Enforcement

The Consumer Financial Protection Bureau (CFPB) has determined that Capital One marketed certain “add-ons” – fee-based services added to credit card accounts – in a way that violated federal law. As a result of enforcement action by the CFPB, Capital One agreed to automatically refund $140 million to 2 million Capital One customers.

Capital One customers: If you’re eligible for a refund and you have an open account, the refund will be automatically credited to your account. If you’re eligible but no longer have an account with Capital One, a check will be mailed to you. You should expect to receive your refund later this year. You don’t need to take any action to get your refund.

If you have questions about whether you are entitled to a refund, please contact Capital One.

Watch out for scammers claiming that they will get you a refund: When large numbers of consumers get refunds, scammers sometimes pop up. The scammer may charge you a fee or try to steal your personal information. If someone tries to charge you, tries to get you to disclose your personal information, or asks you to cash a check and send a portion to a third party in order to “claim your refund,” it’s a scam. Call us at (855) 411-CFPB.

Today, the CFPB is posting three final rules and one interim final rule that we have sent to the Federal Register for publication. The rules deal with our procedures and practices related to enforcing federal consumer financial law. These rules allow the agency to stay abreast of developments in consumer financial law, investigate possible violations of these laws, and bring actions to enforce these laws, helping us better serve our mission of protecting American consumers.

The three final rules deal with the agency’s investigative and adjudicative processes and our interactions with state law enforcement authorities. We published interim versions of these rules in July of 2011. During an extensive comment period that followed, we received and evaluated public input on the interim rules, and we have made certain changes to improve and clarify the rules.

Rule Relating to Investigations: This rule describes the CFPB’s procedures for investigating whether persons have engaged in conduct that violates federal consumer financial law. Similar to rules used by other regulators, it lays out an efficient and fair process for conducting CFPB investigations. This rule sets forth our authority to conduct investigations, including the procedures for issuing civil investigative demands. It also describes the rights of persons from whom the CFPB seeks to compel information in investigations.

Rule of Practice for Adjudication Proceedings: Under this rule, the CFPB can conduct administrative adjudications (hearings) to ensure or enforce compliance with federal laws and regulations. In developing this rule, we leveraged the experiences of other regulators and reviewed the public comments on the interim rule to create a fair and expeditious process for resolving administrative enforcement actions. The result is an adjudication process that is streamlined and protects parties’ rights to fair and impartial proceedings.

State Official Notification Rule: This rule is designed to help the CFPB stay informed about state-level legal developments relating to the Dodd-Frank Act. It describes the process through which state officials update the agency on certain legal actions they bring to enforce compliance with certain provisions of the Dodd-Frank Act and regulations the CFPB may issue. Proper notification will help ensure that the law is being enforced in a consistent manner.

The last rule is an interim final rule that implements the Equal Access to Justice Act (EAJA). We are now asking for public input on this interim final rule.

EAJA Implementation Rule: This rule implements the Equal Access to Justice Act. The Act provides that certain prevailing parties in administrative proceedings can recover attorney fees and expenses. The rule sets forth who can seek to recover these costs and how to do so. It is based on model rules and rules used by other agencies. The public can comment on the interim final rule for 60 days after its publication in the Federal Register.

These rules will be published in the Federal Register in the near future and will be effective immediately upon publication. The versions linked in this post contain the text as we submitted them.

Ori Lev is the CFPB’s Deputy Enforcement Director for Litigation.

Today, we proudly announced a joint effort with state Attorneys General and the Department of Defense to combat scams directed at servicemembers, veterans, and their families. Recognizing that this population is often targeted by financial scams, we created the Repeat Offenders Against Military Database (ROAM) to track companies and individuals who repeatedly target the military community. (more…)

Do you have information about a company that you think has violated federal consumer financial laws? Are you a current or former employee of such a company, an industry insider who knows about such a company, or even a competitor being unfairly undercut by such a company? If so, the CFPB wants to hear from you. Tipsters and whistleblowers are encouraged to send information about what they know to whistleblower@cfpb.gov. (more…)

The Dodd-Frank Act requires the CFPB to share consumer complaint information with the FTC and other state and federal agencies. The goal is to make sure agencies coordinate their enforcement of consumer financial protection laws. Recently, we signed an agreement with the FTC that moves us one step closer to achieving that goal. The agreement allows the CFPB to access consumer complaints within the FTC’s Consumer Sentinel system. In addition, we will share complaint information that we receive from consumers with the Sentinel database, subject to appropriate privacy protections and access restrictions. (more…)

Today, I addressed the National Association of Attorneys General. It was good to see some old friends and new faces – State attorneys general from around the country. Prior to coming here, I had the honor of serving as Ohio’s Attorney General. In that role, I had the privilege of being on the front lines of consumer protection, and that experience is one reason I was excited and proud to join the new consumer bureau.

State attorneys general will be an important partner for the Bureau because they understand as well as anyone the kinds of problems that consumers – their constituents – face. There’s another reason, too: Congress has emphasized that we are to enforce Federal consumer financial law consistently, without regard to whether a financial services provider is a depository institution or not, in order to promote fair competition. That work will require the sustained collaboration of State and Federal regulators, including both the consumer bureau and State attorneys general.

With new technology and fierce competition, financial services companies are developing new and fast-changing products and services that cut across existing regulatory frameworks. Leveling the playing field by treating the participants in the marketplace on par, regardless of their corporate structure or charter choice, is a new approach that will benefit both consumers and financial companies. If we learned anything from the financial crisis, it is that gaps in Federal oversight can contribute to systemic failure by allowing unwarranted and unsustainable risks to be created in the economy.

Of course, State attorneys general also know that leveling the playing field across different kinds of financial providers and products and services is essential and will require sustained resources. Tens of thousands of so-called “non-bank” companies offer consumer financial products and services – they just don’t take deposits like a bank or thrift. These companies need to be subject to similar oversight and enforcement as banks if they are competing for customers with similar products and services in the same marketplace. Our nation has always maintained independent funding for bank regulators apart from the political process – and the consumer bureau, charged with regulating both banks and non-banks, has been set up the same way.

The consumer bureau will depend on the expertise and experience of State attorneys general as we work together to protect consumers. We will be more effective and efficient because of this partnership, and I know my visit with the State attorneys general today is another step toward a sustained effort to insist on fairness in the marketplace.

Richard Cordray is the CFPB Assistant Director for Enforcement