Category Archives: Consumer Financial Protection Bureau (CFPB)

National Association of Attorneys General’s 2023 Consumer Protection Spring Conference

by Courtney M. Dankworth, Avi Gesser, Paul D. Rubin, Jehan A. Patterson, Sam Allaman, and Melissa Muse

From top left to right: Courtney M. Dankworth, Avi Gesser, and Paul D. Rubin.
From bottom left to right: Jehan A. Patterson, Sam Allaman, and Melissa Muse.
(Photos courtesy of Debevoise & Plimpton)

On May 10−12, 2023, the National Association of Attorneys General (the “NAAG”) held its Spring 2023 Consumer Protection Conference to discuss the intersection of consumer protection issues and technology. During the portion of the conference that was open to the public, panels featuring federal and state regulators, private legal practitioners, and industry experts discussed potential legal liabilities and consumer risks related to artificial intelligence (“AI”), online lending, and targeted advertising.

In this Debevoise Update, we recap some of the panels and remarks, which emphasized regulators’ increased scrutiny of the intersection of consumer protection and emerging technologies, focusing on the leading themes from the conference: transparency, fairness, and privacy.

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Federal Agencies Will Jointly Look for Bias and Discrimination in AI

by Bradford Hardin, K.C. Halm, Aisha Smith, and Matt Jedreski

From left to right: Bradford Hardin, K.C. Halm, Aisha Smith, and Matt Jedreski (photos courtesy of David Wright Tremaine LLP)

DOJ, FTC, CFPB, and EEOC Announce Joint Commitment to Use Existing Consumer Protection and Employment Authority to Oversee Use of Artificial Intelligence

On April 25, 2023, the Federal Trade Commission (FTC), the Civil Rights Division of the U.S. Department of Justice (DOJ), the Consumer Financial Protection Bureau (CFPB), and the U.S. Equal Employment Opportunity Commission (EEOC) released a joint statement highlighting their commitment to “vigorously use [their] collective authorities to protect individuals” with respect to artificial intelligence and automated systems (AI), which have the potential to negatively impact civil rights, fair competition, consumer protection, and equal opportunity. These regulators intend to use their existing authority to enforce consumer protection and employment laws, which apply regardless of the technology used for making decisions or delivering products and services. The joint statement outlines several key areas of focus for the agencies – ensuring that AI does not result in discriminatory outcomes, protecting consumers from unfair, deceptive, or abusive acts or practices (UDAAP), preventing anticompetitive practices that may be facilitated or exacerbated by AI, and promoting responsible and transparent development of AI systems. Rather than operate as if AI is unregulated, businesses should ensure their use of AI complies with existing laws and regulations.

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CFPB Issues Policy Statement Taking Expansive View of “Abusive” Practices

by Susanna M. Buergel, Roberto J. Gonzalez, Brad S. Karp, Loretta E. Lynch, Elizabeth M. Sacksteder, Kannon K. Shanmugam, Alexander Beer, and O’Ryan H. Moore

Top row from left to right: Susanna M. Buergel, Roberto J. Gonzalez, Brad S. Karp, and Loretta E. Lynch. Bottom row from left to right: Elizabeth M. Sacksteder, Kannon K. Shanmugam, Alexander Beer, and O’Ryan H. Moore (Photos courtesy of Paul, Weiss, Rifkind, Wharton & Garrison LLP)

On April 3, 2023, the Consumer Financial Protection Bureau (“CFPB”) released a policy statement (the “Policy Statement”) outlining its broad interpretation of the “abusive” component of the prohibition on unfair, deceptive, or abusive acts and practices (“UDAAP”).[1] The Policy Statement replaces a prior statement that adopted a restrained posture towards enforcing the prohibition on abusive acts and practices, which the CFPB rescinded in March 2021.[2]

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CFPB Issues Request for Information on Data Brokers

by Kirk Nahra, Ali Jessani, and Samuel Kane

Left to Right: Kirk Nahra, Ali Jessani, and Samuel Kane (Photos courtesy of Wilmer Cutler Pickering Hale and Dorr LLP)

On Wednesday, March 15, the Consumer Financial Protection Bureau (CFPB) announced an inquiry into data brokers, issuing a “Request for Information Regarding Data Brokers and Other Business Practices Involving the Collection and Sale of Consumer Information.” This request for information (RFI) seeks information about: (1) the data broker market generally, including brokers’ information collection practices, the industry’s effects on consumers, and potential safeguards or controls to regulate data broker activity; and (2) individuals’ experiences in interacting with data brokers. The CFPB intends to use responses to the RFI to inform future rulemaking under the Fair Credit Reporting Act (FCRA). Public comments are due by June 13.

While any issuance by the CFPB of data broker regulations is far from imminent, the CFPB’s RFI is indicative of a growing appetite at both the federal and state levels to bring greater oversight to bear not just on data brokers, specifically, but on commercial uses of personal data more generally — a trend that we have seen on display with recent FTC enforcement actions and rulemaking activities, potential federal privacy legislation, and various state privacy law proposals, to name but a few examples. Continue reading →

Notes from IAPP’s Global Privacy Summit 2023: Skynet Will Not Become Self-Aware (But Still Presents Risks) and the CFPB Seeks to Hold Individuals Accountable

by Joseph Facciponti

Joseph Facciponti (photo courtesy of the author)

The NYU Law Program on Corporate Compliance and Enforcement’s Executive Director attended the International Association of Privacy Professional‘s annual Global Privacy Summit in Washington, D.C., earlier this week. This post provides observations and highlights from the conference.

CFPB Director Rohit Chopra Highlights Priorities for Enforcement Policy, FinTech, and “Dark Patterns”

In a fireside chat, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra outlined key concerns and enforcement priorities for the agency.

On the subject of cryptocurrencies and banking, Director Chopra opined that much of the discussion around crypto was a “distraction” and that one actual source of his concern in this area was the comingling of banking and technology. Using as an example what he characterized as Meta’s “brazen” attempt to create its own currency – the unsuccessful Libra project – he highlighted widely-used technology-driven payment systems such as Apple Pay, Venmo, WeChat Pay, and others as posing potential privacy, safety and soundness, and fairness risks to consumers. For example, with the recent banking crisis as a backdrop, Director Chopra asked what would happen if there was a run on one of these payment systems, and what would happen to any money that consumers had stored with the networks. In a similar vein, Director Chopra inquired about the state of consumers’ rights to dispute fraudulent transactions on digital payment networks, wishing to see something similar to the rights consumers currently have with credit cards.

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CFPB Advisory on Placement Practices May Have Broader Market Implications

by Courtney M. Dankworth, Avi Gesser, Alexandra N. Mogul, Paul D. Rubin, and Jehan A. Patterson

From left to right: Courtney M. Dankworth, Avi Gesser, Paul D. Rubin, Alexandra N. Mogul, and Jehan A. Patterson (photos courtesy of Debevoise & Plimpton LLP)

On February 7, 2023, the Consumer Financial Protection Bureau (the “CFPB”) issued an advisory opinion (the “Advisory Opinion”)[1] on certain digital placement practices, which may have broader market implications. The Advisory Opinion provides that the prohibition on referral fees under section 8 of the Real Estate Settlement Procedures Act (“RESPA”) in real estate transactions that involve federally related mortgage loans extends to operators of websites that allow consumers to compare mortgages and other real estate settlement services.[2] Specifically, if a comparison-shopping website ranks lenders or settlement service providers (or utilizes certain design choices intended to steer consumers’ choices of providers) based on compensation received by the website operator rather than on neutral criteria, that compensation may be considered an unlawful referral fee in the CFPB’s view.

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