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With the change of administration in Washington, the Consumer Financial Protection Bureau (the “CFPB” or “Bureau”) is widely expected to assume a posture of aggressive enforcement of consumer protection laws. One area that we anticipate will receive heightened scrutiny is payday lending, a form of lending that typically involves small, short-term loans at high interest rates. Under new leadership, the CFPB may seek to require that payday lenders assess a borrower’s ability to pay. And even absent such a requirement, the CFPB may pursue enforcement actions against lenders for lending that the CFPB considers “predatory” and/or “unfair,” and therefore putatively in violation of the Consumer Financial Protection Act of 2010 (“CFPA”).
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On December 30, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a lender that provided installment loans to consumers affiliated with the military over the lender’s alleged violations of the Military Lending Act (MLA), Electronic Fund Transfer Act (EFTA), and Consumer Financial Protection Act of 2010 (CFPA).
According to the CFPB, the company originates tens of thousands of loans annually, with individual loans normally ranging from $500 to $10,000. The CFPB alleged that since October 2016, for loans to those affiliated with the military, the company violated the MLA’s prohibition on requiring loans to be repaid by “allotment.” The allotment system, run by the Department of Defense, allows servicemembers to allocate a share of their pay to designated recipients. With respect to consumers not covered by the MLA, the CFPB also alleged that the company vio
MLO, Ops Jobs; Lender Wanted; Small Business Grant; Ignore the CFPB at Your Own Peril Dec 31 2020, 8:22AM
I still don’t know what I’m wearing to the living room on New Year’s Eve. Heck, I may not even go. Wouldn’t it be nice to be on a cruise? Ever heard of the SS Warrimoo? Me neither until a few trivia-loving readers sent me emails saying that the ship reportedly once navigated to a point that simultaneously spanned two different hemispheres, two centuries, two days, two months, two years, and two seasons. If true, that’s neat. But documentation is lacking, as was the precise navigation 120 years ago. On the other hand, there’s plenty of documentation about demographics as 72 million millennials are snapping up houses right and left. And in a year when some were focused on the yield on the U.S. risk-free 10-year Treasury note ranging from 1.94 percent down to 0.31 percent, others were focused on regulations, since regulators have plenty of d
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What’s old is new again. 2021 will bring a new U.S. Administration and hopefully positive developments with regard to the COVID-19 pandemic, but it also is likely to see further adverse economic impacts. Various financial models are predicting differing trajectories for potential recession and economic recovery. What we do know is that 2020 has resulted in sizeable income loss and employment interruption for many. In the face of all this challenge, the CFPB is likely to focus in 2021 on consumer loss mitigation process and transparency. Getting it right is paramount for lenders and servicers as 2021 customer contact volumes will increase with the potential sunset of COVID-19 relief measures.
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Welcome to Wiley’s update on recent developments and what’s next in consumer protection at the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this newsletter, we analyze recent regulatory announcements, recap key enforcement actions, and preview upcoming deadlines and events. We also include links to our articles, blogs, and webinars with more analysis in these areas. We understand that keeping on top of the rapidly evolving regulatory landscape is more important than ever for businesses seeking to offer new and ground-breaking technologies.
Regulatory Announcements