The CFPB’s First Enforcement Action Under Acting Director Mulvaney and Proposed Amendments to the CFPB’s Trial Disclosure Policy

Ballard Spahr partners Alan Kaplinsky and James Kim discuss the implications of the CFPB’s first enforcement action under Acting Director Mulvaney and analyze the amendments proposed by the CFPB to its trial disclosure policy (TDP). James is a former CFPB Senior Enforcement Attorney. He provides background on the prior litigation between the CFPB and the target of the enforcement action and reviews the allegations in the CFPB’s complaint. He also provides observations on the action’s significance for the industry it targets and for the CFPB’s approach to UDAAP enforcement actions under its new leadership and shares his expectations for how the action is likely to proceed. With regard to the proposed TDP amendments, James discusses the procedural and substantive changes contained in the proposal and how such changes would address the current policy’s shortcomings. He also analyzes the effect that a trial disclosure waiver obtained under the amended policy would have on a company’s potential liability in federal and state enforcement actions and private litigation and discusses the proposal’s state sandbox option, the availability of waivers to companies offering traditional consumer financial products or services, and the relationship between the TDP and the CFPB’s no-action letter policy.