With the passage of the Consumer Financial Protection Act of 2010 and the creation of the Consumer Financial Protection Bureau, Congress has created a federal system of consumer financial services regulation for both banks and nonbank lenders, mortgage originators and servicers, credit reporting agencies, debt collectors and payment and money transmitters. For the first time, nonbanks are subject to intensive, bank-like federal regulation of their consumer financial operations.
CFPA Guide, edited by Eversheds Sutherland lawyer Knox Dobbins, provides analysis of the Consumer Financial Protection Act, actions and rulemaking by the CFPB and legacy bank regulators, as well as legislative, judicial and other developments in consumer financial services. As background to recent developments, the site includes selected commentary from The Consumer Financial Protection Act of 2010 – An Annotated Guide by Knox Dobbins and Jason Stone (published by North Law Publishers, Inc.).
How to order the Dobbins-Stone Guide?
The Consumer Financial Protection Act of 2010 - An Annotated Guide is published by North Law Publishers, Inc. It can be purchased in hard copy with lay-flat spiral binding or as a searchable PDF download, licensed for up to three computers in the same office, for $75 (the print copy price includes postage). The Guide can be ordered from the North Law Publishers, Inc. website. Phone orders may be made by calling (646) 368-6328.
Federal system of consumer financial services
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Consumer Financial Protection Bureau releases:
CFPB Proposes Rule to Establish Public Registry of Terms and Conditions in Form Contracts That Claim to Waive or Limit Consumer Rights and Protections
January 11, 2023
CFPB Issues Advisory Opinion on Coverage of Fair Lending Laws
May 9, 2022
CFPB Targets Unfair Discrimination in Consumer Finance
March 16, 2022
Consumer Financial Protection Bureau Rescinds Abusiveness Policy Statement to Better Protect Consumers
March 11, 2021
CFPB Clarifies That Discrimination by Lenders on the Basis of Sexual Orientation and Gender Identity Is Illegal
March 9, 2021
Statement of the Bureau of Consumer Financial Protection on enactment of S.J. Res. 57
May 21, 2018
CFPB Issues Rule to Ban Companies From Using Arbitration Clauses to Deny Groups of People Their Day in Court
July 10, 2017
CFPB Presses Crackdown on Add-on Products
August 25, 2016
New Protections Would Limit Collector Contact and Help Ensure the Correct Debt is Collected
July 28, 2016
Fifth Circuit Invalidates CFPB's Payday Lender Rule, Holds CFPB Funding Mechanism Unconstitutional.
On October 19, 2022, the Fifth Circuit Court of Appeals held that the funding mechanism for the CFPB violates the Constitution’s structural separation of powers. Specifically, in Community Financial Services Association of America, Ltd. v. CFPB, the court held that the CFPB’s direct funding from the Federal Reserve, outside the congressional appropriations process, violates the Constitution's Appropriations Clause. The court rejected other statutory and constitutional challenges to the rule, but the result is that the rule is invalidated because the rule was not promulgated with congressionally appropriated funds. The CFPB has stated that it will appeal. View the opinion.
US Chamber, Trade Groups Seek Injunction against CFPB’s Expansive Fair Lending Examination Policy
On September 28, 2022 the US Chamber of Commerce and several banking industry groups filed an action in the Eastern District of Texas seeking to enjoin enforcement of the CFPB’s announced update to its examination manual (March 16, 2022) setting out its view that discriminatory conduct that may not violate fair lending laws may nonetheless constitute unfair or deceptive or abusive actions prohibited by the Dodd-Frank Act. The complaint alleges that the CFPB’s position exceeds its authority under the Act and violates the Administrative Procedure Act in various respects.
CFPB Signals Back to the Future for Abusive-Act Enforcement
On March 11, 2021, in another signal of its new management, the CFPB rescinded Trump-era guidance on abusive acts or practices prohibited by section 1031(d) of the Dodd-Frank Act. “Going forward, the CFPB intends to exercise its supervisory and enforcement authority consistent with the full scope of its statutory authority under the Dodd-Frank Act as established by Congress,” the bureau stated in its release. Specifically, the bureau revoked its January 24, 2020 policy statement, “Statement of Policy Regarding Prohibition on Abusive Acts or Practices.”
CFPB Extends Fair Lending Protections to Sexual Orientation and Gender Identity
On March 9, 2021, the CFPB issued an interpretive rule clarifying that the prohibition against sex discrimination under the Equal Credit Opportunity Act (ECOA) and Regulation B includes sexual orientation discrimination and gender identity discrimination. The bureau cited as authority the U.S. Supreme Court’s decision in Bostock v. Clayton County, Georgia, 140 S. Ct. 1731(2020), holding that the prohibition against sex discrimination in Title VII of the Civil Rights Act of 1964 encompasses sexual orientation discrimination and gender identity discrimination.
CFPB Survives Constitutional Challenge
On June 29, 2020, the Supreme Court held that the provision restricting the circumstances under which the president could remove the director of the Consumer Financial Protection Bureau was constitutionally infirm on separation-of-powers grounds, but that the restrictions were severable and thus the bureau’s actions were not invalidated. Seila Law LLC v. Consumer Financial Protection Bureau, No. 19-7. The single-director structure was a focus of the court’s analysis, and a key basis for distinguishing contrary precedents involving other agencies. Four justices dissented from the constitutional violation holding but concurred in the severability holding.
Supreme Court to review challenge to CFPB structure
On October 18, 2019, the Supreme Court granted certiorari to review the Ninth Circuit's decision in Consumer Financial Protection Bureau v. Seila Law LLC, which rejected a constitutional challenge to the single-director structure of the CFPB, under which the president can remove the director only for cause. The case, no. 19-7, will be argued this term. The CFPB has switched positions in the controversy and now argues, in a brief filed by the Solicitor General, that the structure is unconstitutional but that the defect is severable. On October 23, 2019, the Court appointed Paul Clement as amicus curiae to defend the agency's structure.
Full DC Circuit Upholds CFPB Structure
In PHH Corp. v. CFPB, 2018 WL 627055 (Jan. 31, 2018), the en banc DC Circuit Court of Appeals held that providing the CFPB director with a five-year term of office subject to removal by the President only for “inefficiency, neglect of duty, or malfeasance in office” did not violate Article II of the Constitution. View the opinion.
Congress Blocks CFPB Arbitration Rule
On November 1, 2017, President Trump signed a joint resolution of Congress (H.J. Res. 111) made under the Congressional Review Act blocking the CFPB’s arbitration rule, which would have barred provisions in arbitration agreements that prohibited consumers of financial services from participating in class actions. The move returns questions regarding the enforceability of consumer arbitration agreements to the courts.
DC Circuit Holds CFPB Structure Unconstitutional
OCT 11, 2016