Consumer Finance Monitor

Today’s podcast show is a repurposing of Alan Kaplinsky’s “fireside chat” with Matthew J. Platkin, the New Jersey Attorney General, which was the first half of a webinar we produced on January 17, 2025. That webinar was Part 3 of our webinar series entitled “The Impact of the Election on the CFPB and Others.” In Part 3, we focus on the role of state attorneys general in a rapidly shifting CFPB environment. The importance of Part 3 is underscored by the recent actions taken by President Trump to fire Rohit Chopra as Director of the CFPB and to appoint new Treasury Secretary, Scott Bessent, and then new Office of Management and Budget (OMB) Director, Russell Vought, as Acting Directors. Messrs, Bessent, and Vought have essentially temporarily stopped all activities of the CFPB for the time being. During our “fireside chat” with General Platkin, we discussed the following topics, among others: 1.               What is General Platkin’s background, including his stint as Chief Counsel to the New Jersey Governor? 2.               Since General Platkin has been New Jersey Attorney General, what are some examples of the consent orders or lawsuits he has initiated related to consumer financial services? 3.               Has the New Jersey Attorney General previously collaborated with the CFPB and/or FTC in investigating certain companies or segments of the consumer financial services industry, and is that likely to change? 4.               What effect will there be on consumers in New Jersey if President Trump appoints (as he did) an Acting Director of the CFPB whose interpretation and enforcement of federal consumer protection laws differs markedly from Rohit Chopra? 5.               What will the New Jersey Attorney General’s office do in response to this anticipated shifting CFPB environment? 6.               Elon Musk has called for the deletion of the CFPB and Project 2025 has also called for the elimination of the CFPB. If that were to happen, what would the New Jersey Attorney General’s office do to fill this anticipated void? 7.               We then looked beyond New Jersey to other state attorney general’s offices similarly situated to the New Jersey Attorney General office – who will have the need to initiate more cases when resources are limited. We discussed how state Attorney General’s (including the New Jersey Attorney General) have networked with each other to investigate and sue companies that are violating consumers’ rights in multiple states. We then discussed why it is anticipated that the networking process is likely to increase. 8.               The areas of consumer financial protection law and segments of the consumer financial services industry that will be areas of focus for the New Jersey Attorney General during 2025? Our next episode will be the second half of our January 17 webinar in which several of our colleagues will explore in depth why we expect state Attorney General’s offices to significantly ramp up their investigations involving and lawsuits filed against banks and other consumer financial services providers. Parts 1, 2 and 3 of our webinar series appear here, here, and here. Our podcast shows (repurposing Parts 1 and 2 of our webinar series) appear here, here, here, and here. The title of Part 1 is: “The Impact of the election on the CFPB: Regulations and other written guidance, which featured Alan Kaplinsky’s “fireside chat” with David Silberman who held senior positions at the CFPB for almost 10 years during the Directorships of Cordray, Mulvaney, and Kraninger. Part 2 is: “The Impact of the Election on the CFPB: Supervision and Enforcement, which featured Alan Kaplinsky’s “fireside chat” with former Director Kathy Kraninger during Trump‘s first term in office.

Today’s podcast show features a discussion with Julie Andersen Hill about her law review article titled “Regulating Bank Reputation Risk”, 54 GA. L. Rev. 523 (2023). Professor Hill is the Dean and Wyoming Excellence Chair of the University of Wyoming College of Law. The abstract to Professor Hill’s article does an excellent job of summarizing her thesis: This Article surveys reputation risk guidance and enforcement efforts. It shows that reputation risk regulation is usually an ancillary consideration to credit risk, operational risk, or other primary risk. In these instances, reputation risk adds little because regulators have strong tools to address the root problems. Sometimes, however, regulators justify guidance or enforcement primarily in terms of controlling reputation risk. Regulators use reputation risk to weigh in on hot-button political topics afield from safety and soundness like gun rights, payday lending and fossil fuels. Because regulators believe that reputation risk is present in every facet of banking, little prevents them from using it to address other controversies. This Article argues that expansive regulation of reputation risk is harmful. There is little evidence that can accurately predict and prevent bank reputational losses. Moreover, because reputation risk is largely subjective, regulators can use it to further political agendas apart from bank safety and soundness. Unnecessary politicization of banking regulation undermines faith in the regulatory system and correspondently erodes trust in banks. During our discussion, Professor Hill addressed the following issues: What is reputation risk? What legal authority do bank supervisors have to regulate reputation risk? Why do you believe that the regulation of reputation risk is unnecessary and harmful? What is Operation Choke Point all about and how did it turn out? What was the outcome in the U.S. Supreme Court in NRA v. Vullo of the New York State bank regulator urging state banks to manage the reputation risk posed by doing business with the National Rifle Association? Has concern over the regulation of reputation risk subsided in light of the termination of Operation Chokepoint and the unanimous Supreme Court opinion in NRA v. Vullo? Why does there appear to be renewed worry that regulators are using reputation risk and other justifications to force banks to cut services to people, businesses or industries that they don’t like? Is there any credence to the claims of Elon Musk and others that crypto and tech startups are being debanked or denied fair access to banking services? In light of the fact that President Trump himself and many members of Congress are troubled by debanking claims, what sort of policy changes are likely to be considered? What is the likelihood of the OCC promulgating a regulation prohibiting debanking in Trump 2.0 similar to the one it almost finalized in Trump 1.0? The importance of this podcast is underscored by the fact that yesterday, the Senate Committee on Banking, Housing and Urban Affairs held a hearing entitled “Investigating the Real Impacts of Debanking in America.” Alan Kaplinsky, Senior Counsel and former chair for 25 years of the Consumer Financial Services Group, hosts the discussion.

