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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 Eric Mogilnicki Eric Mogilnicki

Combining his four years’ experience at the center of some of the nation’s most critical public policy debates as Chief of Staff to the late Senator Edward M. Kennedy, and his more than 20 years of experience advising and representing financial institutions, Eric…

Combining his four years’ experience at the center of some of the nation’s most critical public policy debates as Chief of Staff to the late Senator Edward M. Kennedy, and his more than 20 years of experience advising and representing financial institutions, Eric Mogilnicki focuses his practice on assisting financial services clients with investigations, examinations and enforcement actions by government regulators, including the CFPB, FTC, OCC, and FDIC. Over the past six years, Eric has been a national leader within the private bar on CFPB enforcement and policy issues. His regulatory experience spans the lifecycle of interactions with agencies, including:

counseling clients facing informal requests for information;

providing financial institutions and other interested parties with product reviews, mock examinations and other guidance prior to the commencement of examinations;

representing entities in responding to civil investigative demands, including Petitions to Withdraw the CID;

negotiating Consent Orders; and

assisting financial institutions in complying with Consent Orders.
   

Eric’s clients include major banks and credit card issuers, federal credit unions, and national financial trade associations. Eric also represents major corporations with financing subsidiaries that received CFPB scrutiny.

Eric chairs the American Bar Association Committee on Consumer Financial Services, and is a past chair of the Federal and State Trade Practices and the Litigation and Arbitration Subcommittees of that Committee. He is a Member of the American College of Consumer Financial Service Lawyers, and frequently writes and speaks on regulatory issues.

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.

David 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. David 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.

David 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. David 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.