO Lindsey Johnson issued a statement in support of the proposed rulemaking: “CBA long has supported expanding consumers’ access and control of their personal financial data. We look forward to continuing to work with the Bureau on developing a well-founded, durable final rule that promotes competition, spurs innovation, and provides consumers the certainty of knowing their financial data is safe and secure.” In August 2022, the CBA joined other industry trade groups in petitioning the CFPB to “ensure that data aggregators and data users that are larger participants in the aggregation services market — not just banks and credit unions — are examined for compliance with applicable federal consumer financial law, especially the requirements of the forthcoming 1033 rulemaking, including the substantive prohibitions on the release of confidential commercial information.”

In addition to considering any written feedback, the CFPB will be convening a panel of small businesses to hear from small banks and financial companies who will be providers of data, the small banks and financial companies who will ingest the data, and the intermediary data brokers that will facilitate data transfers. Following these discussions, a report about the input received will be published during the first quarter of 2023, which will inform the proposed rule that Chopra plans to issue later in 2023. According to the timeline laid out by Chopra, the CFPB will move forward with implementation when the final rule is issued in 2024.

In response to the Fifth Circuit’s ruling in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau (CFSA) that the Consumer Financial Protection Bureau’s (CFPB) funding mechanism is unconstitutional, West Virginia Attorney General Patrick Morrisey sent a letter on October 24th to the CFPB, calling its continued operations into question and foreshadowing potential state challenges to its actions. While some state AGs and financial regulators are likely to help offset any reduction in CFPB activity through their own investigations and coordination with the CFPB, the dark cloud of the CFSA opinion hangs over the agency.

Continue Reading State Attorney General Calls on CFPB to Heed Fifth Circuit’s Ruling in <em>Community Financial Services Association of America</em>

On October 18, the Consumer Financial Protection Bureau (CFPB) filed a complaint in a Texas federal court against Active Network LLC (Active) for allegedly tricking people, when trying to sign up for a fundraising race or other community event, into subscribing to its discount club Active Advantage.

Specifically, the complaint alleges Active inserted a webpage into its online event registration that provided an offer for a free trial enrollment into Active Advantage. Many consumers clicked on the highlighted call-to-action button — typically labeled “Accept” — because they purportedly believed they were accepting the event charges. Allegedly unbeknown to consumers, the button proceeded to enroll them into an Active Advantage trial membership, which automatically converted to a paid subscription with an annual fee of $89.95, unless consumers opted out or canceled. A confirmation page sent after the transaction included event registration fees, but allegedly did not list the annual fee for Active Advantage, even for consumers who clicked the Accept button. The CFPB alleges this conduct violates the Consumer Financial Protection Act as being deceptive and abusive acts or practices.

In a press release following the complaint’s filing, CFPB Director Rohit Chopra said: “The CFPB is suing [Active] for illegally charging hundreds of millions of dollars in enrollment fees through its use of digital dark patterns and online trickery … . People who thought they were just signing up to run in a charity race found out too late that the company was running away with their money.” The CFPB alleges that since July 21, 2011, Active has generated more than $300 million in fees from memberships through the inserted enrollment offer. And since that time, members have redeemed only a fraction of alleged membership benefits.

The CFPB further alleges that Active increased their discount club’s annual membership fee without sending written notice to its members in violation of the Electronic Fund Transfer Act and Regulation E.

The CFPB is not the only federal agency focusing on alleged “online trickery” through the use of “dark patterns.” As we discussed here, the Federal Trade Commission (FTC) recently released a “Bringing Dark Patterns to Light” report, detailing the rise in sophisticated “dark patterns” that the FTC asserts are designed to trick and trap consumers. The report highlighted multiple enforcement actions under each of the dark pattern categories and concluded with a stern warning that “[f]irms that nonetheless employ dark patterns, take notice: where these practices violate the FTC Act, ROSCA, the TSR, TILA, CAN-SPAM, COPPA, ECOA, or other statutes and regulations enforced by the FTC, we will continue to take action.”

