August 7, 2022

Volume XII, Number 219

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August 05, 2022

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August 04, 2022

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CFPB Continues Efforts to Promote Competition in Financial Markets

On July 11, CFPB Director Rohit Chopra drafted a blog post detailing the Bureau’s efforts to comply with President Biden’s Executive Order on Promoting Competition in the American Economy aimed, in part, to address the Administration’s concerns about pressing antitrust and competition issues affecting consumers. The CFPB was directed by the Order to explore ways to make it easier for consumers to switch financial institutions and to aggressively enforce the prohibition of UDAAPs in consumer financial products and services pursuant to the Dodd-Frank Act.

Director Chopra indicated the Bureau is identifying obstacles consumers face when looking to refinance and switch providers by, for example:

  • Inquiring with credit card issuers about changes that have undermined the ability of consumers to get lower-rate offers from other issuers; and

  • Implementing required rulemaking on personal financial data rights aimed at promoting competition and giving control of data back to consumers.

The CFPB is in the process of identifying barriers of entry faced by small financial institutions and new entrants looking to challenge dominant players in the market. For example, the CFPB has ordered Big Tech companies participating in the payment and banking space to provide information about their use of individual consumer data (we discussed this initiative in a previous blog post here).

According to the Director, the CFPB launched an initiative to prevent back-end fees, which obscure the all-in cost of a product and service. A rulemaking process is underway to address credit card late fees “that cost Americans $12 billion in 2020 alone,” the Director stated.

Putting It Into Practice: As evidenced by Director Chopra’s post and the number of recent enforcement actions, the CFPB is taking seriously the Administration’s directives. Many of the CFPB’s efforts remain in early stages—the results and full effects of the information gathering and rulemaking processes have yet to be realized, and will be monitored with great interest.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 217
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About this Author

Moorari Shah Bankruptcy Lawyer Sheppard Mullin Law Firm
Partner

Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm's Los Angeles and San Francisco offices. 

Areas of Practice

Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,...

213-617-4171
A.J. S. Dhaliwal Bankruptcy Attorney Sheppard Mullin Washington DC
Associate

A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office. 

A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.

With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving...

202-747-2323
Katie Daw Government Investigations Attorney Sheppard Mullin Law Firm
Associate

Katie’s practice focuses on government investigations into antitrust and competition issues and antitrust litigation.

Prior to joining the firm, Katie completed internships with United States Senator Dianne Feinstein and with United Kingdom Member of Parliament Graham Allen, for whom she conducted nutritional poverty research and drafted initiatives. She also served as a law clerk for the Baltimore Police Department, where she focused on compliance with the city’s consent decree entered into with the Department of Justice.  

202-747-2191
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