Wiley Consumer Protection Download (December 7, 2020) | Wiley Rain LLP

Stay tuned for Willie’s update on the latest developments and what’s next in consumer protection at the Consumer Financial Protection Bureau (CFPP) and the Federal Trade Commission (FDC). In this newsletter, we analyze the latest regulatory announcements, retrieve key enforcement actions, and preview upcoming deadlines and events. We understand that for businesses seeking to provide new and groundbreaking technologies, keeping up with the fast-growing regulatory landscape is more important than ever.

Regulatory notices

CFPB issues using credit pricing and writing AI NAL. Ann November 30, Published by the Consumer Financial Protection Bureau (CFPP) a No Action Letter (NAL) Upstart Network, Inc. (Upstart), related to its Artificial Intelligence (AI) model for writing and pricing loan applicants for unsecured, closed-end loans. As long as the letter is in effect, the Company will not make supervisory discoveries or bring any oversight or enforcement action against the Company under the Equal Credit Law and Regulation B, or its unreasonable, deceptive, or misconduct authority (UDAAP), the model described in its application About any discrimination that may arise from the use. NALs can provide enhanced regulatory assurance that the CFPB will not bring an oversight or enforcement action against them under certain facts and circumstances.

The CFPB finalizes the advisory policy and announces two new consultative ideas. Ann November 30, CFPB released its final match Policy on consulting ideas (Policy) Allows companies wishing to comply with agency regulatory requirements to submit requests to the CFPB. The CFPB reviews the submissions received, prioritizes requests for answers and publishes comments with an explanation of the incoming request. In addition, the CFPB may publish comments on its own initiative. The CFPB issued two advisory comments on November 30. First Earned pay access products, Which has recently emerged in the market as a way to meet short-term cash flow requirements between payroll checks. The second relates to whether some education loan products that refinance pre-existing consumer education loan meet the definition. “Private Education Loan” Under the law and regulatory music of lending.

The CFP publishes the Ombudsman’s Annual Report. Ann December 3, CFPB released its year Ombudsman Office Report The report describes the agency’s involvement with consumer and industrial partners during corona virus (COVID-19) infections. In addition, it shares information with personal inquiries received by the office and related analysis and data. The 2020 Report also discusses common misconceptions heard by the CFPB’s Ombudsman’s Office about the CFPB’s consumer complaint process, and includes (1) discussions about the CFPB’s work.[c]Explanations surrounding the CFPB’s announcement and procedures for small business debt discrimination complaints ”and (2)“[i]Provides CFPB during and after exams. “

Director Groninger makes comments at the Education Research Council meeting. Ann November 23, Director Kathy Groninger presented comments before the CFPB’s Education Research Council, which advises the CFPB on what kind of research the company should do on consumer finance products or services. Director Groninger’s talk focused on small business credit data and research, credit report accuracy and the use of alternative credit data.

Significant enforcement actions

CFPP sues online lender for breach of MLA Ann December 4, CFPB filed a Complaint Lentup Loans, LLC (Lentup), in U.S. District Court for the Northern District of California. Lentup is an online lender that offers customers single payment and installment loans. The CFPPA alleges that Lentap violated the Military Credit Act (MLA) in providing more than 4,000 single-installment or installment loans to more than 1,200 borrowers. In particular, the CFPP accuses the Lentup MLA of violating the 36% annual rate and failing to make the necessary legal disclosures. CFPP seeks damages, contempt and civil penalties.

FTC settles with VoIP provider over telemarketing calls. Ann December 3, Federal Trade Commission (FTC) Announced Alcazar Networks Inc., provider of Voice over Internet Protocol (VoIP). In particular, the FTC’s Complaint, Filed in U.S. District Court for the Central District of Florida, accusing Alcசர்zar of facilitating illegal robotics in violation of the FDC’s telemarketing sales rule. Furthermore, the FDC said that Alcazar continued to do so after learning that robotics were communicating numbers in the FDC’s Do Not Call registry. In addition, the FTC accused Alcazar of providing VoIP services to a company that fraudulently portrayed “911” in the caller ID industry and impersonated calls like Social Security Administration. The solution requires Alcazar to provide 105,562 cash judgments and develop customer screening procedures.

CFPP files case against debt settlement company. Ann December 1, CFPB filed a Complaint DMP Financial, LLC (DMP), is suing the U.S. District Court for Massachusetts in a lawsuit seeking to reconsider, settle, or change the terms of unsecured loans to be paid by consumers. The CFPP has accused the DMP of engaging in fraudulent activities or practices in violation of the Telemarketing Sales Act (DSR) and the Consumer Financial Protection Act of 2010 (CFPA). 30,000 consumers. The CFPB’s complaint seeks a civil currency fine and a restraining order.

