A Shift to Consumer Protection at the CFPB

Post authored by: Kasim Carbide

Created in 2011, the Consumer Financial Protection Bureau (the “CFPB”) is a watchdog agency responsible for consumer protection and fraud prevention. Most banks, credit unions, originating and depository financial institutions, securities firms, debt collectors, and various other financial services industries fall under the purview of the CFPB. Notably, the CFPB pays special attention to financial technology and services companies and financial institutions and constantly monitors services and products to ensure consumers are protected.

Recently, the CFPB filed suit in the United States District Court for the Northern District of Illinois against BrightSpeed Solutions, Inc. (“BrightSpeed”), an Illinois based payment processor, and its Chief Executive Officer for fraud and unfair and deceptive business practices. BrightSpeed served the high-risk telemarketing businesses, and provided its services for companies that otherwise would not qualify for payment processing services due to the high-risk nature of the industry. In short, BrightSpeed purported to provide virus software and technical support services, but actually scammed consumers into purchasing unnecessary and expensive computer software. To further deceive consumers, BrightSpeed claimed affiliation with well-known technology companies (i.e., Microsoft, Symantec, etc.), but they were not affiliated with those entities in any way.

The BrightSpeed suit demonstrates a palpable shift in priorities when compared to the initiatives under the Trump administration which many viewed as muzzled and soft. While 2019 saw a sharp increase in consumer complaints to the CFPB by as much as 60%, the relief obtained (i.e., 700 million) paled in comparison to the relief obtained in 2015 (i.e., 5.6 billion). This disparity was due to President Trump’s pursuit of smaller fringe companies, rather than focusing on larger companies.

Now, under the Biden administration, the Acting Director of the CFPB, David Uejio, seeks to proactively return to the CFPB’s roots and pursue small and large companies. Mr. Uejio has further indicated that he believes “aggressive action” moving forward to protect consumer markets to work better for all Americans.

This shift at the helm of the CFPB demonstrates a commitment to protect disadvantaged populations, while rescinding easy-going policies from the Trump administration. Based on the current policy agenda, as well as suits like BrightSpeed, the CFPB clearly demonstrates its sentiment to protect and inform so many Americans struggling due to the challenges of a global pandemic. This new policy should allow disadvantaged populations to take a sigh of relief knowing the CFPB will aggressively pursue any and all companies engaging in consumer fraud or deceptive practices.

About the Author:


Kasim Carbide concentrates his practice in Corporate Law, Bank Secrecy Act/Anti-Money Laundering Compliance, and counseling FinTech startups. When he is not reading or billing, Kasim enjoys cooking, watching the Office, and playing Catan with family and friends.

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