In a major decision released October 19, a three-judge panel of the Fifth Circuit Court of Appeals found the funding mechanism for the Consumer Financial Protection Bureau (CFPB or Bureau) to be unconstitutional. Specifically, the court in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau held the CFPB’s funding violates the Constitution because the Bureau 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 Bureau director. The court rooted its decision in the foundational precepts of the Federalist Papers and the Federal Convention of 1787, at one point quoting George Mason in support of its decision: “The purse & the sword ought never to get into the same hands.”

Background

Plaintiffs Community Financial Services Association of America and Consumer Service Alliance of Texas challenged the validity of the CFPB’s 2017 Payday Lending Rule (Rule), specifically the payment provisions, which prohibits lenders from initiating additional payment transfers from consumers’ accounts after two consecutive attempts have failed for insufficient funds unless the consumer authorizes additional payment transfers. The district court granted summary judgment in favor of the Bureau. The plaintiffs appealed on multiple grounds including: (1) the Rule’s promulgation violated the APA; (2) the Rule was promulgated by a director unconstitutionally insulated from presidential removal; (3) the Bureau’s rulemaking violates the nondelegation doctrine; and (4) the Bureau’s funding mechanism violates the Constitution’s appropriations clause. The Fifth Circuit affirmed the district’s court’s entry of summary judgment in favor of the Bureau on each of the first three issues. But importantly, the court found “Congress’s cession of its power of the purse to the Bureau violates the Appropriations Clause and the Constitution’s underlying structural separation of powers” and reversed on that issue, invalidating the Payday Lending Rule.

The Decision

The court focused on what it characterized as the Bureau’s double insulation from Congress’s appropriation power. Not only does the Bureau receive its funding via request by the director to the Federal Reserve, but also the Federal Reserve itself falls outside the appropriations process by receiving its funding by way of bank assessments. Moreover, funds derived from the Federal Reserve System are not subject to review by the House or Senate Committee on Appropriations. As the court found, “[T]he Bureau’s funding is double-insulated on the front end from Congress’s appropriations power. And Congress relinquished its jurisdiction to review agency funding on the back end.” The court found this relinquishment to be even more problematic given the agency’s expansive authority. “An expansive executive agency insulated (no, double-insulated) from Congress’s purse strings, expressly exempt from budgetary review, and headed by a single Director removable at the President’s pleasure is the epitome of the unification of the purse and the sword in the executive … .”

Ultimately, the court held that while Congress properly authorized the Bureau to promulgate the Rule, the CFPB lacked the wherewithal to exercise that power via constitutionally appropriated funds. The plaintiffs were thus harmed by the Bureau’s improper use of unappropriated funds to engage in the rulemaking at issue and were entitled to a “rewinding” of the Bureau’s action.

Going Forward

The case is not over and is expected to be appealed to a full Fifth Circuit hearing, and after that, it has a good chance of heading to the Supreme Court.

While it stands, this holding renders all CFPB actions from inception of the Bureau, as well as its current activities, vulnerable to challenge — because, like the 2017 Payday Lending Rule, none of the CFPB’s actions from rulemaking to enforcement could have occurred absent the unconstitutional funding. This same appropriations argument is being made in a number of other litigation matters involving the CFPB, including several enforcement cases pending in courts in the Fifth Circuit and elsewhere, as well as in the U.S. Chamber of Commerce case challenging the CFPB’s authority to prohibit discrimination under its UDAAP authority, which is also pending in a district court in the Fifth Circuit (see prior post here).

Troutman Pepper will continue to monitor this case — and all CFPB-related decisions — for future developments, and we will offer commentary about the long-term fallout of this decision in future blog posts.

On October 13, the Consumer Financial Protection Bureau (CFPB) released its 12th Annual Report to Congress on college credit card agreements. The report reviewed agreements and data covering the over 1.2 million student checking and credit card accounts that are governed by partnerships between institutions of higher education and financial services providers, and it highlighted market trends and possible risks. The key findings include that marketing efforts directed at students promote accounts that impose more costs than comparable accounts, and agreements between some financial institutions and colleges are not being disclosed in the manner required.

