On July 11, CFPB Director Rohit Chopra drafted a blog post detailing the Bureau’s efforts to comply with President Biden’s Executive Order on Promoting Competition in the American Economy aimed, in part, to address the Administration’s concerns about pressing antitrust and competition issues affecting consumers. The CFPB was directed by the Order to explore ways to make it easier for consumers to switch financial institutions and to aggressively enforce the prohibition of UDAAPs in consumer financial products and services pursuant to the Dodd-Frank Act.
Director Chopra indicated the Bureau is identifying obstacles consumers face when looking to refinance and switch providers by, for example:
- Inquiring with credit card issuers about changes that have undermined the ability of consumers to get lower-rate offers from other issuers; and
- Implementing required rulemaking on personal financial data rights aimed at promoting competition and giving control of data back to consumers.
The CFPB is in the process of identifying barriers of entry faced by small financial institutions and new entrants looking to challenge dominant players in the market. For example, the CFPB has ordered Big Tech companies participating in the payment and banking space to provide information about their use of individual consumer data (we discussed this initiative in a previous blog post here).
According to the Director, the CFPB launched an initiative to prevent back-end fees, which obscure the all-in cost of a product and service. A rulemaking process is underway to address credit card late fees “that cost Americans $12 billion in 2020 alone,” the Director stated.
Putting It Into Practice: As evidenced by Director Chopra’s post and the number of recent enforcement actions, the CFPB is taking seriously the Administration’s directives. Many of the CFPB’s efforts remain in early stages—the results and full effects of the information gathering and rulemaking processes have yet to be realized, and will be monitored with great interest.