We reported on developments with the Consumer Financial Protection Bureau (CFPB) back in January and March. The hospitality industry has an interest in the development of the CFPB because the agency has broad authority to prevent acts or practices which are "unfair," "abusive" or "deceptive." In connection with that mission, the CFPB may revisit or invent definitions for "deceptive," "unreasonable advantage of consumers' . . . reasonable reliance" and "covered persons."
Staking Out Its Turf . . . While the rumored recess appointment of the CFPB director did not come to pass, the Federal Register did publish on May 31 a list of rules and orders that the CFPB would have authority to enforce. While that list isn't final, it does provide some insight as to the scope of the CFPB's broad regulatory power. Here are some the listed rules and orders that may be of particular interest to the hospitality industry:
- The Federal Trade Commission’s Telemarketing Sales Rule (16 CFR Part 310) and Rule Concerning Cooling-Off Period for Sales Made at Homes or at Certain Other Locations (16 CFR Part 429), as well as rules pertaining to the Preservation of Consumers’ Claims and Defenses (16 CFR Part 433), Mail or Telephone Order Merchandise (16 CFR 435), and Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunities (16 CFR Parts 436 and 437).
- The Department of Housing and Urban Development rules regarding Land Registration (24 CFR Part 1710) and Purchasers’ Revocation Rights, Sales Practices, and Standards (24 CFR Part 1715).
- Real Estate Settlement Procedures Act (RESPA), 24 CFR Part 3500.
- The rules regarding the privacy of consumer financial information currently enforced by the Fed, the FDIC, the OCC and the OTS.
. . . With Some Caveats
Not surprisingly, we found some interesting nuggets when reviewing the release:
- This list was published by the Secretary of the Treasury, which has interim authority to perform certain CFPB functions (see footnote 6 in the notice). Even so, as of June 12, the CFPB’s website had no mention of either the May 31 notice or the list of rules proposed to be enforced by the CFPB.
- As to the FTC’s Telemarketing Sales Rule, the CFPB will only “have authority to enforce in some circumstances” that rule. While specific exceptions to CFPB enforcement authority were spelled out elsewhere (i.e., Fair Credit Reporting), the notice does not detail what was meant by “in some circumstances” with respect to the Telemarketing Sales Rule.
- The notice states very clearly that it does not in any way limit the CFPB’s enforcement authority as defined by Dodd-Frank:
[T]he inclusion or exclusion of any rule or order would not alter the CFPB’s authority. In addition, section 1063(i) does not require the CFPB to update, correct, or otherwise maintain the final list. Because the list under section 1063(i) reflects the CFPB’s interpretation of its authority under [Dodd-Frank] and relates to agency organization, procedure and practice, the list is not subject to the notice-and-comment requirements of the Administrative Procedure Act. Nevertheless, the Bureau invites public comment during a thirty-day period.