The U.S. Consumer Financial Protection Bureau (CFPB) on Monday, April 3, issued a statement explaining the ban on misconduct in the consumer financial market.
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This ban was introduced in 2010 as a response to the crisis on Wall Street, which occurred two years earlier.
CFPB Director Rohit Chopra, in a statement released on April 3, recalled that as a response to predatory mortgage lending practices that led to the financial crisis, Congress banned misconduct in consumer financial markets. He noted that the latest clarification of the regulations is designed to create a basis through which federal agencies and state authorities will be able to hold accountable companies that are involved in ignoring the current legislation.
The CFPB clarifies that abusive behavior is manifested in the market by using illegal methods by players, including hiding key characteristics of products and services, using misunderstandings, and unequal opportunities in negotiations for selfish purposes.
The bureau also emphasizes that the use of business models, the successful implementation of which is objectively impossible, similar to schemes that were actively used shortly before the mortgage crisis, can be qualified as offensive behavior. Speculation about unwitting clients and kickbacks can also be described as offensive.
The CFPB earlier this year launched investigations into those companies that use opaque practices in the field of subscriptions. These are websites that are used to conceal information, complicate the process of canceling subscriptions, and influence users to force them to click on links and make purchases.
The Bureau has also made adjustments to the current rules. These innovations provide that lenders who issue more than 100 loans to small businesses per year should collect and analyze demographic, geographical, and other data. The Credit Census will provide publicly available key data about this market. Also, the collection of information will be a guarantee of honest servicing of small businesses in the field of lending.
As we have reported earlier, CFPB enhances data privacy and cybersecurity rules.
Serhii Mikhailov
Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.
