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On January 5, 2021, the CFPB’s (the “Bureau”) Taskforce on Federal Consumer Financial Law (the “Taskforce”) released a report (the “Report”) recommending how consumer protection in the financial marketplace may be improved.  Chartered by the Bureau in January of 2020, the Taskforce was charged with “examin[ing] the existing legal and regulatory environment facing consumers and financial services providers,” and “report[ing] its recommendations for ways to improve and strengthen consumer financial laws and regulations.”

The Report consists of two volumes.  Volume I provides a historical and economic overview of consumer finance, details the key principles at the core of federal consumer financial law and policy, and articulates particular topics important to the Bureau’s work.  Volume II develops recommendations to improve and strengthen the application of financial laws and regulations.  Volume I is nearly 800 pages long and Volume II is 99 pages long.  The Report is organized around the five key areas of analysis of consumer protection:  (i) the legal framework of consumer protection, (ii) consumer information and disclosure, (iii) competition, innovation, and consumer choice, (iv) inclusion and access, and (v) regulatory modernization.

In the Report, the Taskforce makes approximately 100 recommendations to the CFPB, Congress, and state and federal regulators to strengthen consumer protection.  Key recommendations include:

  • Authorizing the Bureau to issue licenses to non-depository institutions that provide lending, money transmission, and payment services;
  • Expanding access to the payment system by unbanked and underbanked consumers, ensuring consistent treatment by applying the same rules to similar financial products;
  • Developing policies tailored to the unique challenges of formerly incarcerated people;
  • Considering the benefits and costs of preempting state law where conflicts can impede the provision of valuable products and services, such as the regulation of FinTech companies engaged in money transmission;
  • Establishing independent review of the Bureau’s regulatory cost-benefit analyses by staffing an office of cost-benefit analysis at the Bureau and or by submitting its analyses to the Office of Information and Regulatory Affairs for review;
  • Exercising caution (a recommendation for the Bureau, Congress, and other federal and state regulators) in restricting the use of nonfinancial alternative data;
  • Creating a unified regulatory regime for new and innovative technologies providing services similar to bank services;
  • Evaluating potential effects on inclusion as part of the Bureau’s cost-benefit analyses as appropriate;
  • Facilitating creditor access to immigrants’ credit information prior to their arrival in the United States in order to use that information in credit decisions;
  • Researching consumer reporting issues that arise in connection with a consumer’s bankruptcy.

Assessing the full impact of the report will require a more detailed review of its text, analysis, and many recommendations.  The significance of the report may depend, in part, on the reception it receives from Bureau leadership and other stakeholders in 2021 and beyond.

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Photo of David Stein David Stein

David Stein advises clients on credit reporting, financial privacy, financial technology, payments, retail financial services, and fair lending issues. He assists a broad range of financial services firms, consumer reporting agencies, financial technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and…

David Stein advises clients on credit reporting, financial privacy, financial technology, payments, retail financial services, and fair lending issues. He assists a broad range of financial services firms, consumer reporting agencies, financial technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and transactional matters.

Mr. Stein has significant experience advising clients on compliance with the FCRA, GLBA, ECOA, EFTA, E-Sign Act, TILA, TISA, FDCPA, Dodd-Frank Wall Street Reform and Consumer Protection Act, and FTC Act, as well as state financial privacy laws. Mr. Stein is a member of the firm’s fintech and artificial intelligence initiatives and works with clients on issues related to cutting edge technologies, such as blockchain, virtual currencies, big data and data analytics, artificial intelligence, online lending, and payments technology.

Mr. Stein previously served in senior regulatory, policy-making, and management positions at the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board (FRB). He played a significant role in developing regulations and policy on credit reporting, financial privacy, retail payments systems, consumer credit, fair lending, overdraft services, debit interchange, unfair or deceptive acts or practices, and mortgage origination and servicing. Mr. Stein draws upon his government experience in representing clients before the CFPB, the FRB, and other regulatory agencies and leverages his insights into the regulatory process to provide clients with practical, actionable advice.

Hensey A. Fenton III

Hensey Fenton specializes in providing advice and guidance to clients on legislative and regulatory strategies. Hensey counsels clients on a myriad of issues in the policy and regulatory space, including issues involving cybersecurity, financial services, artificial intelligence, digital assets, international trade and development…

Hensey Fenton specializes in providing advice and guidance to clients on legislative and regulatory strategies. Hensey counsels clients on a myriad of issues in the policy and regulatory space, including issues involving cybersecurity, financial services, artificial intelligence, digital assets, international trade and development, and tax.

Another facet of Hensey’s practice involves cutting-edge legal issues in the cybersecurity space. Having published scholarly work in the areas of cybersecurity and cyberwarfare, Hensey keeps his finger on the pulse of this fast-developing legal field. His Duke Journal of Comparative & International Law article, “Proportionality and its Applicability in the Realm of Cyber Attacks,” was highlighted by the Rutgers Computer and Technology Law Journal as one of the most important and timely articles on cyber, technology and the law. Hensey counsels clients on preparing for and responding to cyber-based attacks. He regularly engages with government and military leaders to develop national and global strategies for complex cyber issues and policy challenges.

Hensey’s practice also includes advising international clients on various policy, legal and regulatory challenges, especially those challenges facing developing nations in the Middle East. Armed with a distinct expertise in Middle Eastern foreign policy and the Arabic language, Hensey brings a multi-faceted approach to his practice, recognizing the specific policy and regulatory concerns facing clients in the region.

Hensey is also at the forefront of important issues involving Diversity, Equity and Inclusion (DEI). He assists companies in developing inclusive and sustainable DEI strategies that align with and incorporate core company values and business goals.

Prior to joining Covington, Hensey served as a Judicial Law Clerk for the Honorable Judge Johnnie B. Rawlinson, United States Court of Appeals for the Ninth Circuit. He also served as a Diplomatic Fellow in the Kurdistan Regional Government’s Representation (i.e. Embassy) in Washington, DC.

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