The provision of Regulation Z that implements Section 305 of the Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) requires credit card issuers to annually submit to the CFPB a copy of any college credit card agreements in effect at any time during the preceding calendar year between the issuer and an institution of higher education or affiliated organization. Credit card issuers are further required to submit: (1) the total number of credit card accounts covered by an agreement; (2) the total dollar amount of payments made by the issuer to the institution during the year and the method or formula used to determine such amounts; and (3) the number of new college credit card accounts covered by an agreement opened during the year. The CARD Act also requires the CFPB to submit an annual report to Congress and make the information submitted by credit card issuers publicly available.

The CFPB’s review included data on 11 deposit/prepaid account providers, including nonbank financial service providers, banks, and credit unions offering more than 650,000 student accounts in partnership with 462 institutions of higher education. Among other findings from the report, the CFPB highlighted:

  • Students are subject to direct marketing efforts that promote accounts that impose more costs than comparable accounts — even comparable accounts offered by the same financial services provider.
    • Some providers’ agreements with schools allow them to charge students five overdraft and/or nonsufficient funds penalties per day, which could total up to $175.
  • Under Department of Education regulations, students must be allowed to select the way they receive their financial aid from a neutral list.
    • The CFPB identified instances where students were told that financial aid payments might not be as timely if students did not choose a college-sponsored account.
  • Schools are required to post on their websites the agreements they have with financial services providers, any compensation exchanged between them, and the average costs paid by students.
    • The CFPB’s review found that hundreds of schools did not appear to have posted the disclosures in the manner required.
  • With respect to the college credit card market, the report found that the number of credit card agreements, overall payments from card issuers to institutions, and open accounts pursuant to such agreements continue to decrease over prior years. Additionally, agreements with alumni associations continue to represent most agreements, more than two thirds of accounts, and payments by card issuers.

CFPB Director Rohit Chopra summarized the key findings as “[t]oday’s report suggests that there is more work to do to ensure that students are not steered into school-endorsed products with junk fees. We will continue to work with the Department of Education to help students find the best possible products.”

In response to the report, the Department of Education released a Dear Colleague Letter, reminding institutions of higher education of their regulatory obligations in overseeing arrangements with financial institutions. In addition, the Department of Education committed to:

  • Improving the process institutions use to report their financial arrangements to the Department of Education;
  • Bringing on additional staff to monitor such arrangements; and
  • Continuing to review arrangements with financial institutions as part of the program review process.

In this episode of The Crypto Exchange, Troutman Pepper Consumer Financial Services Partner Kalama Lui-Kwan welcomes back Keith Barnett and Carlin McCrory to discuss recent interviews by Rohit Chopra from the CFPB related to consumer protection issues, true lender matters, actions against repeat offenders, as well as P2P platforms and the CFPB’s stance on fees.

Keith and Carlin also discuss a recent report released by the CFPB, The Convergence of Payments and Commerce: Implications for Consumers, that examines the challenges in new product categories and risks to consumers inherent in the evolving payment ecosystem. 

Continue Reading The CFPB’s Focus on Crypto and Payments

On September 29, the Consumer Financial Protection Bureau (CFPB or Bureau) released a special edition of its Supervisory Highlights, focusing on student loan servicing. The report contained findings on federal student loan servicing that echo many recent public comments by the Bureau, but more notably, this edition of Supervisory Highlights also focused heavily on loans made by schools themselves, and the CFPB simultaneously announced that it was updating its examination manual and would be conducting examinations of schools that make their own loans to students.

The Supervisory Highlights follows the CFPB’s announcement earlier this year that it would examine the operations of post-secondary schools that extend private loans directly to students. CFPB Director Rohit Chopra explained the decision to undertake the review at the time by stating, “Schools that offer students loans to attend their classes have a lot of power over their students’ education and financial future. It’s time to open up the books on institutional student lending to ensure all students with private student loans are not harmed by illegal practices.”

Among other findings from the report, the CFPB found:

  • When higher education institutions extend credit, the dual role of lender and educator provides institutions with a range of collection tactics that leverage their unique relationship with the student.
    • Some postsecondary institutions employ the tactic of withholding transcripts for delinquent borrowers.
    • Students who cannot obtain transcripts can be locked out of future higher education and certain job opportunities. For these reasons, supervisors have determined this tactic to be abusive under the Consumer Financial Protection Act.
  • Income share agreements, which the Bureau unambiguously refers to as student loans, may result in borrowers realizing very large APRs or prepayment penalties that may be illegal under the Truth in Lending Act (TILA) or state usury laws.

