April 22, 2025
CFPB Bites of the Month - April 16, 2025 - "I'll Remember April and the CFPB"
Justin B. Hosie, Eric L. Johnson and Kristen Yarows
In this month's article, we share some of our top "bites" covered during the April 2025 webinar.
Bite 15: CFPB Publishes Research on Credit Sharing and "Piggybacking"
On March 25, 2025, the CFPB published empirical research on credit sharing and a term called "piggybacking." The CFPB said that "piggybacking" occurs when individuals with no responsibility for paying an account are made authorized users for the purpose of boosting their apparent creditworthiness. The paper identified two types of piggybacking: "family sharing," in which parents add their young adult children to their credit cards; and "renting" credit card tradelines to strangers. For both types of piggybacking, the CFPB found that authorized user status significantly increases access to credit. In addition, the research found broad evidence that consumers who obtain credit in their own names while piggybacking are more likely to default on the credit in their name. The research also found that with respect to auto "loans," a family-shared authorized user account significantly increased the success rate of an auto "loan" application, and that successful applications were less likely to end in delinquency. The paper also discussed the implications of piggybacking for credit inequality in the United States.
Bite 14: CFPB Publishes HMDA Data on Mortgage Lending
On March 31, 2025, the CFPB announced that the Home Mortgage Disclosure Act's (the "HMDA") Modified Loan Application Register data for 2024 are now available on the Federal Financial Institutions Examination Council's platform. It has data for approximately 4,898 filers. The published data contains loan-level information filed by financial institutions and modified to protect consumer privacy. The HMDA requires many financial institutions to maintain, report, and publicly disclose loan-level information about mortgages. The CFPB's 2015 HMDA rule made the data for each HMDA filer available electronically. Previously, users could only obtain the HMDA data by making requests to specific institutions for their annual data. The CFPB also shared its Beginner's Guide to Accessing and Using HMDA Data that provides useful background on HMDA and tips for understanding and analyzing the data.
Bite 13: House Subcommittee Examines CFPB Structure
On March 26, the House Subcommittee on Financial Institutions held a hearing called, "A New Era for the CFPB: Balancing Power and Reprioritizing Consumer Protections." Panelists examined the current regulatory and legal landscape for federal consumer financial protection and the structure of the CFPB. The Subcommittee reviewed the statutory authorities granted to the CFPB under the Dodd-Frank Act. The Subcommittee's memorandum on the hearing said it will "review actions and proposals from the previous administration that limit choice and innovation in the market for consumer financial products and services." Chairman Andy Barr (KY-06) led the hearing. Several witnesses testified, including Hudson Cook partner, Becki Kuehn. The hearing discussed the potential process to transform the CFPB into a five-member commission and potential reform to the CFPB's civil investigative demand authority.
Bite 12: Congress Votes to Overturn CFPB Overdraft Fees Rule
On March 27, 2025, the Senate voted to overturn the CFPB's rule that limits overdraft fees at large banks to $5. The rule was finalized during the Biden Administration and faced challenges in court from banking industry groups. The measure to block the rule was brought under the Congressional Review Act and cleared the Senate on a 52-48 vote that largely fell along party lines, with Senator Josh Hawley (R-Missouri) being the only lawmaker to cross the aisle. The Senate passed a similar legislative effort earlier in March to block the CFPB rule establishing supervisory authority over larger digital payment providers. On April 9, the House voted (217-211) to overturn the rule. The resolution now heads to President Trump for his signature.
Bite 11: Congress Votes to Overturn CFPB Payment Rule
On March 5, 2025, the Senate voted (51-47) to approve the joint resolution (S.J. Res. 28) disapproving the CFPB's rule, "Defining Participants of a Market for General-Use Digital Consumer Payments Applications." On April 9, the House of Representatives passed a Congressional Review Act resolution (H.J. Res. 64) that disapproves the rule. The House vote was along party lines with 219 Republicans voting in favor and 211 Democrats voting against. Three representatives did not vote. Representative Mike Flood (R-Neb.) and Senator Pete Rickets (R-Neb.) lead the repeal efforts. The measure will go to President Trump for his signature. The CFPB finalized the rule in November 2024, and it gave the CFPB the authority to supervise nonbank companies that offer digital funds transfer and payment wallet apps with over 50 million annual transactions. Trade groups that represent large technology companies sued to block the rule in January 2025.
