On February 22, 2024, California Attorney General Rob Bonta issued letters (the “AG Letter”) to California’s 197 state-chartered banks and credit unions warning that overdraft and returned deposited item fees may violate California’s Unfair Competition Law (UCL) and the federal Consumer Financial Protection Act (CFPA). The AG Letter encourages the institutions to review their practices and policies regarding: “(1) surprise overdraft fees, which are assessed even when a consumer cannot reasonably anticipate that a debit or checking transaction will overdraw their account; and (2) returned deposited item fees, which are assessed when a consumer deposits a check that is returned, even when the consumer has no knowledge of or control over the circumstances that caused the check to be returned.”… Continue Reading

In a blog post published earlier this week titled “The CFPB’s enforcement work in 2023 and what lies ahead,” the CFPB discussed its 2023 enforcement activity and highlighted its plans to expand its enforcement capacity in 2024.

The CFPB indicated that in 2023, it filed 29 enforcement actions and resolved through final orders 6 previously-filed lawsuits.  … Continue Reading

The Office of Inspector General (OIG) for the Federal Reserve Board and CFPB has issued a report on its evaluation of the CFPB’s process for conducting enforcement investigations.  OIG concluded that the CFPB can enhance certain aspects of that process as described below.

In its evaluation, OIG focused on the efficiency of the Office of Enforcement’s process for conducting investigations, and reviewed Enforcement’s practices for tracking and monitoring matters. … Continue Reading

The CFPB recently issued a rule to adjust maximum penalty amounts under various statutes that it administers. Included among the adjustments are the amounts for the three tiers of civil money penalties that the CFPB may impose for violations of consumer financial protection laws under the Dodd-Frank Act. Specifically, the Dodd-Frank Act initially provided for the following tiers of civil money penalties:

  • For any violation of a law, rule, or final order or condition imposed in writing by the CFPB, a civil money penalty of up to $5,000 for each day during which such violation or failure to pay continues.
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On October 16 of last year, I reported that Eric Halperin, Enforcement Director of the CFPB, announced that the CFPB intended to substantially increase the number of enforcement staff by 50% and to create a 5th litigation team. He explained:

“These additional resources will enable us to open more investigations, including matters with significant market impact and against large market actors, consistent with the Bureau’s priorities.… Continue Reading

As previously reported, in July 2020 the CFPB filed the first ever redlining complaint against a nonbank mortgage company, Townstone Mortgage (Townstone), under the Equal Credit Opportunity Act (ECOA) and Consumer Financial Protection Act (CFPA).  The US District Court for the Northern District of Illinois recently granted Townstone’s motion to dismiss the CFPB’s complaint on the grounds that the ECOA applies to applicants and not to prospective applicants.  … Continue Reading

On December 13, 2022, the Ninth Circuit affirmed the grant of summary judgment by a  California federal district court to the Consumer Finance Protection Bureau (“CFPB”) in a civil enforcement action alleging that Armond Aria, the owner of Global Financial Support, Inc., mailed deceptive solicitations to current and prospective college students advertising a targeted program for assisting those students in applying for scholarships.  … Continue Reading

As the industry continues to digest the Fifth Circuit’s opinion in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau, which held the Bureau’s funding mechanism to be unconstitutional, new litigation illustrates the challenges that the decision creates to the CFPB’s ability to conduct oversight and enforcement.… Continue Reading

Three Republican House members sent a letter last week to CFPB Director Chopra raising questions about the Bureau’s relationship with state attorneys general and its interpretive rule issued in May 2022 regarding the authority of state attorneys general and state regulators (State Officials) to enforce the Consumer Financial Protection Act (CFPA).… Continue Reading

In remarks given on Tuesday to the National Association of State Attorneys General (NAAG), CFPB Director Chopra promoted an aggressive approach to enforcement by both the CFPB and state attorneys general (AGs).

In his most noteworthy remarks, Director Chopra:

  • Identified federal preemption as having played a major role in the 2007-2009 sub-prime mortgage crisis and suggested that the OCC had used preemption “to attack state consumer protection enforcement.” 
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