Welcome to Wiley’s update on recent developments and
what’s next in consumer protection at the Consumer Financial
Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this
newsletter, we analyze recent regulatory announcements, recap key
enforcement actions, and preview upcoming deadlines and events. We
also include links to our articles, blogs, and webinars with more
analysis in these areas. We understand that keeping on top of the
rapidly evolving regulatory landscape is more important than ever
for businesses seeking to offer new and groundbreaking
technologies. Please reach out if there are other topics you’d
like to see us cover or for any additional information.
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Regulatory Announcements
CFPB Issues Summer 2023 Supervisory Highlights
Report. On July 26the CFPB released a
Supervisory Highlights report covering
examination findings in the areas of auto origination, auto
servicing, consumer reporting, debt collection, deposits, fair
lending, information technology, mortgage origination, mortgage
servicing, payday and small dollar lending, and remittances, that
were completed from July 1, 2022, to March 31, 2023. Among other
things, the Supervisory Highlights report concluded that some auto
loan servicers allegedly charged fraudulent interest on inflated
balances, cancelled automatic payments without sufficient notice,
and engaged in illegal collection practices after repossession. The
report also concluded that some debt collectors continued
collection attempts for work-related medical debt after receiving
sufficient information to deem the debt uncollectible under state
worker’s compensation laws. It also concluded that some payday
lenders allegedly placed language in loan agreements that
impermissibly prohibited consumers from revoking consent to be
contacted via call, text, or e-mail, regarding collection of an
outstanding balance.
U.S. Department of Education Issues Final Interpretation
Regarding Preemption of State Laws by the Higher Education
Act. On July 24the U.S. Department of
Education published a final interpretation under the Higher
Education Act (HEA) finding that “except in the limited and
specific instances set forth in the HEA itself, State measures to
engage in oversight, require actions of, or otherwise regulate the
conduct of Federal student loan servicers are not expressly
preempted by the HEA.” Additionally, the final interpretation
notes that “collaboration with the States can supply the means
to ensure better oversight of these contractors and provide more
protection for student loan borrowers.”
Recent Enforcement Actions
FTC and Arkansas Settle with Investment Program and its
Owners Regarding Alleged Pyramid Scheme. On July
26the FTC and the State of Arkansas filed a stipulated order against Blessing in No Time
(BINT) and its owners, LaShonda Moore and Marlon Moore, in the U.S.
District Court for the Eastern District of Arkansas, settling
allegations that BINT operated an illegal pyramid scheme –
“Blessing Loom” – that defrauded thousands of
consumers of tens of millions of dollars. In the complaint, filed June 16, 2021, the FTC and
Arkansas alleged that BINT promised investors returns as high as
800% and required that members pay as much as $62,700 to
participate, yet the vast majority of participants lost all or most
of the money they invested. The defendants have agreed to
injunctive relief and will pay $450,000, which will be used to
refund affected consumers.
CFPB Sues Auto-Loan Servicer for Allegedly Deceptive
Loan Practices. On August 2the CFPB
filed a complaint in the U.S. District Court for the
Northern District of Georgia against USASF Servicing for allegedly
engaging in loan servicing practices in violation of the Consumer
Financial Protection Act. The CFPB alleges that USAF remotely
disabled cars or repossessed vehicles of consumers not eligible for
such actions, failed to provide customers the financial benefits
from paying off their loans early, and double-billed approximately
34,000 consumers. The CFPB is requesting a permanent injunction in
addition to both monetary relief and civil money penalties.
Upcoming Comment Deadlines and Events
FTC Seeking Comment on Revisions to Health Breach
Notification Rule. Comments are due August 8 on the
FTC’s Notice of Proposed Rulemaking to Amend the Health
Breach Notification Rule?(HBNR NPRM). Among other proposals,
the HBNR NPRM proposes to update the HBNR in regard to the
rule’s coverage of mental health apps and other technologies
that collect location and browsing history data. The HBNR NPRM also
proposes, among other things, that the definition of “breach
of security” under the rule includes an unauthorized
acquisition of identifiable health information that occurs as a
result of a data security breach or an unauthorized disclosure, and
therefore does not limit reportable incidents to
“cybersecurity intrusions or nefarious behavior.”
FTC to Host Workshop on Proposed Changes to the Funeral
Rule. On September 7the FTC will host a
public workshop on the changes to its Funeral Rule proposed in its
Advance Notice of Proposed Rulemaking. The
workshop will cover a number of topics including, among other
things, online or electronic disclosures of price information, the
general price list required by the Funeral Rule, and whether
funeral providers should be required to give out general price
lists in languages other than English. The public can submit
comments on the topics to be covered in the workshop until
October 10. Instructions for filing comments will
be published in the Federal Register.