Bite 10: CFPB Announces Regulatory Relief for Small Loan Providers
On April 11, 2025, the CFPB announced that it will not prioritize either enforcement or supervision of the future deadlines to submit registration information for its Rule titled "Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders." This policy applies to, but is not limited to, the upcoming April 14, 2025 registration deadline and the July 14, 2025 registration deadlineThe CFPB had issued the final rule on June 3, 2024, and it became effective on September 16, 2024. The regulation requires certain nonbank entities to register information about their company and certain orders, as well as submit copies of those orders, to the CFPB. The CFPB said it will instead focus its enforcement and supervision activities on "pressing threats to consumers." In its press release about the regulatory relief, the CFPB also noted that it is considering a notice of proposed rulemaking to rescind the regulation or narrow its scope.
Bite 9: CFPB's Payday, Vehicle Title, and Certain High-Cost Loans Rule Becomes Operative
On March 28, 2025, the CFPB announced that on March 30, 2025, the Consumer Financial Protection Bureau's Payday, Vehicle Title, and Certain High-Cost Installment Loans rule would "became operative." The rule requires specific disclosures, limits withdrawal attempts, requires lenders to maintain a specific compliance program, and requires lenders to follow detailed record keeping requirements for covered loans. The CFPB announced that "it will not prioritize enforcement or supervision actions with regard to any penalties or fines associated with the Payment Withdrawal provisions and the Payment Disclosure provisions once they become operative on March 30, 2025." Instead, the CFPB said it will "keep its enforcement and supervision resources focused on pressing threats to consumers, particularly servicemen and veterans." The CFPB also said it may issue a notice of proposed rulemaking to narrow the scope of the rule. The notice of regulatory relief does not purport to delay the compliance date, purport to stop state attorneys general from enforcing the rule, or purport to provide relief from CFPB fines for recordkeeping and compliance program requirements.
Bite 8: Senate Confirms New FTC Commissioner
On April 10, 2025, the Senate confirmed Mark Meador as the newest Republican FTC commissioner with a 50-46 vote along party lines. President Trump nominated Meador on January 20, for a term that will expire on September 25, 2031. FTC Chairman Ferguson issued a press release welcoming Commissioner Meador by saying, "Mark is a brilliant antitrust lawyer who will be a great asset to the Trump-Vance FTC." Commissioner Meador comes to the FTC from a boutique antitrust law firm. Commissioner Meador will join Republican Chairman Ferguson and Republican Commissioner Holyoak. The two Democratic commissioner positions remain empty after President Trump fired Alvaro Bedoya and Rebecca Kelly Slaughter.
Bite 7: CFPB Requests Withdrawal in Case Against Money Transfer Company
On April 7, 2025, it was reported that the CFPB filed a motion to withdraw from its case against a nonbank remittance transfer company, but that the New York Attorney General intends to continue pursuing the litigation. Back in 2022, the CFPB and the Attorney General of New York filed a lawsuit in the U.S. District Court for the Southern District of New York against a nonbank remittance transfer company. The lawsuit alleged that the company failed to promptly send payments or make refunds. The lawsuit also alleged violations of the Remittance Transfer Rule and Regulation E, which implements the Electronic Fund Transfer Act, as well as unfairness in violation of the Consumer Financial Protection Act. The CFPB did not seek a dismissal since the Attorney General of New York is also suing the company. A representative from the New York AG's office said that the agency intends to continue pursuing the litigation in the CFPB's absence. The CFPB has now dismissed at least nine of the two dozen enforcement cases that were pending when the administration changed, and federal judges have paused at least seven more lawsuits.
Bite 6: CFPB Dismisses Lawsuit Against Large Bank
On April 11, 2025, media outlets reported that the CFPB dismissed a lawsuit against a large bank. Specifically, the CFPB filed a notice of dismissal without prejudice in its lawsuit against this large bank. The bank had filed a motion to dismiss in March, and the CFPB did not file a response to the motion. The CFPB had filed the lawsuit back in December 2024, alleging the bank unfairly managed a prepaid debit card program that delivers various government benefits to consumers. The lawsuit also alleged that the bank failed to provide consumers with a reasonable way to obtain effective and timely assistance, forced consumers to close their accounts and request new cards instead of honoring stop payment requests, failed to provide correct and complete information to enrollment-fraud victims, and charged consumers ATM fees that they did not owe. The CFPB has dismissed several lawsuits that it initiated during the last administration.
