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November 17, 2023

On the wires

November 7, 2023

On the web

November 1, 2023

On the web

October 27, 2023

On the web

CFPB Issues Biennial CARD Act Report to Congress

Consumer Finance Monitor

"On October 25, 2023, the Consumer Financial Protection Bureau (CFPB) released its sixth consumer credit card market biennial report to Congress as required under the Credit Card Accountability Responsibility and Disclosure Act (CARD Act)."

October 25, 2023

On the web

October 20, 2023

Top Post

October 19, 2023

On the web

October 17, 2023

On the web

October 16, 2023

On the web

CFPB and Justice Department Issue Joint Statement Cautioning that Financial Institutions May Not Use Immigration Status to Illegally Discriminate Against Credit Applicants

Consumer Financial Protection Bureau

"The Consumer Financial Protection Bureau and Justice Department today issued a joint statement that reminds financial institutions that all credit applicants are protected from discrimination on the basis of their national origin, race, and other characteristics covered by the Equal Credit Opportunity Act, regardless of their immigration status."

October 6, 2023

On the web

Credit Card Reward ‘Bait and Switch’ Tactics Face CFPB Scrutiny

Bloomberg Law

"The Consumer Financial Protection Bureau is preparing to take a closer look at credit card rewards programs, the agency’s director said. CFPB Director Rohit Chopra on Friday said his agency is eyeing new guidance for how the Electronic Fund Transfer Act, a 1978 law governing electronic payments, applies to what he called “private digital dollars” and other digital currencies, including crypto."

On the wires

October 2, 2023

On the wires

September 21, 2023

On the web

September 13, 2023

On the web

Big Tech's Role in Contactless Payments: Analysis of Mobile Device Operating Systems and Tap-to-Pay Practices

Consumer Financial Protection Bureau

"In jurisdictions around the world, consumers, small businesses, financial institutions, and policymakers are recognizing the benefits of open ecosystems in the digital world...Given the agency’s mandate to ensure fair, transparent, and competitive markets, as well as the CFPB’s plans to issue rules that will accelerate the shift to open banking in the United States, the CFPB analyzed POS payments in the context of mobile operating systems to better understand the state of platform interoperability in payments, a critical open banking use case."

September 7, 2023

On the web

June 15, 2023

On the web

April 13, 2023

On the web

Are Payment Apps Systemically Important? CFPB's Chopra Thinks So

American Banker

"Rohit Chopra, the director of the Consumer Financial Protection Bureau, has concerns about peer-to-peer payment platforms such as PayPal, Venmo and Cash App.  During a webcast appearance on Tuesday, Chopra suggested that financial regulators should consider whether such money transmitter services should be designated as systemically important to ensure their customers' funds are adequately protected. (Subscription Required)"

March 3, 2023

On the web

Consumer Use of Buy Now, Pay Later: Insights from the CFPB Making Ends Meet Survey

Consumer Financial Protection Bureau

"This report explores the consumer financial profiles of Buy Now, Pay Later (BNPL) borrowers using the Bureau’s Making Ends Meet survey and its association with credit bureau data. While many BNPL borrowers who we observed used the product without any noticeable indications of financial stress, BNPL borrowers were, on average, much more likely to be highly indebted, revolve on their credit cards, have delinquencies in traditional credit products, and use high-interest financial services such as payday, pawn, and overdraft compared to non-BNPL borrowers."

January 19, 2023

On the web

CFPB Issues Guidance to Root Out Tactics Which Charge People Fees for Subscriptions They Don’t Want

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB) issued a new circular affirming that companies offering “negative option” subscription services must comply with federal consumer financial protection law. Negative option programs include subscription services that automatically renew unless the consumer affirmatively cancels, and trial marketing programs that charge a reduced fee for an initial period and then automatically begin charging a higher fee.

December 21, 2022

On the web

CFPB Orders Wells Fargo to Pay $3.7 Billion for Widespread Mismanagement of Auto Loans, Mortgages, and Deposit Accounts

Consumer Financial Protection Bureau

“The Consumer Financial Protection Bureau (CFPB) is ordering Wells Fargo Bank to pay more than $2 billion in redress to consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines. The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes. Consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank.”

