CFPB Enforcement Director Says Agency Focuses on Evolving Consumer Finance Risk

CFPB Enforcement Director Eric Halperin identified areas of evolving risk that can disrupt a "level playing field" in the market for consumer financial products.

In his remarks before the National Consumer Law Center Consumer Rights Litigation Conference, Mr. Halperin highlighted the risks associated with illegal junk fees, the "surveillance economy," automated decision-making and predatory lending, all of which disproportionately affect communities of color and lower-income Americans. He focused on the following:

• Junk Fees. Mr. Halperin described CFPB enforcement actions taken to address "unnecessary, unavoidable, or surprise charges that inflate prices while providing little to no benefit to the consumer."
• Surveillance Economy. Mr. Halperin described the "surveillance economy" as consisting of markets where the "product" is the consumer data. He said that the use of such data may influence consumers' ability to obtain housing, employment and access to credit. He said that the CFPB is "paying close attention" to how companies utilize the data and the accuracy of the data.
• Automated Decision-making. Mr. Halperin said that there are risks to consumers that emerge from financial institutions' reliance on "opaque algorithms" and automations to supplement "basic decision-making." He cautioned that when there are automation errors, it is the consumer that may suffer harm. He emphasized that the use of these technologies does not insulate a company from its legal obligations.
• Predatory Lending. Mr. Halperin reiterated the CFPB's continued focus on predatory lending in all its evolving forms. He said that predatory lending is covered under the CFPB's authority over "unfair, deceptive and abuse acts and practices" when targeted at financially vulnerable consumers.

Mr. Halperin said that the CFPB will continue to engage in enforcement actions against banks and companies that impose illegal junk fees, misuse consumer data, rely on faulty automated systems and engage in predatory lending. He also emphasized the need for regulatory oversight to ensure that consumer protection standards keep up with the increasing complexity and automation in the world of consumer finance.