Bite 5: FTC Takes Action Against Online Cash Advance Company
On March 27, the FTC filed a complaint and a proposed settlement order in the U.S. District Court for the Southern District of New York alleging that an online cash advance company misled consumers over how quickly they would receive funds and the amount of money available to consumers. The FTC alleges that the company's advertisements promised consumers hundreds of dollars in cash advances, but that almost no one received close to the advertised amount. The complaint also alleges that the company advertised same-day or instant advances, but consumers had to pay an additional fee to access the service. The complaint also alleges that the company made it challenging for consumers to cancel their subscriptions and were told they couldn't cancel the subscription until they paid for outstanding cash advances. The proposed order would require the company to pay $17 million that would be used to provide refunds to consumers. The order would also prohibit the company from misleading consumers about any material terms of its advances; require the company to clearly and conspicuously disclose the terms of any subscription; get consumers' express, informed consent before charging them for a subscription; and provide a simple way for consumer to cancel. The Commission voted 2-0 to authorize the staff to file the complaint and stipulated order.
Bite 4: CFPB Announces It Will Rescind BNPL Guidance
On March 26, 2025, the CFPB disclosed its decision to rescind guidance that asserted buy-now, pay-later or BNPL products were subject to some of the same federal requirements as credit cards. In a lawsuit brought by the Financial Technology Association, the parties issued a joint status report asking the judge to stay the litigation since the case will soon be moot. The joint status report said, "The Bureau is planning to revoke the Interpretive Rule." The CFPB issued the interpretive rule in May 2024, and it laid out the CFPB's view that BNPL firms qualified as credit card providers under the Truth in Lending Act. The Financial Technology Association filed a lawsuit in October 2024 to strike down the rule, arguing that it violated the Administrative Procedure Act and that it was arbitrary and capricious. The joint status report did not give a timeline for when the interpretive rule will be withdrawn. It proposed that the CFPB will file monthly status reports starting in June "regarding its progress towards revocation."
Bite 3: CFPB Seeks to Vacate Settlement with Mortgage Lender
On March 26, 2025, the CFPB and a mortgage lender jointly moved to vacate the Stipulated Final Judgment and Order previously entered against the company. The CFPB sued the mortgage lender in 2020, alleging that the company discouraged potential applicants on a radio program because of their race and the racial composition of the neighborhood where they lived or sought to live. In July 2024, the 7th Circuit held that the Equal Credit Opportunity Act prohibited not only outright discrimination against applicants for credit, but also the discrimination of prospective applicants for credit. Following that holding, the company settled with the CFPB for a $105,000 penalty to the CFPB's victims relief fund. In the release the CFPB's Senior Advisor called the case a "flagrant misuse of government resources to destroy a small business that did nothing wrong" and said, we "are righting this wrong and protecting the First Amendment." The CFPB wrote in its press release that "after a thorough review" it is seeking to make the company "whole by returning the six-figure penalty they were forced to pay."
Bite 2: Judge Orders CFPB to Reinstate Fired Employees, but...
On March 28, 2025, Judge Amy Berman Jackson issued a preliminary injunction that orders CFPB Acting Director Vought to reinstate all fired probationary and term employees. Judge Berman Jackson issued a 112-page memorandum opinion that started with quotes from Elon Musk, Acting Director Vought, and President Trump. Judge Berman Jackson wrote, "The Court cannot look away or the CFPB will be dissolved and dismantled completely in approximately thirty days, well before this lawsuit has come to its conclusion." The order strikes down Acting Director Vought's February stop work order, requires the CFPB to ensure its consumer complaint portal works and respond to complaints, and orders the CFPB to reverse contract terminations. The order provides that the CFPB cannot "delete, destroy, remove, or impair any data, database, or other CFPB records." The order prohibits the CFPB from terminating any employees except for cause related to the individual's performance or conduct. On March 29, the Department of Justice filed an appeal with the U.S. Court of Appeals. On April 11, a three-judge panel sided with administration to allow job cuts, but upheld other aspects of order.
Bite 1: CFPB Issues Memo Regarding Use of Regulatory Guidance
On April 11, 2025, CFPB Acting Director Russell Vought wrote a memo that directed CFPB staff to cease issuing guidance documents. In the memo, Vought claimed that guidance documents have created rights and obligations that are "unlawful and "deprives the public a fair notice of what conduct is prohibited." The memo also ordered the heads of eight CFPB offices to review past guidance documents in the next two weeks and to flag only those that confirm to his principles set forth in the memo. Vought wrote that all guidance that has not been flagged for retention will be reviewed by leadership and rescinded. The memo outlined five principles that the CFPB will adhere to when issuing guidance documents, including clearly disclaiming that the guidance is not legally binding, has no force or effect of law, and may be rescinded or modified at the Bureau's discretion. The memo states that the guidance should clearly identify the underlying law they are explaining. The memo states that guidance shall not use mandatory language. The memo also states that guidance is a voluntary standard and that any recommended practices should clearly state that non-compliance will not, in-and-of itself, result in any enforcement action.
Still hungry? Please join us for our next CFPB Bites of the Month. If you missed any of our prior Bites, request a replay on our website.