An interpretive rule that declared essentially no limits on states’ ability to enforce provision of the Consumer Financial Protection Act (CFPA) was rescinded as of Thursday, the Consumer Financial Protection Bureau (CFPB) said in a Federal Register notice published the same day.
The notice states that the bureau’s interpretive rule, “Authority of States to Enforce the Consumer Financial Protection Act of 2010,” published in May 2022 was improper. Among the claims by the current CFPB is that the CFPA language articulating limits on the bureau’s enforcement authority also applies to states, even if that language (section 1042 of the act) doesn’t specifically say so.
“Had Congress intended for State enforcement authority under section 1042 not to be subject to these limits (even though the Bureau is subject to those limits), it would have said so explicitly,” the notice states.
The bureau also on Thursday withdrew, effective immediately, three proposed rules:
- “Protecting Americans From Harmful Data Broker Practices” (Regulation V): This proposed rulemaking was published Dec. 13, 2024, and would, the notice states, have implemented certain Fair Credit Reporting Act (FCRA) definitions of consumer report; consumer reporting agency; and certain FCRA provisions governing when consumer reporting agencies may furnish, and users may obtain, consumer reports. “The Bureau is withdrawing this NPRM in light of updates to Bureau policies,” the notice states. “Although the proposed rule intended to implement portions of the FCRA, in many respects it did so in a manner not aligned with the Bureau’s current interpretation of the FCRA, which it is in the process of revising, and its changed policy objectives.”
- “Prohibited Terms and Conditions in Agreements for Consumer Financial Products or Services” (Regulation AA): The proposed rule, published this Jan. 14, addressed contracts of adhesion. Thursday’s notice says the rule would have prohibited certain contractual provisions in agreements for consumer financial products or services. “The Bureau is withdrawing the proposed rule in light of changes in and updates to its policies, agenda, and objectives,” the notice states. “The Bureau is re-evaluating the need for this proposed rule’s prohibition on the use of certain contractual provisions that limit expression or purport to waive substantive consumer legal rights and protections, or their remedies, under State or Federal law.” It says the rule is “largely duplicative” of the Federal Trade Commission’s (FTC) Credit Practices Rule.
- “Electronic Fund Transfers Through Accounts Established Primarily for Personal, Family, or Household Purposes Using Emerging Payment Mechanisms”: This proposed interpretive rule, published this Jan. 15, was intended to help firms (market participants) evaluate existing statutory and regulatory requirements governing electronic fund transfers (EFTs). The notice says the CFPB “is continuing to evaluate the need for guidance related to the legal requirements associated with EFTs and will take further action if deemed necessary.”
Federal Register notices:
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