Simultaneously with issuing the Supervisory Highlights, the CFPB updated its Education Loan Examination Procedures. The Bureau explained the need for the update as follows:

  • The Consumer Financial Protection Act provides it the authority to supervise nonbanks that offer private student loans, including post-secondary institutions.
  • To determine which institutions are subject to the CFPB’s authority, the Consumer Financial Protection Act references the definition found in Section 140 of TILA.
  • This TILA definition varies from the one used in Regulation Z, which was the definition referred to in the previous manual.
  • The new version has been updated to inform examiners that the Bureau will be using TILA’s statutory definition of private education loan for the purposes of exercising its authority.
  • Specifically, the new manual instructs examiners that the CFPB may exercise its supervisory authority over an institution that extends credit expressly for postsecondary educational expenses so long as that credit is not made, insured, or guaranteed under Title IV of the Higher Education Act of 1965, and is not an open-ended consumer credit plan or secured by real property.

For schools that have their own credit programs, including tuition-payment plans and other deferred-payment options that may fall under Regulation Z’s definition of “private education loans,” the CFPB is sending the clearest of signals that it intends to devote significant attention to those programs, including the collection practices associated with them. Now would definitely be an opportune time for schools to assess their institutional loan programs.

On September 28, the U.S. Chamber of Commerce (Chamber), together with the Longview Chamber of Commerce, American Bankers Association, Consumer Bankers Association, Independent Bankers Association of Texas, Texas Association of Business, and Texas Bankers Association, filed a lawsuit in the Eastern District of Texas against the Consumer Financial Protection Bureau (CFPB) to prevent the amendment to the Unfair, Deceptive, or Abusive Acts and Practices (UDAAP) section of its examination manual. The groups are suing to stop the CFPB’s assertion that it has the authority to bring discrimination claims against financial institutions on products and services that aren’t protected by fair lending laws.

The exam manual suggests that CFPB examiners and enforcement attorneys could take action against financial institutions for alleged discrimination in checking and saving accounts, international remittances, and other noncredit products. In its press release, the Chamber opined that including disparate impact in the noncredit equation could result in the disappearance of products, such as no-fee checking accounts. According to the Chamber, these accounts are more often offered to customers with higher balances, which often are individuals further into their careers, and a disparate impact analysis could find that no-fee policies for customers with larger balances constitutes age discrimination.

The lawsuit alleges that by asserting it can bring these types of discrimination claims, the CFPB is exceeding the scope of its statutory authority and violating the Administrative Procedure Act (APA). As the Chamber explained: “Congress has not given the CFPB the power to do so, as allegations of discrimination are handled by other agencies through statutes such as the Equal Credit Opportunity Act, the Fair Housing Act, and the Home Mortgage Disclosure Act.” The complaint also argues that the CFPB’s funding mechanism is unconstitutional because it evades the congressional appropriations process.

American Bankers Association President Rob Nichols stated: “This is a step we did not want to take, but it was a necessary step given the extraordinary actions of the CFPB.”

As we blogged here, we were initially skeptical about the viability of the CFPB’s position, announcing that it had decided to interpret the word “unfair” in Dodd-Frank to prohibit discrimination. We thought that the CFPB’s interpretation of UDAAP was beyond its authority because it seems to ignore the legislative choice made by Congress to explicitly limit the reach of anti-discrimination concepts to specific areas when it passed legislation like ECOA, the Fair Housing Act, Title VII, the Americans with Disabilities Act. Our skepticism was reinforced after the Supreme Court issued its ruling in West Virginia v. EPA, as we posted here.

Troutman Pepper will continue to monitor this lawsuit and will provide further updates as they become available.

