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THE CARLAWYER

The CARLAWYER ©

By Thomas B. Hudson and Nicole F. Munro
Advertising and selling cars online has of the Office of Management and Budget, noted that the CFPB will no longer "push
become commonplace. It is also common as the CFPB's acting director until a the envelope" of the law in order to "send
that sometimes the buyers and dealers in permanent director is confirmed by the a message" to regulated entities. Mulvaney
these online transactions are located in Senate, setting up a conflict with Cordray's rejected his predecessor's "good guy"
different states. What is less common is appointee. versus "bad guy" language and promised to
that a dealer, before undertaking these execute the CFPB's mandate "with humility
sales, has had the advertising and sales English sued Mulvaney and the president, and prudence."
process reviewed by counsel. The “Case asking the court to restrain Mulvaney
of the Month,” below, involves a Tennessee from heading the CFPB until a permanent Mulvaney indicated that the CFPB will be
dealer who was sued in Alabama, after director can be nominated and confirmed. conducting a review of all activities in which
an Alabama buyer bought a car from In late November, the judge denied it is engaged. More specifically, Mulvaney
the Tennessee seller. The dealer had the English's initial request for a temporary stated that the CFPB will be: (1) bringing
Alabama lawsuit dismissed, but gave the restraining order. enforcement actions where "quantifiable
buyers permission to transfer the case to and unavoidable harm to the consumer"
the appropriate jurisdiction. The case Kiss the Payday Rule Goodbye? On exists; (2) focusing on formal rulemaking
illustrates the perils of online transactions. January 16, 2018, the CFPB issued the instead of "regulation by enforcement;"
Have you had your online advertising and following statement on its Payday, Vehicle and (3) prioritizing areas of focus based on
sales processes reviewed by counsel? Title, and Certain High-Cost Installment consumer complaints (noting, specifically,
Loans final rule ("Payday Rule"): "January that nearly a third of CY 2016 complaints
Federal Developments 16, 2018, is the effective date of the [Payday related to debt collection, compared to
Rule]. The Bureau intends to engage in 0.9% for prepaid cards and 2% for payday
Struggle for Control of the CFPB. On a rulemaking process so that the Bureau lending).
January 10, 2018, the U.S. District Court may reconsider the Payday Rule. Although
for the District of Columbia denied CFPB most provisions of the Payday Rule do Finally, Mulvaney stated that the CFPB
Deputy Director Leandra English's request not require compliance until August 19, will engage in quantitative analysis to
for a preliminary injunction to block 2019, the effective date marks codification "consider the potential costs and benefits
President Trump's appointment of Mick of the Payday Rule in the Code of Federal to consumers and covered persons" when
Mulvaney as acting CFPB director. The Regulations. [The] effective date also determining whether to intervene in given
court ruled that English is not likely to establishes April 16, 2018, as the deadline situations.
succeed on the merits of her claim that, by to submit an application for preliminary
operation of the Dodd-Frank Act, she is approval to become a registered Information, Please. On January 24,
the rightful acting CFPB director. English information system ("RIS") under the 2018, the CFPB issued a “Request for
was also unable to show that a denial of the Payday Rule. However, the Bureau may Information,” seeking feedback on all
injunction would cause her or the agency to waive this deadline pursuant to 12 C.F.R. aspects of the CFPB's civil investigative
suffer irreparable harm. 1041.11(c)(3)(iii). Recognizing that this demand process to determine if any changes
preliminary application deadline might are necessary. The CFPB issues CIDs to
As background: On November 24, 2017, cause some entities to engage in work in entities and persons whom the CFPB has
Richard Cordray appointed English, his preparing an application to become a RIS, reason to believe have information relevant
chief of staff, as deputy director and then the Bureau will entertain waiver requests to a violation of the laws the CFPB enforces.
resigned. Pursuant to a section of the from any potential applicant."
Dodd-Frank Act that says the deputy Recipients of a CID are required to produce
director serves as the acting director when A New Boss, With New Marching Orders. the requested information to the Bureau,
the director is unavailable, English claimed On January 23, 2018, the CFPB's Acting which uses that information to further its
the title of acting director upon Cordray's Director Mulvaney wrote a memo to staff investigations of potential violations of
resignation. A few hours later, President discussing how, under new leadership, the federal consumer financial laws. Through
Trump - using his authority under the CFPB is shifting its governing philosophy the RFI, the CFPB is seeking information
Federal Vacancies Act to fill vacant in regard to carrying out its mandate under on how processes related to CIDs may be
positions that require Senate confirmation the Dodd-Frank Act. While Mulvaney updated, streamlined, or revised to better
with another appointee who has already affirmed the need to protect consumers and achieve the CFPB's statutory and regulatory
been confirmed by the Senate for another stated that the CFPB will enforce consumer objectives, while minimizing burdens on
position - appointed Mulvaney, the director financial protection laws vigorously, he Continued on page 40

38 | GIADA Independent Auto Dealer FEBRUARY 2018