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Financial Services Law Insights and Observations


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  • CFPB Withdraws CID, Petition to Enforce CID is Moot Due to Lack of Subject-Matter Jurisdiction


    On June 8, the CFPB filed a petition to withdraw a 2015 CID issued to a financial services company concerning its structured settlement and annuity payment purchasing activities, and subsequently agreed to the dismissal of the petition to enforce the CID as moot due to lack of subject-matter jurisdiction. The action stems from a petition filed by the company to set aside the CID, arguing that structured settlements and annuity payment purchasing is not an extension of credit, nor qualifies as a consumer financial product. Therefore, the company claimed, its business activities do not fall under the CFPB’s UDAAP or Truth in Lending Act authority. The Bureau denied the petition, and in June 2016, it filed a memorandum in the U.S. District Court for the Eastern District of Pennsylvania for an order requiring the company to comply with the CID, asserting that “regulations authorize the Bureau to petition the district court in ‘any judicial district in which [that entity] resides, is found, or transacts business’ for an order to enforce the CID.” However, on June 5, the CFPB filed a notice to withdraw stating that “[b]ecause the CID is no longer active, the Bureau intends to soon dismiss the Petition,” and asked the court to “refrain from ruling on the petition.” The CFPB did not disclose a reason for its decision to withdraw the CID.

    Notably, before the dismissal, the U.S. Chamber of Commerce (Chamber) filed an amicus brief opposing the CFPB’s petition. The Chamber opined that, should the CFPB be allowed to issue CIDs under a “virtually unlimited definition of the term ‘financial advisory services,’” under which it would include “advice with a financial element offered in connection with transactions unrelated to a consumer financial product,” it would expand the Bureau’s jurisdiction beyond the limits of Dodd-Frank’s prohibition on unfair, deceptive, and abuse acts and practices.

    Courts CFPB CIDs UDAAP TILA Litigation Financial Advisers

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  • CFPB Report Urges Adoption of Standards for Marketing Financial Adviser Services to Seniors

    Federal Issues

    On April 18, the CFPB issued a report that reviews the marketing of investment adviser services to older Americans. The CFPB found that financial advisers use more than 50 different designations to market expertise in financial issues affecting seniors, which the CFPB claims creates confusion in the marketplace. The report includes detailed recommendations for the SEC and Congress related to (i) consumer education and disclosures, (ii) standards for the acquisition of senior designations, (iii) standards for senior designee conduct, and (iv) enforcement related to the misuse of senior designations. Among the recommendations, the CFPB suggests that policymakers consider requiring adviser education and standardized testing prior to obtaining a senior designation. The CFPB also suggests that the SEC and state policymakers consider increasing enforcement of misleading or other improper conduct by a holder of a senior designation and that state policymakers consider providing consumers with a private right of action to seek relief for the improper use of senior designations.

    CFPB SEC Seniors Financial Advisers

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