Download Wiley Consumer Protection (July 19, 2021) | Wiley Rein LLP
Welcome to Wiley’s update on recent developments and next steps in consumer protection in the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this newsletter, we analyze recent regulatory announcements, recap key enforcement actions, and preview upcoming deadlines and events. We also include links to our articles, blogs and webinars with more analysis in these areas. We understand that staying on top of the rapidly changing regulatory landscape is more important than ever for companies looking to deliver new and breakthrough technologies.
The FTC sets the agenda for the July 21 open meeting of the Commission. At July 12, FTC President, Lina Khan ad that the next public meeting of the commission be held on July 21. As part of this meeting, the agency will consider a proposal to cancel the Care labeling rule, which requires both manufacturers and importers to affix labels with care instructions for clothing, so consumers have reliable instructions for washing, bleaching, drying and ironing their clothes. The FTC will also consider whether to issue a new policy statement following the agency’s decision in May 2021. “Nixing the Fix” Report, which, as we explained in our May 10 Bulletin, analyzed the arguments advanced by “right to repair” advocates, the arguments of manufacturers and other stakeholders in response, and the relevant legislative framework, including the Magnuson-Moss Warranty Act and the FTC Act. Finally, the agency will vote on whether or not to cancel a 1995 policy statement regarding “pre-approval” and “notice” remedies in antitrust cases. As was the case with the FTC Open meeting of the Commission on July 1, the agency will also hear from the public (our recap of the July 1 meeting is available here).
Important enforcement measures
The online lender agrees to pay the FTC charges that allegedly misled consumers about the hidden charges. At July 14th, the FTC ad as LendingClub Corporation (LendingClub) agreed pay $ 18 million to pay fees that would have misled consumers about hidden charges and approving their loan applications. The FTC at the origin complaint filed against LendingClub in 2018, alleging that the company falsely promised consumers that it would not charge fees related to loans. The FTC also argued that LendingClub told consumers they had been approved for loans when they had not and had withdrawn money from consumers’ bank accounts without authorization.
CFPB files a complaint against a Fintech company for allegedly allowing merchants to obtain loans without consumer approval. At July 12, the CFPB announced that it had issued a consent order against GreenSky, LLC (GreenSky) for allegedly violating the Consumer Financial Protection Act of 2010 by allowing third parties to take out loans on behalf of consumers without their approval. Specifically, the CFPB alleges that between 2014 and 2019, GreenSky authorized entrepreneurs and other merchants to take out loans on behalf of thousands of consumers who did not approve the loans. The CFPB consent order requires GreenSky to pay $ 9 million in cash refunds and cancellations, and $ 2.5 million to the CFPB.
FTC Reaches Settlement With Florida Companies Offering Debt Relief Services. At July 12, the FTC ad that he had entered into a settlement with Moneta Management, LLC and Moneta Management, Inc. (collectively, Moneta) for allegedly providing false or misleading information to credit card processors and automated clearing houses in order to obtain merchant processing information for a scam operated by Brandon Frere, a third party. Frere and his companies have reached a regulation with the FTC in November 2020. As part of the settlement, Moneta will not be able to process payments, act as a sales agent, and assist or facilitate unfair sales practices. The settlement also proposes a $ 26.8 million penalty against Moneta for breaking the telemarketing sales rule.
The FTC is suing the CBD trader for making unsupported health claims. At July 6, the FTC has announced that it has approved a administrative consent order against Kushly Enterprises LLC (Kushly) for making unsubstantiated health claims in connection with the marketing and sale of cannabidiol (CBD) products. As we noted in our May 24 Bulletin, the FTC has filed a lawsuit against Kushly for allegedly making false or unsubstantiated claims that their CBD products could treat or cure acne, psoriasis, cancer, and multiple sclerosis. The consent order requires Kushly to pay the FTC $ 30,583.14, which is the amount consumers paid Kushly for the products she sold using her allegedly deceptive marketing.
Deadlines and upcoming events for comments
The Federal Reserve Board, FDIC, and OCC are asking for comments on third-party risk management principles. Comments are due September 17 at proposal for inter-agency guidance issued by the Federal Reserve Board of Governors (the Board), the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC). The proposed interagency guidance focuses on the risk management practices that banking organizations should consider when developing risk management strategies for third party relationships. The Board of Directors, FDIC and OCC intend that the proposed interagency guidance will “take into account the level of risk, the complexity and size of the banking organization and the nature of the relationship with third parties.” . If adopted, the proposed guidelines would replace the existing guidelines of each branch and would apply to all banking organizations regulated by the branches.