Category: CFPB

The Long Arm of the CFPB

On the fifth birthday of the Consumer Financial Protection Bureau (“CFPB”), Dorsey attorneys discuss the CFPB’s investigatory powers and explain – through an analysis of three important cases – how the events of early 2016 reveal a changing tide. Click here to read the article published in Corporate Counsel.

“Nonbank” Lender Seeks Injunction Restraining CFPB Administrative Action

On May 9, 2016, Integrity Advance, LLC and its CEO James Carnes filed suit against the Consumer Financial Protection Bureau (“CFPB”) in United States District Court for the District of Columbia seeking to enjoin the CFPB from continuing to prosecute an administrative enforcement action under the Consumer Financial Protection Act (“CFPA”) in which the CFPB alleged unfair, deceptive or abusive lending practices.

Problems With the CFPB’s Argument: An Analysis of the D.C. Circuit Oral Arguments on Statute of Limitations

What began as a challenge to the Consumer Financial Protection Bureau’s (“CFPB”) $109 million enforcement ruling against the mortgage company PHH Corp. (“PHH”) for alleged violations of the Real Estate Settlement Procedures Act (“RESPA”), has evolved into a broader discussion about the constitutionality of the agency itself. As demonstrated in the closely watched federal appeal brought by PHH, critical developments occurred earlier this month that have implications for the agency’s future enforcement approach.

When is an Administrative Action Barred by the Dodd-Frank Act’s Three-Year Statute of Limitations? Never, According to the CFPB

Corporate defendants are entitled to the protections afforded by statutes of limitations, which bar claims for conduct long-past and are “vital to the welfare of society.” Recently, however, the Consumer Financial Protection Bureau (“CFPB”) has doubled down on its position that the statute of limitations is inapplicable to enforcement actions brought in a certain category of proceedings.

The New “Yelp.com” for the Consumer Finance Industry

The CFPB recently added a new feature to its Consumer Complaint Database: namely, consumers now have the option to publish “narratives” detailing their allegations against a company. The problem lies in the possibility that these hearsay “narratives” will be used against companies in connection with enforcement actions or lawsuits.

Why Does the CFPB Want to Curb Auto Lenders’ Discretion to Charge Higher or Lower Interest Rates?

On July 14, 2015, the Consumer Financial Protection Bureau (“CFPB”) and Department of Justice (“DOJ”) announced they had reached a “groundbreaking settlement” with American Honda Finance Corporation (“Honda”). The settlement resolves allegations that Honda engaged in racial discrimination by charging higher interest rates on auto loans to minority borrowers. But what is the legal basis for the CFPB’s supervision of auto lenders? And what methodology did the CFPB use to establish the connection between discretion in interest rate markups and racial discrimination in auto lending?

When Did Education Become a Consumer Financial Service?

The mission of the Consumer Financial Protection Bureau (“CFPB”) is to “regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws.” See 12 U.S.C. § 5491(a). So why is the CFPB suing ITT Educational Services, Inc., an educational services provider?