November 30, 2022

On the wires

Fraud, Transaction Problems Highlight US Consumer Complaints Over Crypto

Reuters

“Fraud and transaction problems were leading factors in a surge of US consumer complaints related to cryptocurrencies & other digital assets. The report from the US Consumer Financial Protection Bureau (CFPB) comes as the high-profile failure of the FTX crypto exchange has seized the attention of regulators and shaken the crypto industry. “Our analysis of consumer complaints suggests that bad actors are leveraging crypto-assets to perpetrate fraud on the public,” said CFPB Director Rohit Chopra.  Even before the collapse of FTX, complaints from consumers who were hit by other types of digital currency losses have been rising at an alarming rate, the CFPB reported. The CFPB report said the crypto market has become a magnet for fraudsters who see little chance that their schemes will be detected due to the absence of investor protection and the opaque nature of the market.”

October 4, 2022

On the web

Why The US Wants To Regulate The Buy Now, Pay Later (BNPL) Industry

MediaNama

“The US Consumer Financial Protection Bureau (CFPB) on September 15 published a report detailing the consumer harms that it observed with the “rapidly growing” Buy Now, Pay Later (BNPL) industry arising from practices like data harvesting, inconsistent consumer protection, and debt overextension.  The agency noted that it will identify potential guidelines or rules to issue to ensure that BNPL lenders adhere to many of the baseline protections that already exist for other forms of credit. The report comes after CFBP in December 2021 announced a market monitoring inquiry to gain more insight into the industry.”

September 28, 2022

On the web

Regulator Homes In On ‘Loan Stacking’ Across Buy Now, Pay Later Firms

Forbes

“Buy now, pay later services (BNPL) are growing by leaps and bounds, but the lightly regulated industry could end up causing more harm than good for consumers, according to a new U.S. government report. The BNPL lenders offer consumers the option to pay for purchases in interest-free installments over a relatively short period; four payments in six weeks is common. That kind of financing is popular with people who don’t have access to traditional forms of credit, and the lenders will offer increasingly larger borrowing limits if borrowers exhibit solid repayment behavior. The services are designed to be easy to use and are often seamlessly integrated with online checkouts, making it almost too easy for consumers to sign on for a new loan. Unlike banks and credit-card companies, however, the BNPL lenders run only limited credit checks, and they don’t know if new users already have loans on rival services. A report by the U.S. Consumer Financial Protection Bureau released last week warned of the risk of “loan stacking,” where individuals risk getting in over their heads by taking out loans from multiple BNPL companies.”

September 16, 2022

On the web

U.S. Consumer Watchdog Plans to Regulate ‘Buy-Now, Pay-Later’ Companies

Reuters

“The U.S. Consumer Financial Protection Bureau (CFPB) plans to start regulating “buy-now, pay-later” (BNPL) companies like Klarna and Affirm Holdings due to worries their fast-growing financing products are harming consumers, the agency said on Thursday. The watchdog, which does not currently oversee BNPL companies or products, will issue guidance or a rule to align sector standards with those of credit card companies, it said. The agency also said it would implement appropriate supervisory examinations.”

September 1, 2022

On the web

The P2P Fraud Conundrum

The Regulatory Review

“Have you ever received an automated message from your bank warning you about an unauthorized payment? If so, you may want to think twice before acting on it. According to a recent report in The New York Times, some individuals have received instructions to send payments through peer-to-peer (P2P) payment apps such as Zelle or Venmo to reverse supposedly fraudulent transactions, only to have scammers steal those payments. And even if victims report the fraud, banks may refuse to return the credit. This increasingly common scenario reveals a critical distinction in what consumer protection law considers to be an “unauthorized transaction.” When thieves hack consumers’ accounts or steal their phones and transfer money, the Electronic Fund Transfer Act (EFTA) considers the resulting transactions to be unauthorized and requires banks or payment services to refund them. But in instances where scammers trick individuals into authorizing payments themselves, Regulation E, which implements the EFTA, does not protect the payments. This subtle distinction marks the difference between an easy refund and the loss of thousands of dollars for victims of fraud. Currently, Regulation E requires financial institutions to credit customers for unauthorized transfers from their accounts made by third parties. In most cases of unauthorized transactions, the financial institution itself has liability. But in some cases where a third-party service gives a customer access to transfers from the customer’s bank account, the regulation holds the service provider liable for unauthorized transactions.”

