As part of a last-minute flurry of rulemaking and guidance before President-elect Trump takes office, the Consumer Financial Protection Bureau this week released a report recommending states “strengthen” consumer protections by making several changes to their laws and regulations, including banning so-called “junk fees.”
In the report, the CFPB encouraged states to “refresh” their unfair or deceptive acts or practices statutes to address the challenges of the modern economy. The bureau said that “large companies and their lawyers” have developed “more advanced tricks… to increase profits at the expense of American families.” It also said modern technology has supercharged the ability to commit scams and fraud.
The CFPB had six recommendations for states:
- Ban “abusive” practices in state law to end schemes that obscure product features or use power imbalances to gain advantage and increase costs.
- Ensure that state attorneys general have adequate investigatory authorities and can pursue remedies that protect consumers and make them whole.
- Remove evidentiary hurdles, such as the requirement that plaintiffs prove individual monetary harm, that frustrate private rights of action.
- Ensure that consumer protection law also protects businesses.
- Authorize forms of private enforcement that can remain viable in the face of forced arbitration.
- Ban common schemes in the modern economy, including junk fees and abuse of personal data.
The report is one of the more recent in a series of actions taken by the CFPB in the final days of the Biden administration, including proposed or finalized rulemakings on contract language, nonbanks and lending, and medical debt. This week, the American Bankers Association and 52 state bankers associations asked Trump to pause all open rulemakings and review the policies enacted by regulators during the last four years.