Our podcast show today features John Culhane and Mike Kilgarriff, partners in Ballard Spahr’s Consumer Financial Services group. They discuss what supervision and enforcement will look like under a new acting director/director appointed by President Trump. This episode is a repurposing of the second half of a webinar that was produced on January 6. On January 23, we released the first half of the webinar, which consisted of Alan Kaplinsky’s “fireside chat” with Kathy Kraninger, the former Director of the CFPB during Trump 1.0., linked here. With respect to supervision, we consider, among others, the following issues with respect to the CFPB’s leadership under Trump 2.0: (a) Will it be business as usual or more relaxed? (b) Will it focus on compliance with the Federal consumer financial services laws and less on UDAAP? (c) Will there be reduced staffing and fewer exams? (d) Will there be fewer PAAR letters and more use of MRAS and MRIAs? With respect to enforcement, we consider, among others, the following issues with respect to the CFPB’s leadership under Trump 2.0: (a) Will there be an exhaustive review of all existing investigations and lawsuits and a dismissal of those which involve “regulation by enforcement” or “pushing the envelope”? (b) Will they focus more on fraud and scams and less on UDAAP? (c) What position will they take on whether the CFPB has been unlawfully funded because the Federal Reserve Banks have had no combined earnings since September 2022? Alan Kaplinsky, Senior Counsel and former chair for 25 years of the Consumer Financial Services Group, hosts the discussion.

Today’s podcast episode is a repurposing of Alan Kaplinsky’s “fireside chat” with Kathy Kraninger, the Director of the CFPB during the second half of President Trump’s presidency from December 2018 until January 2021. (This was originally the first half of a webinar we did on January 6, 2025 which was entitled “The Impact of the Election on the CFPB - Supervision and Enforcement.” The January 6 webinar is Part 2 of a 3-part series. Next Thursday, we will release the second half of that webinar which will feature Ballard Spahr partners, John Culhane and Mike Kilgariff, who will take a deep dive into the expected changes in CFPB supervision and enforcement during President Trump’s second term in office.) During her “fireside chat” with Alan, Kathy discussed the following things: (a) How she was nominated by Trump to be the Director and succeeded Mick Mulvaney, the acting Director appointed by Trump to succeed Richard Cordray as Acting Director; (b) Organizational and other changes made by Mulvaney and/or Kraninger, including a hiring freeze, appointments of new heads of departments, etc; (c) The practical impact on CFPB operations of the Supreme Court’s opinion in the Seila Law case in which the Court held that the President had the right to remove the CFPB director without cause; (d) Her priorities as Director, including her regulatory, supervisory and enforcement agendas; (e) Her policy statements on “abusiveness”, supervisory expectations and COVID-19; (g) Her thoughts on what she anticipates will change at the CFPB once a new acting director chosen by Trump succeeds Rohit Chopra; and (h) Her thoughts on whether Congress should re-structure the CFPB’s governance and funding. The “fireside chat” provides stakeholders in the CFPB insight into what may happen at the CFPB during Trump 2.0. There will, however, be some important differences between the circumstances that existed during the transition from Cordray to Mulvaney Kraninger during Traump 1.0 and the transition from Chopra to a new acting Director during Trump 2.0.. At the time when Mick Mulvaney became Acting Director, there were no pending lawsuits challenging CFPB final regs and other actions. During Mulvaney’s term in office, a trade association of payday lenders sued the CFPB challenging the CFPB’s payday lending rule and, in particular, its “ability to pay” requirement. The acting director appointed by Trump will inherit multiple pending lawsuits against the CFPB challenging many of the regs issued by the CFPB under Rohit Chopra’s last two years as Director. The Acting Director will need to develop legislative (Congressional Review Act), judicial and regulatory strategies for dealing with the slough of regs, proposed regs and other written guidance issued by Chopra. The Acting Director will also need to quickly decide what position the CFPB will take with respect to the defense raised in at least 13 enforcement lawsuits claiming that the CFPB has been disabled from conducting business since September 2022 when there was no longer any “combined earnings of the Federal Reserve Banks” - a prerequisite to the Federal Reserve Board funding the CFPB under the Dodd-Frank Act. Alan Kaplinsky, Senior Counsel and former chair for 25 years of the Consumer Financial Services Group, hosts the discussion.

