February 2016

CFPB issues policy statement on no-action letters, targets a used car dealer for hidden finance charges, and more in this issue of CFPB Digest

2 min

The CFPB Issues a Final Policy Statement on No-Action Letters for Innovative Products

The Consumer Financial Protection Bureau (CFPB) finalized a new policy that establishes a process for companies to apply for a no-action letter from the Bureau in order to reduce regulatory uncertainty for a new product or service that offers the potential for significant consumer-friendly innovation. The policy is issued in response to changing technologies in the consumer financial market that may not have been envisioned at the time existing statutes and regulations were issued.

Continue reading to learn which factors the CFPB will consider when assessing applications for no-action letters.

CFPB Targets Used Car Dealer, Herbies, for Hiding Auto Finance Charges

The CPFB entered into a consent order with Y King S Corp., which does business as Herbies Auto Sales, to settle alleged violations of the Truth in Lending Act (TILA), Regulation Z, and the Consumer Financial Protection Act of 2010 (CFPA). As a subprime, buy-here, pay-here auto dealer, Herbies sells cars and originates auto loans without selling that loan to a third party. The order states Herbies engaged in abusive financing schemes and misled consumers about the true cost of financing a vehicle.

See how the Herbies consent order illustrates the importance of accuracy in consumer finance.

January 2016 Complaint Snapshot: "Other Financial Services"

The CFPB issued its January 2016 Complaint Snapshot. The Snapshot's national focus covers "other financial service" complaints, a miscellaneous category of consumer complaints that are not specific to any individual financial product, service, or issue. "Other financial services" complaints include complaints regarding debt settlement, check cashing, credit repair, refund anticipation checks, and money orders.

Click here to read an overview of the Bureau's findings.

Upcoming Events:

March 17, 2016: "Navigating Consumer Protection, Complaints and Regulatory Oversight" (LeadsCon Las Vegas)

April 27, 2016: "Legal and Regulatory Update: Spotlight on the Consumer Financial Protection Bureau (CFPB) Regulation of the Debt and Credit Markets" (Financial Counseling Association of America 2016 Conference)