Tag Archives: Consumer Financial Protection Bureau (CFPB)

DC Court of Appeals Rules CFPB’s Structure is Unconstitutional

On October 11, 2016, the United States Court of Appeals for the District of Columbia Circuit ruled that the Consumer Financial Protection Bureau’s (CFPB) structure is unconstitutional. PHH Corporation v. Consumer Financial Protection Bureau, No. 15-1177, 2016 WL 5898801 (D.C. Cir. Oct. 11, 2016). Unlike most independent agencies, which contain multi-member structures to check against arbitrary decision-making and abuse of power, the CFPB is an independent agency lead by a single Director subject only to for-cause removal by the President of the United States under the Dodd-Frank Act. The Court of Appeals observed that this structure “represents a gross departure …

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CFPB Proposes Ban on Class Action Waiver Provisions in Arbitration Agreements

On May 5, 2016, the Consumer Financial Protection Bureau (CFPB) announced proposed regulations that would prohibit financial service providers from using arbitration clauses that prevent consumers from bringing class action lawsuits. Under the CFPB’s proposal, companies would still be able to include arbitration clauses in their contracts, but the clauses would be required to expressly state that they cannot be used to prevent consumers from being part of a class action lawsuit. In addition to the ban on class action waivers in consumer arbitration agreements, the proposed regulations would require companies that arbitrate disputes with consumers to submit information regarding …

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The Perils of Success: Recent Regulatory Focus Heightens Potential For Future Risk

Two recent regulatory actions – one by the Consumer Financial Protection Bureau, the other by the California Department of Business Oversight – highlight the increased scrutiny facing marketplace lenders from a consumer protection perspective. Companies involved in the marketplace lending industry will likely face additional regulatory inquiries and heightened scrutiny throughout the remainder of 2016, as the industry’s relationship with government regulators on all levels continues to evolve. As marketplace lenders continue to generate greater interest from both consumers and traditional financial services companies, so too will these lenders face rising regulatory risks. CFPB Inquiry Earlier this month, the CFPB …

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