August 1, 2022

On the web

Unlocking Consumer Bank Data Stokes Chopra’s ‘Underworld’ Fears

Bloomberg Law

“Consumers who let budgeting apps or payment platforms access their banking data shouldn’t feel as “powerless” about how that information is used if a pending regulation works as planned, said the head of the Consumer Financial Protection Bureau. The bureau is working to finish a long-awaited rule that would make it easier for people to share information about their bank accounts and other sensitive data that financial institutions store and protect. Opening up this data to online financial tools promises to boost competition, though it also raises risks that people’s information could be misused… Chopra called the emergence of big tech companies in the financial services arena “one of the most high stakes questions we have to confront as an industry, as regulators and as a public.” “It raises a lot of very, very pressing questions, not just about privacy, but about fair competition, transparency and consumer protection,” he told Bloomberg Law.”

July 27, 2022

On the web

U.S. Consumer Watchdog (CFPB) to Scrutinize Crypto Payments, Big Tech Moves Into Finance

Reuters

“The top U.S. consumer watchdog plans to scrutinize the use of cryptocurrencies for real-time payments and ramp up oversight of Big Tech companies as they expand into the traditional financial sector, its director told Reuters. The Consumer Financial Protection Bureau (CFPB) also will publish a report this fall on “buy-now, pay later” or BNPL products, and expects to propose a rule to boost consumer finance competition around early next year, Rohit Chopra said in an interview.”

July 21, 2022

On the web

Consumer Bureau to Push Banks to Refund More Victims of Scams on Zelle and Other Payment Services

MarketWatch

“The Consumer Financial Protection Bureau is preparing to prod banks to pay back more customers who are the victims of scams on Zelle and other money-transfer services, according to people familiar with the coming regulatory effort. Under new guidance the bureau is preparing to release in the coming weeks, banks could face heightened requirements around certain scams that have become more prevalent on these platforms, these people said, such as when a customer is tricked into sending money to a scammer pretending to be a representative of his or her bank.”

June 23, 2022

On the web

U.S. Consumer Watchdog to Review ‘Excessive’ Credit Card Late Payment Fees

Reuters

“The top U.S. consumer watchdog on Wednesday said it had begun a review of “excessive” credit card fees and asked card issuers for data on revenue and expenses in a bid to stamp out abuses and boost competition. The advanced notice of proposed rulemaking issued by the Consumer Financial Protection Bureau (CFPB) confirms a Reuters April report that the agency would scrutinize credit card fees as part of a broader crackdown on what it calls “junk fees,” a catch-all for overdraft, credit card late-payment fees, bounced check fees, and other charges.”

June 22, 2022

On the web

CFPB Initiates Review of Credit Card Company Penalty Policies Costing Consumers $12 Billion Each Year

Consumer Financial Protection Bureau

“The Consumer Financial Protection Bureau (CFPB) is taking the first step toward addressing credit card company penalty policies costing consumers $12 billion each year, starting by looking at excessive late fees. In an Advance Notice of Proposed Rulemaking published today, the CFPB asks for information on the Federal Reserve Board of Governors’ 2010 immunity provision for excessive late fees that allows credit card companies to escape enforcement scrutiny. The CFPB is seeking data about credit card late fees and late payments, assessing whether those fees are “reasonable and proportional.” We are also seeking data about card issuers’ revenue and expenses, the potential deterrent effect of late fees, and the role late fees play in credit card companies’ profitability.”

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