October 29, 2019

Consumer Financial Services Practice Digest

3 min

Supreme Court Reviews Question of CFPB's Constitutionality

The Supreme Court has agreed to hear arguments on the constitutionality of the Consumer Financial Protection Bureau's single-director setup in the case Seila Law LLC v. CFPB. The case comes to the Supreme Court from the U.S. Court of Appeals for the Ninth Circuit, which upheld the for-cause removal provision as one that did not "impede the President's ability to perform his constitutional duty to ensure that the laws are faithfully executed."

Federal Consumer Financial Law Taskforce

The CFPB has announced it will be forming a Taskforce on Federal Consumer Financial Law to examine current regulations and recommend ways to improve federal consumer financial laws, modeled in part on an earlier commission established by the Consumer Credit Protection Act in 1968. The CFPB is currently seeking taskforce members who have demonstrated records of senior public service and expertise in consumer finance.

Congress Reviews CFPB Semi-Annual Report

The House Financial Services Committee and the Senate Banking Committee heard testimony from CFPB Director Kathy Kraninger regarding the Bureau’s Semi-Annual Report to Congress, in hearings on October 16 and October 17, respectively. Topics raised by members of Congress included consumer redress in CFPB consent orders and settlements, the Bureau’s supervision of student loan servicers, and proposed revisions to the Payday Rule, as well as the constitutionality of the Bureau’s structure.

Debt Services Advertising: Major Search Engine to Require BK Counseling Approval and Certification

Online advertising, including lead generation, occupies a special place in connecting consumers with financial products and services. Beginning in November, however, the ability of some consumers to learn about debt services (debt settlement and debt management plans) will be restricted by Google, according to a recent posting and update to Google's Advertising Policies for the U.S.

The CFPB's Consumer Complaint Database: Staying Public, but Not Staying the Same

The CFPB's Consumer Complaint Database will remain publicly available, but will contain modified disclaimers that seek to add context to the complaints. It remains to be seen whether the new changes will strike an effective and satisfactory balance—between consumer protection principles and mitigating the concerns identified by financial institutions.

Chasing Efficiency: CSBS Issues Draft Model Language for State MSB Laws

It is no exaggeration to say that the entire money services industry has changed in the last 15 years, but the Uniform Law Commission last revised the Uniform Money Services Act (UMSA) in 2004. The Conference of State Banking Supervisors (CSBS) recently requested public comment on its Draft Model Language (Model Law) for state laws that regulate money services businesses (MSBs), including money transmitters. If implemented by the states, the Model Law would standardize and streamline the licensing process and promote consistent regulation for MSBs.

New Requirements for Subscription Merchants Accepting Visa Cards

Subscription merchants that take payment by Visa cards will have new acceptance, disclosure, and cancellation requirements imposed on their transactions beginning April 18, 2020. As Visa recently announced, the card brand is updating its rules for merchants that offer free trials or introductory offers as part of an ongoing subscription program.

Lead Generation Advertising Compliance "Lessons"

Law enforcement, workshops, and reports from the Federal Trade Commission (FTC) have yielded five "lessons" for lead generation advertisers, according to an article that was published last month in Law360 by Andrew Smith, director of the FTC Bureau of Consumer Protection. In it, he suggests that companies that purchase lead generation advertising must manage lead generators responsibly, just like manufacturers that make supply chain management a top priority.