In today’s episode, we discuss the CFPB’s recent proposed data broker rule—a proposal that would greatly expand the reach of the Fair Credit Reporting Act. On December 3, the CFPB issued a proposed rule promoted as one that would require companies that sell data about income or financial tier, credit history, credit score or debt payments to comply with the Fair Credit Reporting Act. The proposal would make it clear that when data brokers sell certain sensitive consumer information, they are “consumer reporting agencies” under the FCRA. That would require them to comply with accuracy requirements. It also would require them to provide consumers access to their information. However, the proposal is much broader than a data broker rule, and the podcast explores the significant breadth of the proposal. The rule might face an uncertain future, since it was issued by current CFPB Director Rohit Chopra and pushes beyond the boundaries of the FCRA. Chopra’s aggressive regulatory regime is opposed by the Trump Administration. Joining us today is Dan Smith, president and CEO of the Consumer Data Industry Association, which represents the consumer data reporting industry. The host of the discussion is Alan Kaplinsky, the former practice group leader for 25 years, and now senior counsel of the Consumer Financial Services Group at Ballard Spahr. Joining the discussion are two Ballard Spahr partners: Richard Andreano, the practice leader of our mortgage banking group at Ballard Spahr and John Culhane. In this episode, we will discuss the key aspects of the landmark proposed rule, such as: 1.    The proposal being much broader than one addressing the sale of personal information to various parties, including stalkers, spies and scammers.  2.    The fact that the proposal does not even define what is a data broker.  3.    How the proposal would significantly change the concept of what constitutes a consumer report, including the proposal to treat credit header information as a consumer report.  4.    How the proposal would change the concept of what constitutes a consumer reporting agency.  5.    Requirements that the proposal would add to the written authorization permissible purpose to obtain a consumer report, including requirements regarding revocation of the authorization.  6.    How the proposal would modify the requirements to rely on the legitimate business need permissible purpose to obtain a consumer report.  7.    Whether the CFPB actually has legal authority to essentially rewrite the FCRA.

Today’s podcast episode is part two of our December 16th webinar, where we discussed the impact of the election on CFPB rulemaking. Part one consisted of a “fireside chat” with David Silberman, who held several senior-level positions at the CFPB for almost ten years under both Democratic and Republican administrations. In part two, Ballard Spahr partners John Culhane and Joseph Schuster address the following questions: 1.      What will happen to CFPB regulations issued before January 20, such as the CFPB’s credit card late fee rule, which is currently being challenged in a Texas federal court? 2.      What will happen to proposed regulations that may still be finalized before January 20, such as the interpretive rule on earned wage access plans and the proposed contract clause registry? 3.      What will happen to other written guidance from the CFPB, such as the circular on unenforceable contract terms and the advisory opinion on requests for information under Section 1034(c) of Dodd-Frank?  4.      What will be the impact of the Congressional Review Act? 5.      What will be the impact of litigation challenges? 6.      What will rulemaking look like under the new Director? 7.      What will be the impact of the U.S. Supreme Court’s opinion in Loper Bright Enterprises which repealed the Chevron judicial deference doctrine? Alan Kaplinsky, Senior Counsel and former chair for 25 years of the Ballard Spahr’s Consumer Financial Services Group, hosts the discussion.

David Silberman, a senior advisor at the Financial Health Network and former CFPB leader, shares his valuable insights on the transitional periods of the CFPB during administration shifts. He discusses the impact of leadership changes on pending lawsuits, especially following the 2016 election. Silberman emphasizes the significance of the acting director's role and how it shaped the Bureau's trajectory under Trump. With anecdotal experiences from his tenure, he provides a compelling view on the future regulatory landscape for consumer finance.

