Firm Alerts

On July 20, 2022, an amended version of the American Data Privacy and Protection Act (“ADPPA”) was passed out of the House Committee on Energy & Commerce by a 53-2 vote. Some of the major changes made by the Committee since the ADPPA was introduced include specifically granting authority to the California Privacy Protection Agency to enforce the ADPPA in California, shortening the private right of action grace period to 2 years from 4 years and expanding the definition of sensitive covered data to include race, color, ethnicity, religion, union membership and internet browsing history over time and across third party websites, among others. While this is a positive development in the direction of the ADPPA becoming law, the ADPPA will likely undergo many changes before it is passed...

The California Department of Financial Protection (“DFPI”) and Innovation has released a draft text of new rulemaking regarding the scope, reporting and record retention requirements of the Debt Collection Licensing Act (“DCLA”). The proposed rulemaking would exempt from licensure: (i) original creditors who meet certain criteria; (ii) servicers of current debts on behalf of original creditors; (iii) certain healthcare providers, healthcare facilities and hospitals; (iv) student loan servicers; (v) employees of DCLA-licensed debt collectors; (vi) government entities; and (vii) certain public utilities. The most notable change is the proposed exemption for “original creditors.” Under the proposed rulemaking, a creditor seeking, in its own name, repayment of consumer debt arising from...

The Consumer Financial Protection Bureau has issued an advisory opinion interpreting the federal Fair Debt Collection Practices Act to prohibit a debt collector from charging a convenience fee to consumers unless either the agreement creating the debt or applicable law expressly authorize the fee. The advisory opinion interprets 15 U.S.C. § 1692f(1)’s prohibition on collecting “any amount (including any interest, fee, charge or expense incidental to the principal obligation) unless such amount is expressly authorize by the agreement creating the debt or permitted by law.” The CFPB now interprets the provision to prohibit “any amount collected . . . including, but not limited to, any interest, fee charge or expense that is incidental to the principal obligation.” The CFPB also interprets...

In a blog post, Rohit Chopra, Director of the Consumer Financial Protection Bureau (“CFPB”), announced the CFPB’s intent to re-examine and update a broad range of consumer financial regulations. The goal of this re-examination, according to Director Chopra, is the simplification of what he brands an “overly complicated” regulatory landscape. Consequently, the CFPB plans to re-examine landmark rules inherited from other agencies or promulgated in the first decade of the CFPB’s existence, as well as the regulatory implementation of longstanding Congressional directives. The CFPB argues that regulators have historically issued “overly complicated and tailored rules for the existing regulatory landscape.” The CFPB plans to issue instead “bright-line” rules and guidance that “more clearly...

The Consumer Financial Protection Bureau (“CFPB”) issued an Advance Notice of Proposed Rulemaking (“ANPR”) on credit card late payment fees, returned payment fees and the fee safe harbor under Truth in Lending Act, the CARD Act and Regulation Z. The notice asks for comment from credit card issuers, consumer groups and the public, regarding credit card late fees, late payments and card issuers’ revenue and expenses. he request for comment is part of the CFPB’s larger “Junk Fee Initiative.” The CFPB trumpets the request for information as “the first step toward addressing credit card company penalty policies costing consumers $12 billion each year, starting by looking at excessive late fees.” CFPB Director Rohit Chopra has testified before Congress that the CPB intends to revisit and...

The Consumer Financial Protection Bureau (“CFPB”) has taken two actions to encourage state governments to bring enforcement actions for alleged violations of any federal consumer financial laws enforced by the CFPB. First, the CFPB issued an interpretive rule delineating state governments’ authority to enforce federal consumer protection laws. Second, the CFPB began issuing Consumer Financial Protection Circulars, guidance directed at state attorneys general and regulators. The CFPB issued an interpretive rule delineating states’ authority to bring civil suit against alleged (i) unfair, deceptive or abusive acts or practices; (ii) violations the Truth in Lending Act and Regulation Z and (iii) the federal Fair Debt Collection Practices Act and Regulation F. The rule further clarifies that...

On June 3, 2022, a bipartisan group of legislators from the House and Senate announced a data privacy bill titled the American Data Privacy and Protection Act (“ADPPA”). While there are many hurdles the bill must overcome before it is enacted, the bipartisan group of legislators hope this announcement will be the first step towards improving United States privacy laws. The ADPPA contains similar provisions to those in currently enacted state privacy laws. The ADPPA applies to covered entities, meaning (i) any entity that collects, processes or transfers covered data and (a) is subject to the Federal Trade Commission Act; (b) is a common carrier subject to title II of the Communications Act of 1934; or (c) is an organization not organized to carry on business for their own profit or that...

The California Department of Financial Protection and Innovation (“DFPI”) recently released a statement to those applying for a debt collection license under the Debt Collection Licensing Act that application approvals will be delayed. The delay is due at least in part to the Federal Bureau of Investigation informing the DFPI that certain protocols need to be changed with respect to requesting federal background checks. The DFPI encourages those needing a debt collection license to apply through the Nationwide Multistate Licensing System. In a change to its enforcement policy, the DFPI indicated that it will not take action for unlicensed activity against those who apply after December 31, 2021. The DFPI urged applicants to check the DFPI website for updates regarding DFPI’s approval...

On May 27, 2022, the California Consumer Protection Agency (“CCPA”) released a draft of proposed revisions to the California Consumer Privacy Act regulations. While the draft regulations are 66 pages long, the draft does not change the overall regulatory structure. The draft regulations create additional requirements and principles that a business must incorporate in obtaining consumer consent including (i) using a method that is easy to understand, (ii) creating symmetry in choice between more privacy protected and less privacy protected options, (iii) avoiding language or interactive elements that could confuse a consumer, (iv) avoiding manipulative language (guilty or shaming language) and choice architecture, and (v) making the consent easy to execute. Read More

In a recent blog post, the Consumer Financial Protection Bureau (“CFPB”) returned to the topic of Buy Now, Pay Later (“BNPL”) to encourage standardized credit reporting of BNPL lines. BNPL programs typically involve short-term, no-interest consumer credit offered at the point of sale, online and occasionally in brick-and-mortar stores. In December 2021, the CFPB announced an inquiry into BNPL, issuing orders to five major BNPL companies requesting information regarding the risks and benefits of their programs. See our ALERT of Dec. 17, 2021. The inquiry named the accumulation of debt as an area of focus, targeting a concern that lack of credit reporting heightens the potential for people to accumulate debt by making multiple BNPL purchases with multiple companies. Read More