Business Law

CFSC Meeting – July 20, 2022

This is a reminder that our next meeting is Wednesday, July 20, 2022 at 11:00 am by Zoom (link: Launch Meeting – Zoom).  

Recap of Prior Meeting

A recap of our last meeting is included below. 

1. Report on Past Activities

Co-Chair Michael Guerrero started the meeting with an overview of committee restructuring and the role of our new Vice Chairs Bella Guerrero, Joy Tsai and Tricia Engelhardt. New format of meetings will focus on having a dialogue and discussing recent developments. The monthly meetings will focus on tracking recent federal and state developments.

2. Committee Business

a. Mark Moore announced that there will be a CLA annual meeting September 13 and suggested that CFSC be involved in programming. We have since asked to be included and are awaiting a response.

b. We encourage all to reach out to prospective new Committee members. We have 7 open seats. 

c. Recent Developments – Committee members then reported on the following legal developments and topics:

                                               i.     The Department of Financial Protection and Innovation (DFPI) “True Lender” Litigation. “True lender” issues continue to impact bank partnership programs. We discussed the current litigation on the issue involving the California DFPI. We will continue to monitor the issue, but additional summaries about the litigation are available at the Ballard Spahr website (thanks Michael!) here.

                                             ii.     DFPI Issues First Action Against Rent-to-Own (RTO) Company under CCFPL. Under newly expanded authority provided by the California Consumer Financial Protection Law (CCFPL), the DFPI took action against an RTO company for violations of the Karnette Rental-Purchase Act (RTO Law). Specifically, the DFPI asserted that the company’s failure to comply with the RTO law was a violation of the CCFPL. Before the CCFPL was passed in 2020, the DFPI did not have direct oversight of RTO companies. Additional information is available at the DFPI website here.

                                           iii.     Consumer Financial Protection Bureau (CFPB) Revises Examination Manual for Evaluation Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) to Include Discriminatory Practices. CFPB examiners are instructed to consider discriminatory conduct that could constitute an “unfair” act or practice. Although the CFPB already has authority to enforce Equal Credit Opportunity Act (“ECOA”) violations, ECOA only prohibits discrimination in the credit context and on the basis of a protected class. Additional information on the topic available at the Mayer Brown website (thanks Joy!) here.

                                            iv.     CFPB Policy on Contractual “Gag” Clauses and Fake Reviews. The CFPB issued a policy indicating that contractual “gag” clauses that attempt to prevent consumers from posting an online review, as well as fake online reviews, are considered unlawful practices under the Consumer Financial Protection Act. The CFPB noted that such practices can undermine fair competition—an issue that the Federal Trade Commission has historically addressed. 

                                             v.     CFPB Outlines Options to Prevent Algorithmic Bias in Home Valuations. The CFPB appears to be in a fact-gathering stage as it seeks feedback from stakeholders on algorithmic models used in estimating home values. Other regulators have expressed concerns about appraisal disparities, and the CFPB is concerned that artificially low valuations driven by algorithms without proper safeguards could exacerbate existing inequalities in the housing market. Over the next few months, the CFPB may issue a notice of rulemaking on the topic, and we will continue to monitor. Additional information on the topic available at the Mayer Brown website here.

CFSC Upcoming Meeting Agenda

We plan to discuss some of the recent developments listed below during this month’s meeting. We hope you can join us for a timely and engaging discussion! If there are any topics you would like to see added to the agenda, please email Michael Guerrero or John Kimble.

1. CFPB Administrative/Structural Issues

          a. CFPB exercise dormant authority to examine nonbank companies posing risks to consumers

          b. Chopra rethinking approach to regulations

2. CFPB ANPR on Credit Card Late Fees

3. State “work from home” developments 

4. FTC Proposed Rule on Auto-Dealers Disclosures and Practices

5. CFPB Interpretative Rule regarding the FCRA’s “Limited Preemption of State laws” 

6. CFPB Advisory Opinion on “Pay-to-Pay” Fees (released June 29)

7. Bank Partnerships 

          a. CA lawmakers send letter to FDIC regarding partnership programs

Also, shortly we’ll circulate a calendar invite to a special meeting on September 13th where we will have Kevin Gould from the California Bankers Association discuss this year’s legislative developments.  To learn more about Kevin, please visit Kevin Gould – California Bankers Association ( 

Get Involved!

Joining CFSC is simple – you can do it online. We are actively looking for new members, so consider applying on the CLA BLS Standing Committees website. Our members include consumer advocates, law firms and in-house counsel. If you are interested, feel free to contact one of us.

John Kimble, Esq. (Co-Chair)
Paul Hastings, LLP1999 Avenue of the Stars
Twenty-Eight Floor
Century City, CA 90067O: (310) 620-5741

Michael Guerrero (Co-Chair)
Partner (he/him/his)
Ballard Spahr LLP2029 Century Park East
Suite 1400
Los Angeles, CA 90067
O: (424) 204-4388  

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