The Roundup: The CFPB Continues to Defend Funding, The FTC Demands Truthful AI Claims, and UDAAP Insights & Best Practices
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: Director Rohit Chopra continues to dismiss arguments that the CFPB is unlawfully funded, the FTC demands truthful AI claims and warns of regulatory action, the OCC announces enforcement actions for June 2024, the FTC takes action against a company for hiding fees and preventing consumers from easily canceling software subscriptions, and UDAAP and deceptive advertising: Expert insights and best practices.
Do you want to be the first to know when the Regulatory Roundup is released? Subscribe to never miss an email and follow us on LinkedIn for even more updates on marketing compliance.
Director Rohit Chopra Continues to Dismiss Arguments That the CFPB is Unlawfully Funded
CFPB Director Rohit Chopra dismissed arguments that the agency’s funding from Federal Reserve Bank losses is unlawful during a House Financial Services Committee hearing. Chopra explained the CFPB’s funding mechanism and rebutted claims that the agency’s funding should come from the Federal Reserve’s positive earnings. There are expectations that Congress may pressure Federal Reserve Chairman Jay Powell to address the issue.
FTC Demands Truthful AI Claims, Warns of Regulatory Action
The FTC is intensifying scrutiny of AI claims, warning companies to ensure their AI-related promises are truthful and substantiated. FTC’s Bureau of Consumer Protection Director Samuel Levine emphasized enforcement against misleading claims and highlighted the need for truthful marketing.
The FTC will use existing laws to combat false advertising and fraud while pushing for more resources to tackle AI-related scams. Recent actions include banning certain AI uses and addressing deceptive practices in AI marketing.
Significant Stat: $324 Million: The total amount of refunds issued to consumers by the FTC in 2023 due to law enforcement actions. Read more
OCC Announces Enforcement Actions for June 2024
The OCC announced enforcement actions for June 2024, including agreements with two banks to address compliance and risk management issues. Prohibition orders were issued against individuals from other banks for misconduct, and previous enforcement action was terminated after compliance improvements.
FTC Takes Action Against Company for Hiding Fees, Preventing Consumers from Easily Canceling Software Subscriptions
The FTC is taking action against a company and its executives for deceiving consumers by hiding early termination fees and making it difficult to cancel subscriptions. The company’s “annual paid monthly” plan required users to commit for a year, with hidden fees for early cancellation. The FTC alleges the company’s practices violate the Restore Online Shoppers’ Confidence Act.
UDAAP and Deceptive Advertising: Expert Insights & Best Practices
Regulatory agencies have significantly increased their focus on deceptive advertising practices under UDAAP. This has led to increased enforcement actions for misleading “free” and “instant” offers and an increased focus on misleading FDIC insurance representation.
To help better understand these issues, Industry experts Jonathan Pompan at Venable LLP and Brian Serafin at Weiner Brodsky Kider PC take a deep dive into UDAAP, deceptive advertising, and best practices for staying ahead of risks.
