On September 17, Consumer Financial Protection Bureau (“CFPB”) Director Kathleen Kraninger sent letters to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell stating that the CFPB “has determined that the for-cause removal provision of the Consumer Financial Protection Act . . . is unconstitutional.”  The Bureau now affirms that the for-cause removal provision

On January 23, 2019, the CFPB announced a settlement with Mark Corbett following an investigation by the Bureau, the Arkansas Attorney General, and the South Carolina Department of Consumer Affairs into Mr. Corbett’s brokerage of contracts offering high-interest credit to veterans.  As detailed in the consent order, Mr. Corbett facilitated high-interest contracts between veterans and investors marketed as purchases of the veterans’ future pension and disability payments.  Pursuant to the contracts, veterans would receive a lump-sum payment from investors in an amount ranging from a few thousand to tens of thousands of dollars, and would then be obligated to repay the investors by assigning to the investors all or part of the veterans’ pension or disability payments.  The repayment obligations typically lasted from five to ten years, and resulted in a repayment amount far greater than the initial lump-sum payment.

The Bureau found Mr. Corbett violated Sections 1031 and 1036 of the Consumer Financial Protection Act of 2010 (“CFPA”) by: (i) misrepresenting to consumers that the contracts were valid and enforceable when, in fact, the contracts were void because the veterans’ pension payments are unassignable under federal law; (ii) misrepresenting to consumers that the contracts involved a purchase of payments rather than high-interest credit; (iii) misrepresenting to consumers when they would receive funds under the contracts; and (iv) failing to disclose to consumers the applicable interest rate for the credit offered by the contracts.

Continue Reading CFPB Announces Settlement with Broker of High-Interest Credit Offers to Veterans

On March 17, 2017, the U.S. District Court for the Eastern District of North Dakota dismissed without prejudice the CFPB’s complaint against third-party payment processor Intercept Corporation and two of its executives for failure to state a claim.

The CFPB’s June 2016 complaint alleged that defendants had violated the Consumer Financial Protection Act (the “CFPA”)