CFPB Highlights Emerging Risks in the Convergence of Payments and Commerce

On August 4, 2022, the Consumer Financial Protection Bureau (CFPB) released a report on the emerging risks consumers face in the growing presence of new products that blur the line between payments and commerce, namely: buy now, pay later (BNPL) offerings; embedded commerce; and integrated “super apps.” Specifically:

Continue Reading Fintech Legal Report—Week of August 19, 2022

Weekly Fintech Focus

  • Democratic senators urge CFPB to focus on bank liability for fraud occurring on P2P payment platforms.
  • CFPB and OCC issue $225M fine to a bank for failures related to unemployment benefits payments.
  • UK financial regulators open consultation on oversight of financial institutions’ third-party service providers.


Continue Reading Fintech Legal Report—Week of July 22, 2022

Weekly Fintech Focus

  • The CFPB terminates a no-action letter with an AI credit underwriter.
  • A CFPB circular confirms that AI underwriting models are subject to anti-discrimination laws including adverse action notices.
  • BNPL companies and credit bureaus face urging by the CFPB to properly report consumer information.
  • The CFPB launches an initiative to improve customer service at big banks.


Continue Reading Fintech Legal Report—Week of June 17, 2022

Weekly Fintech Focus

  • The CFPB plans to review CARD Act Rules.
  • The Treasury Department proposes clarifications to regulatory treatment of Earned Wage Access programs.

CFPB Director Chopra Plans to Review CARD Act Rules

The day after a tough hearing with the Senate Banking Committee, on April 27, 2022, the House Financial Services Committee held a hearing in which Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra spoke with lawmakers about his plans to explore whether the CFPB should revisit and potentially revise previously written rules to implement the Credit Card Accountability Responsibility and Disclosure Act (the CARD Act).

These rules cover various consumer protection requirements and restrictions such as limits on interest rate increases and certain fees. Particularly, Chopra’s comments suggest that the CFPB could pursue tougher restrictions on issuer fees as part of a broader effort to manage what he refers to as “junk fees.” Chopra did not provide a specific definition on what fees the agency may scrutinize, but his responses to inquiries from lawmakers indicates that it could cover a broad array of charges that are imposed on bank accounts, credit cards, and other financial products, such as late fees and other fees that do not compensate for a specific service.

Continue Reading Fintech Legal Report—Week of May 6, 2022

Weekly Fintech Focus

  • The CA DFPI issued an interpretive opinion on an earned wage access product, finding that the structure of the earned wage access program was not a loan product.
  • The CFPB issued a compliance bulletin outlining and reiterating prohibitions and restrictions under ECOA and Regulation B related to the distribution of government benefits

Weekly Fintech Focus

  • The CFPB shuts down an online lender for repeated failures related to deceptive marketing claims.
  • Some major credit bureaus announce plans to incorporate BNPL installment plans in credit reports.
  • FTC Chair Lina Khan provides comments on the CFPB’s inquiry into big tech platforms’ engagement in payments and financial services.


Continue Reading Fintech Legal Report – Week of January 7, 2022

Weekly Fintech Focus

  • The CFPB sent orders to five large BNPL companies seeking information on their business practices and regulatory posture.
  • The CFPB published its Fall 2021 rulemaking agenda, giving some insight into what the next year holds for CFPB activity.
  • The CFPB renewed its call for tech workers to become whistleblowers related to potential violations of consumer financial laws.
  • The CFPB published updated FAQs related to EFTA and Regulation E.


Continue Reading Fintech Legal Report – Week of December 17, 2021