May 23: Recent CFPB Activities

The Consumer Financial Protection Bureau

The Consumer Finance Protection Bureau (CFPB) is responsible for consumer protection in the financial sector. CFPB’s jurisdiction includes credit unions,  banks, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, and other financial companies operating in the United States. NASCUS closely monitors CFPB developments and responds to requests for comments on rules impacting the credit union system.

Recent Updates 

CFPB issued an Interpretive Rule related to “Buy Now, Pay Later” products. 

The Interpretive Rule addresses the applicability of Regulation Z to certain lenders marketing their loans as “Buy Now, Pay Later.”  This interpretive rule clarifies that these lenders are “card issuers” for purposes of Regulation Z.  Additionally, it clarifies that such lenders that extend credit are also “creditors” subject to certain provisions of Regulation Z, including those provisions governing periodic statements and billing disputes.

Comments are due on this Interpretive Rule by August 1, 2024.

You can access the Interpretive Rule here:


CFPB Takes Action to Ensure Consumers Can Dispute Charges and Obtain Refunds on Buy Now, Pay Later Loans

The Consumer Financial Protection Bureau (CFPB) today issued an interpretive rule that confirms that Buy Now, Pay Later lenders are credit card providers. Accordingly, Buy Now, Pay Later lenders must provide consumers some key legal protections and rights that apply to conventional credit cards. These include a right to dispute charges and demand a refund from the lender after returning a product purchased with a Buy Now, Pay Later loan. The CFPB launched its inquiry into the rapidly expanding Buy Now, Pay Later market more than two years ago and continues to see consumer complaints related to refunds and disputed transactions. Today’s action will help bring consistency to this market.

The Buy Now, Pay Later market has expanded rapidly over the past few years. Lenders advertise buying products over four simple payments. Products are marketed as a way to help consumers pay for expensive products and services over time without having to pay interest. Today, both products, like televisions and gaming systems, and services, like airline tickets and cruises, can be purchased through Buy Now, Pay Later products. Buy Now, Pay Later products are popular across ages, races, and income levels. Read more


CFPB Takes Action Against Western Benefits for Swindling Student Loan Borrowers

The Consumer Financial Protection Bureau (CFPB) took action against Western Benefits Group for charging illegal advance fees for student loan debt relief services and misrepresenting to consumers that advance fees would go toward paying down their loans. The CFPB found Western Benefits also misrepresented that it was affiliated with and endorsed by the Department of Education, and that the company would help consumers consolidate student loans, lower consumers’ monthly student loan payments, or obtain loan cancellation. The CFPB is ordering Western Benefits to permanently cease operations and pay a $400,000 penalty to be deposited in the CFPB’s victims relief fund. The order also rescinds all existing agreements with consumers. Read more


CFPB Sues SoLo Funds for Deceiving Borrowers and Illegally Extracting Fees

The Consumer Financial Protection Bureau (CFPB) today sued the online lending platform SoLo Funds for deceiving borrowers about the total cost of loans. The CFPB alleges that SoLo markets itself as a consumer-friendly alternative to high-cost, short-term loans. Despite advertising zero-interest loans or 0% APR loans, SoLo’s use of dark patterns ensures that almost every borrower pays a fee, in the form of a “tip” or “donation.” The CFPB is seeking, among other things, injunctions against SoLo to prevent future violations, monetary relief for borrowers, forfeiture of ill-gotten gains, and a civil money penalty.

SoLo Funds is a nonbank financial technology company headquartered in Los Angeles. Since at least 2018, SoLo has operated a digital lending platform through which consumers can obtain short-term loans. The maximum SoLo loan amount is $575, and the minimum is $20. SoLo brokers loans between consumer borrowers and investors. SoLo requests consumers pay fees to lenders and to SoLo, which the company refers to as “tips” and “donations,” respectively. SoLo services and collects on loans brokered through its platform. Read more