October 15, 2020

Partner Allen Denson comments for Law360 on CFPB enforcement case volume

Law360 spoke to Hudson Cook Partner Allen Denson about the Consumer Financial Protection Bureau's (CFPB) recent surge in enforcement activity, coming off its busiest quarter since President Trump took office. According to the article, the CFPB's online enforcement database shows that the Bureau brought 19 civil and administrative actions from July through the end of September, more than double as compared to the same quarter in 2019.

"I think that there were a lot of things pent up that are just now reaching their culmination and coming out," noted Allen. "Investigations tend to take years, so that's why you're now seeing the uptick." Allen also noted that the agency is settling into the Kraninger era after a difficult transition phase. "During the [Mulvaney] interim period, a lot of investigations were halted while they were reviewed, and there weren't really new investigations being started," Allen said. "Once Kraninger took over as head, the CFPB restarted initiating new investigations, and it takes time for those investigations to make their way through fact-finding, recommendations, and then negotiations over settlement or filing of lawsuits."

Law360 reports that the debt collection industry has recently been singled out, with the CFPB teaming up with the Federal Trade Commission and other state and federal partners for "Operation Corrupt Collector," a nationwide sweep targeting the use of threats, harassment and other illegal tactics by debt collectors. Allen noted that debt-relief service providers have similarly faced increased attention from CFPB investigations and enforcement in recent months. "There seems to be a lot of focus on fraudulent practices," Allen said of the agency's enforcement work. "Early on, Kraninger said this was going to be a focus of hers, and she has stuck to that."

With the election looming, Allen also said that a crop of pandemic-related investigations are on the horizon. Even if there is turnover in the White House and Kraninger is replaced, Allen doesn't see a drastic enforcement slowdown. "I could see enforcement activity even increasing from here. I don't expect that there would be a complete cessation of activity like we saw in 2018."

Allen is a partner in the firm's Washington, DC office. His practice focuses on representing small dollar lenders, sales finance companies, Fintech companies, banks, auto dealers and other financial services companies in government investigations, examinations and regulatory enforcement actions. He represents clients before the CFPB, FTC, DOJ, federal prudential regulators, as well as state attorneys general and financial regulatory agencies. He also assists clients in complying with federal consumer financial law.

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