Search Results: CFPB

Increased Industry Attention on RESPA Section 8 Leads to Class Action Lawsuit

On April 2, 2024, a putative class action was brought against a wholesale mortgage lender alleging, among other claims, violations of Section 8(a) of the Real Estate Settlement Procedures Act (RESPA). Unlike conventional mortgage providers that analyze the borrower’s creditworthiness and then provide the mortgage, wholesale mortgage lenders receive mortgage…

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CFPB Files Suit Against Student Loan Servicer

On May 31, 2024, the CFPB announced that it had filed suit against a Pennsylvania-based student loan servicer for engaging in allegedly unfair, deceptive and abusive acts or practices in violation of the CFPA, 12 U.S.C. §§ 5531, 5536(a)(1)(B), and for failing to establish reasonable credit reporting procedures in violation of Regulation V, 12…

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Supreme Court Upholds CFPB’s Funding Structure

On May 16, 2024, the U.S. Supreme Court issued a significant opinion in Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd., upholding the funding structure of the Consumer Financial Protection Bureau (CFPB).  601 U.S. 416.  In a previous post, we reported that on October 3, 2023,…

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CFPB Enters Consent Order Over Student Loan Debt Relief Services

Piggy Bank with a Graduation Cap

On May 20, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a California-based telemarketer that offered student loan debt relief services resolving allegations that the company charged illegal advance fees and misled student loan borrowers.  This telemarketer allegedly claimed to be affiliated with the Department of…

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CFPB Reports Troubling Trends in Credit Card Rewards Programs

On May 9, 2024, the Consumer Financial Protection Bureau (CFPB) issued a new Issue Spotlight regarding growing problems in the credit card rewards program industry. Credit card rewards programs have become increasingly complex in recent years.  Especially for credit cards with high annual fees, a key part of attracting interest…

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CFPB and European Commission Release Report Regarding “Critical” Priority Areas for Consumer Financial Protection Issues

In April 2024, the Consumer Financial Protection Bureau (CFPB or Bureau) and the Commissioner for Justice and Consumer Protection of the European Commission (European Commission) announced that three meetings had been convened with senior staff and subject matter experts to discuss “shared priority areas” of concern for consumer financial protection…

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CFPB Enters Into Consent Order With Financial Technology Company

On May 7, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a financial technology company, resolving allegations that the company committed unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA), by failing to provide consumers who closed their accounts with timely…

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CFPB Files Complaint and Proposed Final Judgments Against Higher Education Assistance Agency and National Collegiate Student Loan Trusts

On May 6, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it filed a complaint ​and two proposed stipulated final judgments to resolve its claims against the National Collegiate Student Loan Trusts (the Trusts) and the Pennsylvania Higher Education Assistance Agency​ d/b/a American Education Services (PHEAA). The CFPB alleges that the Trusts and PHEAA violated…

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CFPB Updates its Procedures for Determining Which Nonbanks it Can Supervise

The Consumer Financial Protection Bureau (CFPB) recently issued a new procedural rule to streamline how it determines which nondepository institutions it has the authority to supervise.  According to the CFPB, the new rule coincides with a change in organizational structure.  But it also indicates an affirmative broadening of its regulatory reach….

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California Attorney General Warns California-Chartered Banks and Credit Unions On Surprise Overdraft Fees and Returned Deposited Item Fees

On February 20, 2024, California Attorney General Rob Bonta issued a letter warning California-chartered banks and credit unions with assets under $10 billion that charging surprise overdraft fees and returned deposited item fees is likely an unfair business practice that violates California’s Unfair Competition Law (UCL), Bus. & Prof. Code,…

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CFPB Enters Into Consent Order with For-Profit Coding School

Piggy Bank with a Graduation Cap

​On April 17, 2024, the Consumer Finance Protection Bureau (CFPB) announced ​that it had entered into a consent order​ with BloomTech Inc., d/b/a Bloom Institute of Technology (BloomTech), and BloomTech’s CEO, Austen Allred, resolving allegations that the company’s practices with respect to income-share agreements (ISAs) violated various consumer protection statutes.  BloomTech, formerly known…

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Interpretable Algorithms as a Potential Solution to CFPB’s Guidance on AI-driven Credit Denials

In September 2023, the Consumer Financial Protection Bureau (CFPB) issued guidance on the use of artificial intelligence in issuing credit denials, a prevalent practice among lenders.  The CFPB explained that when denying a credit application, lenders must provide a substantive reason behind the denial.  The guidance further explains that the…

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Chamber of Commerce Sues CFPB To Eliminate or Enjoin $8 Late Fee Cap

Last week, the U.S. Chamber of Commerce (Chamber) joined five other trade associations to sue the Consumer Financial Protection Bureau (CFPB) and its director Rohit Chopra in Texas Federal District Court, seeking a court order declaring a recent CFPB rule arbitrary and capricious, vacating the rule, and enjoining its enforcement. In…

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CFPB Revises Supervisory Appeals Process

On February 16, 2024, the Consumer Financial Protection Bureau (CFPB or Bureau) announced that it is updating its internal supervisory appeals process for institutions seeking to appeal a compliance rating or an adverse material finding.  If a supervised entity disagrees with a compliance rating or any other adverse finding after…

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CFPB Announces New Proposed Rule to Target Junk Fees

On January 24, 2024, the Consumer Financial Protection Bureau (CFPB) announced a new proposed rule as part of the CFPB’s broader strategy of targeting junk fees.  This proposed rule would “prohibit non-sufficient funds (NSF) fees on transactions that financial institutions decline in real time.” These fees apply to “transactions declined…

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