On March 15, the CFPB issued a Request for Information (RFI) about data broker business practices to inform planned rulemaking under the FCRA and provide the CFPB with insight into the full scope of the data broker industry. In particular, CFPB is seeking information about (i) new business models that sell consumer data and (ii) consumer harm and market abuses.
Continue Reading CFPB Launches Inquiry into the Business Practices of Data Brokers

On February 28, 2023, the FTC and the CFPB issued a joint request for information (“RFI”) seeking public comment on background checks used to screen potential tenants for rental housing. As part of the RFI, the FTC and the CFPB are asking current tenants, prospective tenants, advocacy groups, commercial and individual landlords, property managers, background screening companies, other consumer reporting agencies, and others to weigh in on a wide array of issues that affect tenant screening, such as:…
Continue Reading CFPB, FTC Seek Public Comment on Tenant Background Checks

On February 27, the California Department of Financial Protection and Innovation (DFPI) issued new guidance with respect to the performance of remote work by mortgage loan originators (MLOs) working for licensees under the California Residential Mortgage Lending Act (California Financial Code Sections 50000 et seq., the “CRMLA”). The CRMLA does not expressly prohibit employees of a licensee from working at a remote location, such as an employee’s home. A licensee may authorize an employee to perform limited functions at a remote location that is not considered a branch office, provided that the location does not have the indicia of a…
Continue Reading California DFPI Publishes New Guidance on Remote Work by MLOs

On March 2, the CFPB published a report analyzing the financial profiles of consumers who borrow through buy now, pay later (BNPL) lending products. The report found that BNPL borrowers on average are more likely to be active users of other credit products such as credit cards and alternative financial services such as payday loans. The report also found that BNPL borrowers are more likely to exhibit signs of financial distress, for example, high levels of indebtedness and revolving balances or delinquencies on their credit cards. In announcing the report’s publication, the CFPB highlighted several other noteworthy findings:…
Continue Reading CFPB Report Details Financial Profiles of BNPL Borrowers

On March 7, the CFPB and the NLRB announced that they entered into an information sharing agreement to better protect consumers and address practices that harm workers in specific labor markets. The agreement further supports both agencies’ collaborated efforts to protect consumers and worders under both consumer financial protection laws and the NLRA. This follows upon the CFPB’s prior efforts to investigate consumer risks in the workforce, specifically from employers. These efforts unveiled specific issues consumers could face in the work force, including:…
Continue Reading CFPB and NLRB Enter Information Sharing Agreement

On March 9, the FTC unanimously voted to block the proposed merger between the nation’s largest provider of home mortgage loan origination systems (LOS) and other key lender software tools, and its top competitor that offers the same services. In its complaint, the FTC alleged that one company owns the country’s dominant LOS platform, while the other company owns and operates the second-largest platform. In a press release announcing the administrative complaint, the FTC stated that the deal “would drive up costs, reduce innovation, and reduce lenders’ choices for tools necessary to generate and service mortgages.”…
Continue Reading FTC Seeks to Block Deal Between Top Mortgage Loan Technology Providers

On February 23, the CFPB issued market-monitoring orders to nine large auto lenders to provide information about their auto lending portfolios. According to the CFPB, auto finance market has seen significant change in recent years, resulting in larger loan amounts and higher monthly payments for consumers. As part of monitoring the auto loan market for consumer risks, the CFPB is collecting auto lending data, and issued these orders to the auto lenders to provide certain information about their lending portfolios as part of collecting such data.
Continue Reading CFPB Provides Guidance on Auto Finance Data Pilot

On February 23, the CFPB issued a consent order penalizing an auto finance company for allegedly violating the financial rights of military families and other consumers in providing auto title loans. The CFPB found that the company violated the Military Lending Act by extending prohibited title loans and charging interests rates nearly three times greater than the 36% annual interest rate cap. Pursuant to the consent order, the company is required to provide redress payments to consumer in the amount of $5.5 million, implement and maintain robust internal controls to prevent repeat offenses, and pay a $10 million fine.
Continue Reading Recent CFPB Actions Focus on Protecting Military Families

On February 2, the Massachusetts Attorney General announced that her office entered into an assurance of discontinuance with an auto loan provider to settle allegations of certain illegal auto loan collection practices. Specifically, the Massachusetts AG alleged that, beginning in 2017 and continuing to the present day, the auto loan provider allegedly failed to give borrowers adequate information relating to the calculation methods for deficiencies left on their auto loans after their vehicles were repossessed. The Massachusetts AG further alleged that the auto loan provider engaged in a pattern of excessive collection calling to borrowers in violation state debt collection…
Continue Reading Massachusetts AG Settles Enforcement Action Against Auto Lender

The rapid rise of AI used with advertising, marketing and other consumer facing applications has caused the FTC to continue to take notice and issues guidance. For example, the FTC is concerned about false or unsubstantiated claims about an AI product’s efficacy. It has issued AI-related guidance in the past. The following is some recent FTC guidance to consider when referencing AI in your advertising. This guidance is not necessarily new, but the fact that it is being reiterated should be a signal that the FTC continues to focus on this area and that actions may be forthcoming. In fact,…
Continue Reading You Don’t Need a Machine to Predict What the FTC Might Do About Unsupported AI Claims

On February 9, the FTC provided the CFPB and the Federal Reserve Board with its annual letter that summarizes its activities enforcing the ECOA and its implementing regulation, Regulation B, in the prior year. The FTC is in charge of ECOA enforcement for financial service providers that are not banks, thrifts, or federal credit unions. In accordance with the Dodd-Frank Act, the CFPB has rulemaking and enforcement authority over ECOA, and the FTC retains its authority to enforce ECOA, as well as authority to enforce any CFPB rules applicable to entities within the FTC’s jurisdiction. As set forth in full in…
Continue Reading FTC Provides CFPB with Letter on ECOA

On February 7, the CFPB issued an Advisory Opinion to address the applicability of RESPA section 8 to operators of certain digital technology platforms that enable consumers to comparison shop for mortgages and other real estate settlement services, including platforms that generate potential leads for the platform participants through consumers’ interaction with the platform.
Continue Reading CFPB’s RESPA Advisory Addresses Digital Mortgage Comparison-Shopping Platforms, Lead Generation

On February 3, the U.S. District Court for the Northern District of Illinois issued an opinion and order dismissing with prejudice the CFPB’s complaint for violations of the ECOA against a mortgage lender and its owner violated for engaging in discriminatory marketing and applicant outreach practices. In particular, the CFPB alleged fair lending violations based on comments made by the company on a local radio station that the CFPB alleged discouraged prospective minority applicants from submitting mortgage loan applications to the lender. The Bureau’s allegations relied on the ECOA’s implementing regulation, Regulation B, which prohibits creditors from making any statements “to applicants…
Continue Reading District Court Dismisses CFPB Redlining Action Against Nonbank, Limits ECOA’s Reach