CFPB, HHS, and Treasury Seek Comment on Medical Payment
Products. Comments are due September 11 on the
RFI issued by the CFPB, HHS, and U.S. Department of Treasury
seeking information about the prevalence of medical credit cards
and installment loans that are offered to patients as a way to pay
for medical care. The agencies specifically request information
about the specialty medical payment market and associated data on
interest fees and costs for medical credit products, patient
experiences with medical credit cards and installment loans, issues
with patient billing and collections, and any incentives that
health care providers have to offer medical credit cards and
installment loans.
FTC Seeks Comment on Amendments to Premerger
Notification Rules and Premerger Notification and Report Form and
Instructions. Comments are due September
27 (extended from August 28) on the FTC’s NPRM
proposing to amend the premerger notification rules that implement
the Hart-Scott-Rodino Antitrust Improvements Act, and the Premerger
Notification and Report Form and Instructions. If adopted, the
FTC’s NPRM proposals would substantially expand the amount of
information that covered entities must submit to the agency about
potential transactions.
FTC Solicits Comment on NPRM Proposing to Classify
Certain Consumer Review and Testimonial Practices as Unfair or
Deceptive. Comments are due September 29 on an NPRM that, if adopted, would classify certain
consumer review and testimonial practices as unfair or deceptive
practices under Section 5 of the FTC Act. Advertising practices
that the NPRM proposes to classify as “unfair” or
“deceptive” include (1) selling or obtaining
“fake” consumer reviews; (2) repurposing consumer reviews
or “review hijacking”; (3) purchasing positive or
negative reviews; (4) permitting insider reviews and testimonials
without adequate disclosure; (5) representing that
company-controlled review websites or entities are independent; (6)
review suppression; and (7) misuse of fake social media influence
indicators.
FTC Issues Supplemental Proposed Amendments to Testing
Methods Under the Amplifier Rule. On July
25the FTC issued a Supplemental Notice of Proposed Rulemaking
(SNPRM) proposing amendments to the agency’s Amplifier Rule.
The Amplifier Rule, formally known as the Rule Relating to Power
Output Claims for Amplifiers Utilized in Home Entertainment
Products, regulates power output claims for home entertainment
amplifiers. The SNPRM proposes to amend the Amplifier Rule to,
among other things, set standard test conditions for measuring
amplifier power output; clarify which power output disclosures
comply with the Amplifier Rule and which do not; and to revise
language in the rule related to these proposed modifications.
Comments on the SNPRM are due 60 days after publication in the
Federal Register.
More Analysis from Wiley
Wiley Wins Four Law360 ‘Practice
Group of the Year’ Awards for 2022
FTC and HHS Caution Hospitals and Telehealth
Providers on Tracking Tech
Biden Administration Looks at Harmonizing Cyber
Regulations Amidst Flurry of New Activity
Coming Soon: New Cyber Labeling Program for IoT
Devices
Podcast: The FTC Safeguards Rule: A Deep Dive into the
Revisions Effective June 9, 2023
Webinar: How to Keep Up with the Influx of New State
Privacy Laws and Regulations
Podcast: What could AI regulation in the US look
like?
The FTC Is Targeting Crypto Too – With a
Significant New Enforcement Action
California privacy law changes draw in more
businesses
U.S. Fulfills Its Commitments to Implement the
EU-U.S. Data Privacy Framework
Companies May Begin Submitting EU-U.S. Data
Privacy Framework Certifications
European Commission Adopts EU-U.S. Data Privacy
Framework Adequacy Decision
California AG Initiates CCPA Investigations,
Despite Setback in Court
A New White House Project on Responsible AI Sends
a Message to the Private Sector, Including Contractors
Podcast: AI: The Next Big Thing in Government
Contracting
FCC Launches Privacy and Data Protection Task
Force
Initial Takeaways on the FCC’s New Privacy and
Data Protection Task Force
FTC Issues Policy Statement on Biometric
Information, Signaling a New Enforcement Priority
FTC Joins the Cloud Security Discussion
5 Takeaways From Recent CFPB, FTC Equal Credit
Push
Podcast: AI Risk Management: A Discussion with NIST’s
Elham Tabassi on the NIST AI Risk Management Framework
Generative AI Policies: Five Key Considerations
for Companies to Weigh Before Using Generative AI Tools
Federal Legislators Are Taking AI Implementation
and Oversight Seriously
NIST Announces Generative AI Working Group
Webinar: Staying Ahead of State Privacy Laws: Tips and Best
Practices for Building Compliant Strategies for Five Key
States
Podcast: State Privacy Laws and Federal Government
Contractors
Duane Pozza Named a Cryptocurrency and Fintech
‘Trailblazer’ by The National Law Journal
U.S. State Privacy Law Guide
Legal 500 US Recognizes Wiley’s Telecom, Media
& Technology Practice as Tier 1. Read more here.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
