CFPB Takes Action Against NewDay USA for Misleading Veterans on Loan Costs 

The Consumer Financial Protection Bureau (CFPB) has imposed a $2.25 million civil penalty on New Day Financial, operating under the brand NewDay USA, for deceiving veterans and active-duty servicemembers with misleading cost comparisons on cash-out refinance loans. The CFPB found that NewDay USA made these loans appear less expensive than they were, particularly in North Carolina, Maine, and Minnesota, by omitting certain costs in their comparisons. This led many borrowers […]

Vendor Management: Audit Sampling and Intuitive Judgment 

For years, when assessing third-party collection vendor performance, I have tried to come up with a better word than “audit”.  Much of the time, the audit word conjures up a negative impression, and I think of the audit as a tool for communication and effectiveness between the vendor, in this case, the collection agency, and the client.  By verifying that performance aligns with contract expectations, and work effort meets expectations, […]

CFPB Releases Compliance Guides for New Nonbank Registry Rule 

The Consumer Financial Protection Bureau (CFPB) has released detailed compliance guides for its new rule that establishes a registry of nonbank entities subject to enforcement actions. This significant regulation, which takes effect on September 16, 2024, mandates that nonbank entities, including debt collectors, register with the CFPB if they have been subject to enforcement actions by local, state, or federal courts or agencies.  However, while the rule itself goes into […]

CFPB Enhances Consumer Protection in the Buy Now, Pay Later Market 

The Consumer Financial Protection Bureau (CFPB) is taking significant steps to promote transparency and fairness in the financial market, particularly in the growing Buy Now, Pay Later (BNPL) sector. By clarifying how existing laws apply to new financial products, the CFPB aims to foster innovation while ensuring that consumer rights are protected.  Issuance of Interpretive Rule  In May, the CFPB issued an interpretive rule to clarify how federal laws like […]

CFPB’s Proposed Rule on Medical Debt: Concerns from Congress and Financial Experts 

Recently, the Consumer Financial Protection Bureau (CFPB) proposed a new rule to limit the inclusion of medical debt in consumer credit reports. This move has sparked serious concerns among financial experts and members of Congress, particularly the House Financial Services Committee, which expressed their opposition in a formal letter. They argue that the rule could disrupt the credit system, making it harder for consumers, especially low-income borrowers, to access affordable […]

New York City’s DCWP Updates Debt Collection Rules to Align with Federal Regulations 

The New York City Department of Consumer and Worker Protection (DCWP) has introduced significant amendments to its debt collection rules, following updates from the Consumer Financial Protection Bureau (CFPB). These changes, effective December 1, 2024, are designed to enhance the protection of consumers, particularly in terms of record retention, reporting requirements, and transparency in debt collection practices.  Overview of the New Rules  The updated regulations aim to address several key […]

The Rising Costs and Disruptive Impact of Data Breaches in 2024: Key Insights from the Latest Report 

The 2024 Cost of a Data Breach Report, an annual study conducted by the Ponemon Institute and sponsored by IBM, reveals a significant rise in the global average cost of data breaches. The report shows that the average cost of a data breach reached $4.88 million in 2024, marking a 10% increase from the previous year. This is the largest annual jump since the pandemic, reflecting the growing disruption that […]

Navigating the Legal Risks of Broad Confidentiality Agreements: A Guide for Companies 

The Consumer Financial Protection Bureau (CFPB) recently issued a circular to law enforcement agencies and regulators, highlighting how broad nondisclosure agreements (NDAs) could violate whistleblower protections under Section 1057 of the Consumer Financial Protection Act (CFPA). These agreements, if not carefully worded, may deter employees from reporting misconduct or cooperating with investigations, thus undermining the CFPB’s enforcement efforts.  Question: Can requiring employees to sign broad confidentiality agreements violate Section 1057 […]

Governor Murphy Signs New Law to Protect NJ Families from Medical Debt 

In a move to support New Jersey families, Governor Phil Murphy signed the Louisa Carman Medical Debt Relief Act into law. This new legislation aims to help families avoid falling into medical debt and protect them from aggressive debt collectors. The act is named in honor of Louisa Carman, a dedicated member of the Governor’s Office who played a crucial role in crafting the proposal before her tragic death in […]

CFPB to Finalize Rule on Public Registry for Nonbank Entities with Arbitration Agreements 

The Consumer Financial Protection Bureau (CFPB) is on the verge of finalizing a proposed rule introduced in March, which will establish a public registry for nonbank entities with arbitration agreements in their contracts. According to a recent CFPB news release, this rule aims to create transparency by making the terms and conditions of these contracts publicly accessible.  What the Proposed Rule Entails  The proposed rule will require supervised nonbanks to […]