The Roundup: A Jumbo-Sized Rate Cut, Dark Patterns in Autorenewal Programs, and the Impact of Recent Regulatory Updates
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 Fed slashes rates by a half percentage point, the CFPB is once again taking on the gaming industry, the FTC takes action against a security camera firm over charges it failed to secure videos and other personal data and violated the CAN-SPAM Act, the USDOT seeks to protect consumers’ airline rewards in a probe of the four largest U.S. airlines’ rewards practices, the FTC targets a company for alleged dark patterns in autorenewal programs and earnings claims, the fair debt collection practices act CFPB annual report 2024, the impact of recent regulatory updates on EWA, BNPL, and the Chevron Doctrine and a nonbank registration technical readiness event.
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Jumbo-sized rate cut: Fed slashes rates by a half percentage point
The Federal Reserve announced a significant interest rate cut on September 18, 2024, lowering rates by 0.5 percentage points. This is the first rate reduction since March 2020, as the Fed shifts focus from controlling inflation to supporting the slowing job market and easing borrowing costs. The decision is expected to reduce interest rates for mortgages, credit cards, and other loans, signaling a notable pivot after maintaining high rates to combat inflation over the past year.
CFPB Again Taking on the Gaming Industry
The CFPB has once again focused on the gaming industry, issuing a consumer advisory on financial risks related to in-game transactions and virtual currencies. The Bureau warns that many video games and virtual worlds now resemble traditional banking systems but lack adequate protections for consumers, especially younger players. It emphasizes risks like unauthorized charges and scams, urging gamers and parents to be vigilant. The advisory follows a prior CFPB report outlining concerns about in-game financial transactions.
FTC Takes Action Against Security Camera Firm Over Charges It Failed to Secure Videos and Other Personal Data and Violated the CAN-SPAM Act
The FTC has taken action against a security camera company for failing to implement proper security measures, resulting in data breaches that exposed sensitive footage. Additionally, the company violated the CAN-SPAM Act by sending millions of commercial emails without proper unsubscribe options. The company will pay a record-breaking $2.95 million fine and must create a comprehensive data security program.
Significant Stat: $120 Million: The total penalty being levied against a federal student loan servicing company for wide-ranging lending failures. Read more
USDOT Seeks to Protect Consumers’ Airline Rewards in Probe of Four Largest U.S. Airlines’ Rewards Practices
The USDOT has launched an inquiry into airline rewards programs to protect consumers from potentially unfair practices like devaluation of rewards, hidden pricing, and excessive fees. The investigation will examine how airlines manage rewards, ensure transparency, and maintain fair competition. The DOT is focusing on ensuring consumers get the promised value from their rewards, with a particular emphasis on preventing retroactive changes that reduce the benefits of earned rewards.
FTC Targets Company for Alleged Dark Patterns in Autorenewal Programs and Earnings Claims
A recent FTC enforcement action highlighted issues with automatic renewal practices and misleading advertising claims regarding earnings. The company allegedly made it difficult for users to cancel subscriptions, employing complex cancellation processes and using “dark patterns” to discourage cancellation.
Fair Debt Collection Practices Act CFPB Annual Report 2024
The CFPB’s annual report to Congress summarizes its activities in administering the Fair Debt Collection Practices Act (FDCPA) in 2023. The report also covers activities related to the debt collection industry conducted by the Federal Trade Commission (FTC) in 2023 and highlights consumer protection issues in medical and rental debt collection.
The Impact of Recent Regulatory Updates on EWA, BNPL, and the Chevron Doctrine
PerformLine recently sat down with Eric Goldberg, Partner at Akerman LLP, and Catherine Brennan, Partner at Hudson Cook LLP, to talk about the CFPB’s new interpretive rules on earned wage access products and buy now, pay later (BNPL) products. They also discussed the implications of the Supreme Court’s recent rulings on the Chevron doctrine and statute of limitations. Get their insights from this interview on the effects of these regulatory updates and more.
Nonbank Registration Technical Readiness Event
The CFPB will be hosting an event to introduce their Nonbank Registry. Attendees can choose between either Monday, September 30th, or Wednesday, October 9th. Both sessions will be held virtually and will cover the same content. This event is aimed at compliance staff who will be registering covered orders with the CFPB’s Nonbank Registry. During the event, the CFPB’s Nonbank Registry team will demonstrate the process for registering a company for the first time, provide an overview of the registry’s features, and answer technical questions.
