- Fair Lending – Fair lending and a new focus on racial equity in all aspects of consumer finance will continue to influence decision making across federal and state systems heavily, with the Department of Justice and Consumer Financial Protection Bureau (CFPB) leading the way. We are already seeing increased enforcement activity in traditional hot-button areas like redlining and serving limited-English-proficiency borrowers along with those that have historically received less scrutiny, like small business credit and housing appraisal bias. These trends will only accelerate in 2022. Consumer finance companies should reassess holistically their approach to penetrating minority markets and achieving fairness and equity across a broad range of business activities.
- Enforcement – We expect to see a significant rise in enforcement of Unfair or Deceptive Acts or Practices (UDAPs) under the Federal Trade Commission (FTC) Act, and in the CFPBs enforcement of Unfair, Deceptive, or Abusive Acts or Practices (UDAAPs). Even with the outcome of AMG Capital Management v. FTC, the FTC has shown – through its recent scrutiny of for-profit schools, online review practices and privacy and data protection – that it intends to advance an aggressive consumer protection agenda, particularly in the tech sector and in areas where companies serve vulnerable populations. The CFPB, meanwhile, continues, for example through its walk back of guidance on what constitutes an “abusive” policy, to signal it will use its broad UDAAP authority to police predatory conduct and as a tool to reform market practices it views as unfair to consumers. Now that the CFPB’s senior leadership is finally in place, we expect UDAAP enforcement to increase materially in 2022.
- Debt Collection/Credit Reporting - With the November 30, 2021 effective date of the CFPB’s significant regulations under the Fair Debt Collection Act, combined with continued knock-on effects spurred by the pandemic, we can expect heavy activity in the debt collection space next year. States are also adopting new debt collection regulations that will impact creditors as well as debt collectors. Moreover, as consumers are increasingly filing complaints over inaccuracies reported to consumer reporting agencies by creditors and debt collectors, we anticipate that increased enforcement and litigation will also likely occur.
- End of the Mortgage Payments/Evictions and Student Loan Payment Moratoriums – With the moratoriums on mortgage payments/evictions and student loan payments ending, we expect to see significant supervisory, enforcement and litigation activity. As bills start arriving in consumers’ mailboxes, and ordinary servicing resumes, there may well be confusion over what is owed and when, leading to individual and class action litigation and government investigations/enforcement activity.
About the Authors
Greenberg Traurig, LLP Shareholder Gil Rudolph is the Washington, D.C.-based Co-Chair of the firm's Financial Regulatory and Compliance Practice. He focuses his practice on the representation of finance companies, banks, mortgage originators and servicers, lease company transactions, retail installment transaction financers and other consumer financial service providers in regulatory and litigation matters.
Greenberg Traurig, LLP Shareholder Benjamin M. Saul is a Washington, D.C.-based member of firm’s Financial Regulatory and Compliance Practice and Leader of its Consumer Finance Enforcement Task Force. For two decades, Ben has handled high-stakes regulatory, enforcement, litigation and transactional matters for corporate and individual clients in the fintech, consumer finance, specialty finance, payments, and banking sectors.
Greenberg Traurig, LLP Shareholder Lisa M. Simonetti focuses on the defense of complex litigation, with broad experience representing clients in the financial services industry, including regional and national banks, credit card issuers, mortgage bankers, various types of loan servicers, consumer finance companies and third-party collectors. She is based in Los Angeles.