April 05, 2022

Consumer Financial Services Practice Digest

4 min

Legal and Regulatory Developments

Repeat Offenders, Beware! CFPB Director Announces Enforcement Strategy; Takes Shot at Financial Services Regulators of the Past

CFPB Director Rohit Chopra has signaled that he is ready to take on corporate recidivism in the financial services industry. He gave the University of Pennsylvania Program on Regulation's 11th Annual Distinguished Lecture, "Reining in Repeat Offenders," on March 28, 2022. Chopra offered his thoughts about the measures CFPB and other agencies could take to curb repeat violations of financial services laws.

CFPB Bulletin on UDAAPs That Impede Consumer Reviews

The Consumer Financial Protection Bureau (CFPB) issued a compliance bulletin regarding potentially illegal practices related to consumer reviews. The bulletin seeks to promote reviews about financial products and services that accurately reflect consumer opinions and experiences. The guidance also warns that practices like posting fake reviews or inserting clauses that forbid a customer from publishing an honest review may be a UDAAP under the Consumer Financial Protection Act (CFPA).

CFPB Officially Adds UDAAP to Its Anti-Discrimination Tool Kit

The CFPB intends to use its authority under the Consumer Financial Protection Act to identify, prohibit, and prosecute discrimination as a UDAAP—an "unfair" act or practice in any financial services category, whether it be banking (including deposits), servicing, collections, credit reporting, payments, or money transfers and remittances. The CFPB will focus on financial institutions' decision-making in advertising, pricing, and other areas to ensure that companies are appropriately testing for and eliminating illegal discrimination.

The CFPB Warns Companies Against Impeding or Manipulating Honest Customer Reviews

In a bulletin published last week, the Consumer Financial Protection Bureau (CFPB) warned banks and other financial companies against impeding honest reviews of consumer financial products and services. Although it does not cite a specific study for financial products and services, the CFPB's bulletin describes how online reviews impact other industries across the economy.

Biden Tasks Consumer Protection Agencies with Stepping Up Cryptocurrency Oversight

In its much-anticipated cryptocurrency executive order issued earlier this month, the Biden administration called for a coordinated interagency approach to the regulation of digital assets and to the study of their potential risks.

How Negative Option Marketing Can Risk Entangling Third-Party Banks and Payment Processors

Payment processors and financial institutions are caught in the crosshairs of court-appointed receivers for their relationships with companies engaged in allegedly unlawful "negative option" marketing. Recently, two FTC enforcement actions in the Central and Southern Districts of California highlight the risk of processing for negative option marketers.

Burning Down the House: FTC Accuses HomeAdvisor, Inc. of Deception in Selling Leads for Home Improvement Projects

On Friday, March 11, the Federal Trade Commission (FTC) filed an administrative complaint against HomeAdvisor, Inc., charging it with using deceptive and misleading tactics to sell leads for home improvement projects to small businesses, including small "gig-economy" workers. The action underscores the current administration's effort to protect workers, especially those engaged in the gig economy through large platforms.

U.S. Economic Sanctions: Enforcement Strategy Against Russia Takes Shape

This alert summarizes the state of the U.S. sanctions regimes against Russia and Belarus, provides information concerning sanctions imposed by other countries, and outlines the United States' activities, internationally and domestically, to enforce the sanctions.

Russia and Sanctions: What Happens Next? Compliance and Enforcement

Now that the United States and its allies have deployed many of their available financial and trade weapons in support of Ukraine against Russia's invasion, what happens next? Perhaps more than any other U.S. sanctions program, the one currently imposed against Russia reflects a "whole of government" approach involving many federal agencies. This alert summarizes the U.S. government's enforcement tools that can be used to encourage compliance with the sanctions imposed against Russia. It also provides U.S. companies and individuals ("U.S. persons") with guidelines to use in establishing and monitoring their own compliance activities.

Treasury Expands Russia-Related General Licenses and Sanctions Against Russian Individuals and Entities

This alert provides an overview of the general licenses and FAQs issued by the Office of Foreign Assets Control (OFAC) through March 4, 2022, and the expansion of the Specially Designated Nationals List on March 3, 2022. It builds upon our alerts of February 22, 2022; February 23, 2022; and March 2, 2022.