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Financial Services Law Insights and Observations

FTC outlines TILA and EFTA efforts in letter to CFPB


Federal Issues

On May 20, the FTC released a letter to the CFPB detailing its enforcement activities related to Regulation Z (TILA), Regulation M (the Consumer Leasing Act or CLA), and Regulation E (the EFTA) during 2023.

The FTC noted its TILA enforcement efforts related to automobile financing; specifically, the Commission detailed two actions involving deceptive car dealer practices. The Commission reported its finalization of the CARS Rule to address the sale, financing and leasing of motor vehicles. The Commission highlighted its “junk fees” rulemaking and stated that such fees cost consumers tens of billions of dollars each year and undercut honest businesses. The Commission noted its military credit and leasing initiatives as well as its report to Congress on consumer issues affecting American Indian and Alaska Native populations, such as impersonation scams and predatory lending.

The Commission also discussed its work pertaining to the EFTA and Regulation E. The Commission referenced its 2023 enforcement actions, including a case involving negative options. The Commission described its proposed amendments to its 1973 Negative Option Rule which included the addition of a “click to cancel” provision requiring sellers to make cancellation as easy for consumers as it was to sign up. Finally, the Commission confirmed that it released guidance cautioning consumers about money transmission payment apps and their potential for exploitation by scammers.