Kicking Them While They're Down

TransUnion takes a punch at damaged CFPB

That didn’t take long at all.

Just days after the Consumer Financial Protection Bureau (CFPB) was faced with a setback when the 5th Circuit Court of Appeals ruled the agency’s funding mechanism is unconstitutional, TransUnion filed a motion to dismiss the CFPB’s case against the credit rating agency.

A Consumer Champion Takes a Hit

TransUnion is facing a CFPB suit alleging the use of deceptive marketing tactics.

The CFPB’s most recent action against TransUnion alleges that the company is a repeat offender when it comes to deceptive tactics and that the company has flouted past agreements with the CFPB:

The order was issued to stop the company from engaging in deceptive marketing, regarding its credit scores and other credit-related products. After the order went into effect, TransUnion continued its unlawful behavior, disregarded the order’s requirements, and continued employing deceitful digital dark patterns to profit from customers. The Bureau’s complaint also alleges that TransUnion violated additional consumer financial protection laws.

“TransUnion is an out-of-control repeat offender that believes it is above the law,” said CFPB Director Rohit Chopra. “I am concerned that TransUnion’s leadership is either unwilling or incapable of operating its businesses lawfully.”

Now, it appears TransUnion wants to escape any responsibility.

It’s noteworthy that TransUnion is not denying the alleged misconduct. Instead, they are saying the CFPB, as a result of the 5th Circuit ruling, lacks legitimate authority to hold them accountable.

Law360 notes:

Companies fighting for dismissal of Consumer Financial Protection Bureau enforcement actions have begun invoking support from the Fifth Circuit's recent bombshell decision that the agency is unconstitutionally funded, with credit reporting giant TransUnion among the first to brandish the ruling.

In a late Thursday filing, TransUnion flagged the decision for the Illinois federal judge overseeing its lawsuit from the CFPB, which has sued the company for allegedly violating a 2017 consent order with the agency through continued deceptive marketing of a credit monitoring service and other products.

It seems likely MORE bad actors will seek to invoke the 5th Circuit’s decision in order to continue to abuse consumers.

Photo by Tom Pottiger on Unsplash

Speaking of Audacity - OppFi Fights to Continue Charging Triple Digit Interest Rates

Fintech lender OppFi just won’t stop when it comes to the quest to charge triple digit interest rates.

California’s Department of Financial Protection and Innovation (DFPI) has accused OppFi of usury for charging interest rates of 160%. OppFi partners with Utah-based Finwise on the loans, using a “rent-a-bank” scheme to attempt to circumvent state interest rate caps.

Endless Quest: OppFi and the Fight to Charge Triple Digit Interest Rates

Not gaining ground with previous claims, OppFi has filed yet another ridiculous challenge to the California DFPI’s suit.

Law360 reports:

But OppFi argued in its cross-complaint that DFPI is holding it to an unfair, arbitrary standard. What determines "true lender" status isn't written down in any California statutes or regulations, and the agency didn't use to enforce California's lending laws this way before the 36% cap came along in 2019, the company said.

As a result, OppFi said that it and other fintechs like it are now facing "an existential threat to their businesses" — not to mention potentially hefty fines — based on a "vague and amorphous" true lender standard that DFPI has adopted "without any formal notice at all, much less fair or adequate notice."

"Because DFPI did not submit its 'true lender doctrine' to the APA's rulemaking process, it is invalid as an 'underground regulation' and cannot be enforced," OppFi wrote, referring to California's version of the Administrative Procedure Act.  

Here again, OppFi is NOT saying it is not committing usury - it IS saying that it is allowed to offer loans at usurious rates because of some imagined ambiguity in the California law.

The ambiguity? That California law didn’t have a 36% rate cap BEFORE 2019.

This is just absurd - and seems likely to be dismissed - just as a California judge was not at all receptive to OppFi’s claims that Finwise was the “true lender” and therefore, could export Utah’s rates to California.

Still, OppFi is a relentless predator - seeking every possible advantage in order to extract every last dollar from the most vulnerable consumers.