The FTC is said to have suspended “debt stoppage” procedures. Ann November 30, FTC Announced A solution with debt collection company Midwest Recovery Systems (Midwest Recovery), which prevents the company from engaging in a “debt stoppage,” which the company describes as occurring when an actor forces fake or highly questionable loans into consumer credit statements. Pay off outstanding debts. The FTC first filed one Complaint In midwife recovery in November in U.S. District Court for the Eastern District of Missouri, the company accused the company of extorting more than $ 24 million from consumers through a debt freeze. The complaint alleges that the action violates the Federal Trade Commission Act, the Fair Debt Collection Procedures Act, the Fair Credit Reporting Act (FCRA) and the FCRA Furnishers Act. The solution is to contact Midwest Redemption Credit Reporting Agents and request that all reported debt be removed from the consumer’s credit statements. Finally, the settlement includes a $ 24.3 million cash settlement.

Upcoming feedback deadline and events

FTC is seeking feedback on the Prescreen Disclaimer Notice Rule. Comments are appropriate December 7 Of the FTC Review The Prescreen Deviation Notice Rule is part of the agency’s formal review of its current guidelines and regulations. The Prescreen Exclusion Notice Rule states that individuals who use consumer statements to provide unsolicited guarantees of credit or insurance must provide a clear statement with any written offer informing the consumer that information from their statement regarding the transaction has been used. The person using the statement must notify the consumer that they have the right to prohibit the use of consumer reporting information in any transaction and that they may opt out by notice. The FTC proposes to limit the pre-screen deviation notification rule for motor vehicle dealers under the Dot-Frank Act.

FTC requests input on affiliate marketing rules. Comments are appropriate December 7 Of the FTC Review All rules and guidelines are part of the agency’s review of the Link Marketing Rule. In addition, the FDC proposes to amend the Sub-Marketing Rule to relate to changes made in the FCRA by the Dot-Frank Act. The Marketing Marketing Rule of the Fair and Accurate Credit Transactions Act 2003 (FACT Act) gives consumers the right to prevent the consumer from using consumer information obtained by a subsidiary to make requests. In particular, if a person or company receives consumer eligibility information from a business liaison, that person or company cannot request that information unless the consumer is granted the right to use such information. The FTC proposes to amend the Marketing Marketing Rule to limit its regulatory limit to motor vehicle dealers under the Dot-Frank Act.

FTC requests comment on furniture rule. Comments are appropriate December 14 A The proposed rule As part of the review of all agency regulations and guidelines, the FDC’s information providers’ obligations relate to the Consumer Reporting Agent Rule (Furnisher Rule). The FDC proposes to amend the Furnishings Act in relation to changes made to the FCRA by the Dot-Frank Act. Furnisher rule requires that consumer reporting providers develop reasonable written policies and procedures regarding the accuracy of consumer-related information provided to the consumer reporting agency. The proposed rule by the FTC would reduce the scope of the furniture rule for companies specified in the Dot-Frank Act for engaging in the sale and service of motor vehicles.

FTC requests input on risk-based pricing rule. Comments are appropriate December 22 Of the FTC Notice forming the proposed rule (NPRM) Regarding the obligations of creditors regarding risk-based pricing (risk-based pricing) as part of a review of all agency regulations and guidelines. Risk-based pricing is the practice of modifying the terms and conditions of credit or extended credit granted to a particular consumer to demonstrate the consumer’s unpaid risk. The risk-based pricing rule, which represents a rule of the FCRA, requires that when a person uses a consumer statement to extend credit, a consumer must provide a risk-based pricing statement, and in a much less materially favorable terms to a significant proportion of borrowers Positive words are available. In addition, the FDC proposes to amend the risk-based pricing rules in relation to changes made in the FCRA by the Dot-Frank Act.

Agents should comment on the role of supervisory guidance. Comments are appropriate January 4 A NPRM 2018 by the Office of the Monitor Controller, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration and CFPP (Jointly, Agencies) Interactive report clarifying the role of supervisory guidance (2018 Report). In encoding the 2018 report, NPRM will ensure that agents wish to respect the limitations of the Management Act in fulfilling supervisory responsibilities. Accordingly, supervisory guidance does not create legal obligations to the public.