UDAAP

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Much has been written about Mick Mulvaney’s statements about how the Consumer Financial Protection Bureau (CFPB) will no longer “push the envelope” when it comes to enforcement and no longer engage in “regulation by enforcement.” But a little-noticed filing by the CFPB in the Ninth Circuit last month suggests that the CFPB is not necessarily scaling back its enforcement efforts with respect to novel claims under its authority to prevent unfair, deceptive, and abusive acts and practices (UDAAP).
Continue Reading Meet the New Boss; Same as the Old Boss? The CFPB’s Take on UDAAP Might Surprise You

Several of Mayer Brown’s Consumer Financial Services lawyers will be featured at the upcoming Legal Issues and Regulatory Compliance Conference in Los Angeles, sponsored by the Mortgage Bankers Association.

On Sunday, April 29th, Ori Lev will participate on a panel analyzing unfair, deceptive, or abusive acts or practices (UDAAP), as part of the conference’s…

The ABA Business Law Section is holding its 2018 Spring Meeting in Orlando next week and will offer nearly 90 CLE programs and many more committee meetings and events.

Mayer Brown’s Matthew Bisanz will co-moderate, and Anjali Garg will participate on, a panel on April 13th discussing current developments in UDAP/UDAAP enforcement involving financial institutions,…

In a decision expressly based on the novelty of the legal claims brought by the Consumer Financial Protection Bureau (CFPB), a federal district court has rejected the CFPB’s broad demand for consumer restitution and civil money penalties in a case that has already produced several important rulings. The case represents the second time that a federal district judge has rejected the CFPB’s expansive view of remedies following a bench trial. The CFPB’s loss suggests that parties willing to litigate against the CFPB may achieve success even if they lose on the merits, as courts appear reluctant to award the robust remedies the CFPB typically demands, particularly in cases where the CFPB’s claims do not sound in fraud or are based on novel legal theories.
Continue Reading District Court Rejects CFPB Restitution and Penalty Demand

On October 5th, the CFPB finalized its long-awaited payday lending rule, reportedly five years in the making. The final rule is substantially similar to the proposal the Bureau issued last year. However, the Bureau decided not to finalize requirements for longer-term high-cost installment loans, choosing to focus only on short-term loans and longer-term loans with a balloon payment feature.

The final rule will become effective in mid-summer 2019, 21 months after it is published in the Federal Register (except that provisions facilitating “registered information systems” to which creditors will report information regarding loans subject to the new ability-to-repay requirements become effective 60 days after publication).

The final rule identifies two practices as unfair and abusive: (1) making a covered short-term loan or longer-term balloon payment loan without determining that the consumer has the ability to repay; and (2) absent express consumer authorization, making attempts to withdraw payments from a consumer’s account after two consecutive payments have failed.
Continue Reading CFPB’s Final Payday Lending Rule: The Long and Short of It

Dealing the Consumer Financial Protection Bureau (CFPB) another setback, on April 21, 2017, the DC Circuit Court of Appeals refused to enforce a Civil Investigative Demand (CID) issued by the CFPB. The decision is likely to have broad implications for how the CFPB identifies the nature and scope of its investigations in its CIDs, which …

On January 20, the Ninth Circuit handed the Consumer Financial Protection Bureau (CFPB) a victory in one of the first cases challenging the CFPB’s investigative authority — although that victory seems tied to the particular facts of the case.

The court held that the CFPB has the authority to investigate the activities of for-profit, small-dollar lenders created by three Indian tribes (the Tribal Lending Entities). Given the unique facts of the case, however, the decision may provide scant guidance for the other pending cases challenging the CFPB’s authority to issue administrative subpoenas known as Civil Investigative Demands (CIDs).

The case before the Ninth Circuit involved CIDs issued to the Tribal Lending Entities as part of an investigation into whether small-dollar online lenders were violating federal consumer financial laws. Unlike the other pending challenges to the CFPB’s investigative authority, the Tribal Lending Entities did not claim that the nature of their activities (lending money) was outside the scope of the CFPB’s authority. Instead, they argued that the CFPB’s investigative powers – which are limited to sending CIDs to “persons” – did not authorize the agency to send such demands to tribal entities. The Ninth Circuit disagreed.
Continue Reading Ninth Circuit Affirms CFPB Authority to Investigate Tribal Lenders

Claims brought by the Consumer Financial Protection Bureau (CFPB) alleging that a company engaged in deceptive conduct must be accompanied by specific factual allegations or face dismissal, according to a ruling by a federal judge in the Central District of California. Because the Central District of California is a favorite forum of the CFPB’s and …

A federal district court in California handed the Consumer Financial Protection Bureau (CFPB) a big win on Wednesday, August 31, 2016, granting the agency summary judgment on liability in its lawsuit against CashCall, Inc., its affiliated entities and its owner. In a 16-page decision and order, the US District Court for the Central District …

On Tuesday, August 2, 2016, at 2:00pm EDT, Mayer Brown and Paybefore.com will present a webinar on the CFPB’s actions against payment processors for allegedly facilitating illegal transactions by their clients. The presenters will be Mayer Brown attorneys David Beam, Ori Lev, and Jeremy McLaughlin, and the moderator will be Paybefore’s Evan Schuman.  The webinar…