On February 8, the Federal Trade Commission (FTC) wrote to the CFPB to describe the FTC’s enforcement activities in the area of equal credit opportunity. Under the Dodd-Frank Act, the CFPB shares such enforcement authority with the FTC. The letter does not mention any actual enforcement actions by the FTC, but describes research and policy development efforts by the FTC and publication of educational materials on the subject. Research and policy development included a conference jointly hosted with the NAACP of Georgia, a workshop on online lead generation (at which it was learned that, when firms sell information, they collect more information and deny more mortgage applications, although consumers who do qualify benefit from lower rates), and a planned survey on consumer experience buying and financing automobiles from dealerships. The FTC’s education efforts included issuance of a blog post of the NAACP conference and issuance of information on its business blog about its revamped Business Center website.

On February 11, at  a hearing entitled “The CFPB’s Assault on Access to Credit and Trampling of State and Tribal Sovereignty,” members of the House Financial Services Committee Subcommittee on Financial Institutions and Consumer Credit urged the CFPB not to disregard state laws with its pending proposal to regulate payday loans.  Many states regulate those loans.  Acting Deputy CFPB Director David Silberman repeatedly denied that states’ rights were a target of the CFPB; he asserted that any new payday lending regulation would merely set a floor beyond which states would be free to go.  However, the outline of the regulation released by the CFPB suggests that there should be a 60 day cooling off period before a payday borrower could get another payday loan, but some states, such as South Carolina, provide for a shorter two-day cooling off period.  During the course of the hearing, Subcommittee Chairman Randy Neugebauer (R-TX) asked Mr. Silberman whether Mr. Silberman had ever visited a small dollar credit store, and Mr. Silberman responded that he had not.  Chairman Neugebauer encouraged Mr. Silberman to do so before making a final decision.  Republican members of the Subcommittee expressed concern that a CFPB rule will deprive the poor of access to a needed source of emergency credit.  Democrat members complained of high interest rates and how payday loans become debt traps for the poor.

On February 23, the CFPB announced two enforcement actions against Citibank involving allegedly illegal debt sales and debt collection practices.    First, the CFPB ordered the bank to pay nearly $5 million to consumers and also pay a $3 million fine for selling credit card debt with “inflated” interest rates and for failing to forward payments quickly enough to the buyers.  The CFPB also required the bank to include provisions in its debt sales contracts prohibiting the buyer from ever reselling the debt.  It is not clear what laws prohibit debt sales or impose deadlines for forwarding payments other than the CFPB’s authority to characterize a practice as “unfair, deceptive, or abusive.”  Second, the CFPB sued the bank and two law firms it used to collect debts in New Jersey alleging that the law firms altered the dates and amounts owed mentioned in affidavits provided by the bank; the CFPB required the bank to obey a New Jersey court order requiring refunds of $11 million to consumers and foregoing of $34 million owed by almost 7,000 consumers (approximately $5,000 per consumer).