The Roundup: The FTC Announces Final “Click-to-Cancel” Rule, California’s Oversight of EWA, and the CFPB Consumer Complaint Risk Signal Report
Welcome to the PerformLine Regulatory Compliance Roundup, home of the latest news, articles, and reports from our industry, curated for you. Let’s get into it.
In this edition: The CFPB sues student lender for deceiving borrowers, the FTC announces final “click-to-cancel” rule, the CFPB issued a final rule on open banking, California to begin oversight of EWA, the OCC announces enforcement actions for October 2024, and the CFPB consumer complaint risk signal report.
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CFPB Sues Student Lender for Deceiving Borrowers
The CFPB has filed a lawsuit against a student loan provider and an associated investment firm for misleading borrowers about vocational training programs. The companies falsely claimed they vetted schools for quality and misrepresented job prospects and salaries, leading students to take out loans under false pretenses. They also failed to disclose key loan terms, such as APR and fees. The CFPB is seeking to stop these practices and offer relief to impacted borrowers.
FTC Announces Final “Click-to-Cancel” Rule
The FTC has finalized its “Click-to-Cancel” rule, requiring companies to make it as easy for consumers to cancel subscriptions as it was to sign up. This new rule aims to eliminate hurdles that trap consumers in unwanted recurring payments. It applies to most negative option programs and prohibits deceptive practices while ensuring consumers are informed before charges occur.
Significant Stat: $120 Million: The highest single enforcement action taken by the CFPB in Q3 of 2024 for UDAAP, FCRA, and FDCPA violations. Read more
CFPB Issues Final Rule on Open Banking
The CFPB has issued a final rule on open banking, which they state will give consumers greater rights, privacy, and security over their personal financial data. The rule requires financial institutions, credit card issuers, and other financial providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free.
California to Begin Oversight of EWA
California is set to implement new regulations on Earned Wage Access (EWA) programs. These rules aim to protect workers by establishing guidelines for how EWA providers offer early access to wages, including transparency requirements and limits on fees. The regulations will also distinguish EWA services from traditional loans to ensure fair treatment. As these programs grow in popularity, the state’s actions are part of broader efforts to address the financial impacts on employees.
OCC Announces Enforcement Actions for October 2024
The OCC has released its enforcement actions for October 2024, addressing deficiencies at several national banks related to unsafe practices. These actions include compliance with anti-money laundering regulations, risk management, and board oversight. These actions also include prohibitions against individuals involved in misconduct, such as fraud and misappropriation of funds, at various institutions.
CFPB Consumer Complaint Risk Signal Report
Take a deep dive into consumer complaint data collected from the CFPB’s Consumer Complaint Database to understand recent trends and compliance risks for financial institutions. Help shape your compliance program by focusing on the most pressing issues presenting risk to your organization.