On July 29, the Consumer Financial Protection Bureau (CFPB) and Department of Justice (DOJ) issued a joint letter to auto finance companies, reminding them of the protections the Servicemembers Civil Relief Act (SCRA) affords to servicemembers and their dependents during periods of military service. These protections include several related to auto lending and leasing, which are particularly important given that recent CFPB research has shown that servicemembers tend to carry more auto loan debt at younger ages than their civilian counterparts, largely due to the need for transportation while living on a military base. The SCRA is enforced by the DOJ and covers debts incurred before active duty, while the CFPB is authorized to address unfair, deceptive, or abusive practices related to auto financing for all members of the public, including servicemembers, under the Consumer Financial Protection Act.

Auto finance companies are encouraged to review the applicable SCRA provisions and ensure compliance, including provisions related to:

  • Vehicle Repossession Protections
    • If a borrower finances or leases a vehicle prior to entering military service, the lender may not repossess the vehicle during the borrower’s military service without a court order.
    • Auto finance companies have the burden of identifying whether borrowers are protected by this provision, and servicemembers are not required to give notice of military status to receive this protection.
  • Early Vehicle Lease Terminations
    • The SCRA permits servicemembers to terminate motor vehicle leases early, and without penalty, after entering military service or receiving orders for a permanent change of station or deployment.
  • Auto Loan Interest Rate Caps
    • The SCRA limits the amount of interest that can be charged to servicemembers on loans incurred prior to military service to no more than 6% per year.

This joint letter joins a blog post issued by the CFPB in February 2022, which we reported about here, outlining regulatory priorities in the auto finance market and showing that auto finance is a top priority for the CFPB.

We’re Here to Help

The DOJ continues to take aggressive action to ensure the rights of servicemembers under the SCRA. It is advisable for auto finance companies to ensure that their SCRA compliance programs are up to date to prevent compliance issues before they occur. We have the experience to assist. Troutman Pepper’s Military Lending Practice Group includes one of the oldest and most well-respected consumer financial services and regulatory practices in the nation. Let us help you ensure our military members are rewarded for their valuable service to our nation.

On September 19, the Consumer Financial Protection Bureau (CFPB) released a blog post, exploring the potential relationship between rising car prices and changes in auto loan performance. The CFPB found that the rate of delinquency, especially for low-income borrowers, has risen over the past year. For example, auto loans for consumers with deep subprime credit scores were 2.4% delinquent two quarters after origination, which is a 33% increase from the previous five-year high set in 2020. While the CFPB could not fully attribute the rising cost of cars to the rise in delinquency rates, “we cannot ignore the relationship between larger loan amounts and increasing interest rates to consumer’s monthly budgets and some consumers’ struggle to stay current on their loans.”

Among other findings from the blog, the CFPB reported:

  • The average price for new vehicles reached a record high of $48,182 in July, while the average price of used vehicles is $28,219, just below the record high set in April.
  • Researchers at the Federal Reserve Bank of New York found that higher vehicle prices are a significant factor driving larger loan amounts.
  • There continues to be a gradual increase in loan term lengths as compared to pre-pandemic growth rates.
  • The combination of comparatively gradual loan term length growth, a relatively sharper increase in vehicle prices, and higher interest rates appears to have led to an increase in average monthly payments.

The post concluded that when looking at delinquency in the first two years after purchase, loans originated in 2021 and 2022 are starting to show higher delinquency rates relative to loans originated in previous years. For example, auto loans originated in 2021 have a delinquency rate of 0.67% in the sixth quarter after origination, which is 13% higher than the delinquency rate of auto loans originated in 2018. This trend is even more pronounced for consumers with subprime and deep subprime credit scores.

The CFPB’s most recent blog post follows a February post, which we reported about here, outlining regulatory priorities in the auto finance market, including steps that the CFPB planned to take to make the market, in its view, more fair, transparent, and competitive.

Additionally, as we previously posted here and here, on June 23, the Federal Trade Commission (FTC) released a proposed Motor Vehicle Dealers Trade Regulation Rule. The new rule could allow the FTC to regulate dealers exempt from CFPB jurisdiction under Section 1029(a) of the Dodd-Frank Act and would impose significant limits on how dealers advertise, impose up-front price disclosure requirements, require new paperwork for any optional “add-on” products, and prohibit a laundry list of specific kinds of misrepresentations in the sales process.

These actions show that auto finance is still very much on the radar of the top federal regulators.