  In today’s podcast episode, we’re joined by Alex Johnson, Founder of Fintech Takes, and Paige Paridon, Senior Vice President, Senior Associate General Counsel & Co-Head of Regulatory Affairs at Bank Policy Institute, to take a deep dive into the new Consumer Financial Protection Bureau Open Banking Rule. The CFPB has issued a groundbreaking final rule implementing Section 1033 of the Dodd-Frank Act, significantly expanding consumer access to their financial data. This new Open Banking Rule will have far-reaching implications for financial institutions, fintech companies, and consumers alike. In this episode, we’ll explore the key aspects of this landmark regulation, such as: 1. The scope, rule requirements, and compliance deadlines 2. Complexities of implementing new interfaces and data security measures 3. Potential pitfalls and best practices to mitigate risks, including a lawsuit challenging the legality of the rule 4. How the rule can foster innovation and enhanced consumer experiences 5. The impact of presidential election and presumed appointment of new Acting Director of CFPB Alan Kaplinsky, former Practice Leader and Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates today’s episode, and is joined by Gregory Szewczyk and Hilary Lane, Partners in Ballard’s Privacy and Data Security Group.

Raj Date, managing partner at Fenway Summer and former CFPB leader, joins Joseph Schuster, a Ballard Spahr partner specializing in consumer finance law. They delve into the nuanced debate around bank regulation versus supervision. Date argues that banks are over-supervised, not over-regulated, citing privileges banks enjoy far outweighing their compliance burdens. The conversation tackles the detrimental effects of excessive oversight on innovation and decision-making. They highlight the urgent need for a balanced regulatory approach that adapts to technological advancements.

If you work for a bank or other consumer financial services provider, you will want to listen closely to how consumer advocates are reacting to Trump’s election insofar as the CFPB and FTC are concerned. In today’s podcast episode, we’re joined by Erin Witte and Adam Rust (the “CFA Reps”) from CFA. We focus first on CFPB and FTC regulations that might be finalized during the lame duck session of Congress. The CFA Reps express hope that the FTC would finalize its so-called “junk fee reg” which, as proposed, called for “all-in” pricing (I.e., disclosure of a dollar amount for goods and services that includes all fees that will be charged in connection with the transaction.) They also express hope that the CFPB will finalize its checking account overdraft fees reg, the larger participant rule pertaining to non-bank payment providers and the medical debt rule which, if finalized, would result in unpaid medical debt no longer appearing on credit bureau reports. Of course, there is a risk, with respect to each of these rules as well as any other CFPB and FTC rules finalized roughly after August 1 of this year, which they may be overruled by Congress under the Congressional Review Act. We then discuss final regs promulgated by the FTC and CFPB which have been challenged in the Circuit Courts of Appeal. For the FTC, this includes the so-called CARS Rule (which imposes restrictions on car dealers’ sales and financing of motor vehicles) and the recent “Click-to-Cancel” Rule which, among other things, requires sellers of goods and services on a subscription basis to be able to cancel subscriptions as easily as signing up for subscriptions. The latter rule has been challenged in four circuit courts of appeal.  We also discuss the status of many CFPB final regs and what a new CFPB’s strategy may be with respect to them. They include: the $8 credit card late fee rule which is currently enjoined by a Federal District Court in Texas; the data collection reg pertaining to small business loans promulgated under Section 1071 of Dodd-Frank, which is currently on appeal before the Fifth Circuit Court of Appeals after a Federal District Court denied a motion by the bank trade associations to grant a preliminary injunction pertaining to the reg; the open-banking reg under Section 1033 of Dodd-Frank (which pertains to consumers having the ability to share information in certain bank accounts with third parties which has been challenged in court; the Buy-Now, Pay-Later interpretive rule which has been challenged in court; and the Earned Wage Access interpretive rule. There is great uncertainty as to whether the new CFPB’s Director will seek to repeal or amend any of these regs or whether he or she will elect to change the CFPB’s position in the litigation to side with the plaintiffs. In order to repeal or change any of the regs (other than the two interpretive rules), the CFPB will need to jump through all the hoops required by the Administrative Procedure Act before effecting a repeal or change and the repeal or change might be challenged in court as being arbitrary or capricious. It would seem that it might be much easier to repeal or change the interpretive rules which would not require publishing them in the Federal Register for notice and comment. The CFS Reps also express hope that the CFPB issues its final report with respect to the voluminous information it received from auto finance companies in response to market monitoring orders it issued to them. An initial report recently issued by the CFPB and dealt with the incidence of financing negative equity in cars being traded in. While the final report is unlikely to result in new proposed CFPB regulations during the next four years, the report might instigate enforcement actions by state AGs. As was the case during the first Trump presidency, the CFA Reps believe that whatever consumer protection void is created at the CFPB will largely be filled by state AGs, state departments of banking and consumer protection agencies. They also expect there to be an increase in private civil litigation, including class actions. Alan Kaplinsky, Senior Counsel and former chair for 25 years of the Consumer Financial Services Group, hosts the discussion.