What’s Inside the CFPB Enforcement Policies and Procedures Manual 2.0

CFPB Enforcement Policies and Procedures Manual 2.0Despite facing significant legal challenges and a shifting political landscape, the Consumer Financial Protection Bureau (CFPB) is virtually unrestrained in its ability to launch investigations and threaten enforcement actions. We’ve obtained through a Freedom of Information Act (FOIA) request the most recent official CFPB Enforcement Policies and Procedures Manual Version 2.0. The Enforcement Policies and Procedures Manual “is the source for policies governing the work of the Consumer Financial Protection Bureau Office of Enforcement.” As a result, it is the agency’s playbook for investigations and enforcement actions that continue to make headlines and reverberate through the consumer financial services legal and regulatory landscape.

The document, available for download here, represents the most concrete and definitive statement of the CFPB Office of Enforcement’s views on the agency’s jurisdiction, authority, and strategy and tactics for launching investigations and bringing enforcement actions. The manual is important reading for anyone responding to a CFPB Civil Investigative Demand (CID), preparing to respond to a Notice of Opportunity to Respond and Advise (NORA) letter, litigating with the CFPB, advocating for the close of an investigation, or even preparing for or responding to an examination or Potential Action and Request for Response (PARR) letter.

Click here to read a summary of the highlights.

The “More Muscular” Buy American Policy Involves a Waiting Period

Made in USAEarlier this month, Venable reported on the Trump administration’s intent to make the federal government’s procurement preference for domestic products (i.e., the body of “Buy American” laws that have been around in some form or another since 1933) even “more muscular” by moving forward with a “new policy” that is “based on the twin pillars of maximizing Made in America content and minimizing waivers and exceptions to Buy American laws.” To that end, on April 18, 2017, President Trump signed the “Buy American and Hire American” Executive Order. In his remarks on the executive order, President Trump said, “With this action, we are sending a powerful signal to the world: We’re going to defend our workers, protect our jobs, and finally put America first.” He further stated, “We’re using every tool at our disposal to restore the American Dream. In fact, when it comes to wasteful, destructive, job-killing regulations, we are going to use a tool you all know very well—it’s called the sledgehammer.” To learn more about the specifics, read more from our Government Contracts Group.

Of course the substantiation needed for “Made in USA” claims is different and heightened compared to the Buy America standard. In encouraging businesses to invest in American manufacturing, it is likely such businesses will want to advertise the investment to non-government purchasers. But given the FTC’s standard to support a “Made in USA” claim is that “all or virtually all” domestic sourcing be used, the bar is very high. Might a new FTC chair revisit this standard and provide some greater flexibility? This is something else that would be HUGE if it happened.

Regulatory Roll-Back: The President’s New “One In-Two Out” Regulatory Policy

The White HouseThe President’s recent Executive Order on reducing regulation and controlling regulatory costs represents the greatest potential change in federal regulatory policy since President Reagan’s 1981 Executive Order on federal regulation first provided for White House oversight of the regulatory process.

The Order requires three main things, with certain exceptions:

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Data Security Rules of the Road: A Guidebook to FTC Cases

Data Security Rules of the Road: A Guidebook to FTC CasesAs data security risks increase in their intensity, variety, and sophistication, Venable introduces Data Security Rules of the Road: A Guidebook to FTC Cases v1.0.  The book is a valuable resource for businesses seeking to protect the security of personal information in ways that are consistent with guidance offered by the FTC.

With over a decade of experience dating back to the FTC’s very first foray in this area, Venable’s award-winning Privacy and Data Security Practice Group attorneys, with help from our in-house cybersecurity specialists and technologists, have deconstructed every one of the FTC’s more than five dozen enforcement actions and derived the key features and lessons for your company to apply.  The result is a practical yet detailed overview that will help unite the legal and operational aspects of your cybersecurity program.

If you would like a copy of the book or would like to discuss its implications for your cybersecurity program, please contact Lucy Dempsey LGDempsey@Venable.com.

FTC Formally Announces Influencer Sweep on “Word to the Wise Wednesday”

hashtagWe previously blogged a few weeks ago about the FTC’s sweep of influencers and warning letters being sent regarding whether material connections are disclosed, and if so, if they are done clearly and conspicuously. The FTC has issued a press release with more detail. We now know there were over 9‎0 such letters sent. For those who received a letter, the tendency might be to file it and move on, as the letters do not request follow up or require any action. This would be a mistake. Proactively engaging with the FTC to assure them there is no issue or to assure them that you are fixing compliance gaps is critical. If history is a guide, we fully expect the FTC to follow up and open investigations, at least into conduct, by some of the letter recipients.

The FTC’s Business Blog contains a few nuggets that may be of interest to those of us seeking to get disclosures done the right way, but perhaps with something other then #advertising as the first word in a post. The business blog suggests that on sites such as Instagram that prompt you to click for “more,” any disclosure must occur before the prompt, as many consumers may never click to see the additional content. Second, the blog suggests that #partner may be an ambiguous term. As it was not a shorthand like “spon,” this word has been a fairly common choice that perhaps now should be reconsidered. #thanks{brand} also made the list of inadequate disclosures. Finally and most interesting, the blog suggests that a disclosure at the end of a post, even if the post is short, might not be clear and conspicuous if provided with other #information. #humpday #taxesdone #didyounoticethis #endofblog.

Copyright Considerations for using Emoji in Commercial Ads

Given the ubiquity of emoji, businesses have used them in commercial ad campaigns. Honda has used emoji in creative advertisements, releasing Aprils Fools’ ads in 2016 and again in 2017. Twentieth Century Fox created some buzz last year when it placed a billboard in Los Angeles advertising a movie release (guess which one) with the following message:

Deadpool Teaser Poster

Translation: “Deadpool.” Adweek wrote an article entitled: “Deadpool’s Emoji Billboard Is So Stupid, It’s Genius.”

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“It’s Over, Stop Texting Me”: Class Action Suit Against Kohl’s Alleges TCPA Violations

texting lawsBreaking up can be messy, whether you are the one doing the breaking up or the one being broken up with. And, we all know about the different ways to break up with someone. “It’s not you, it’s me . . .”, “I need space . . .”, “I’m washing my hair that year . . .” However, when it comes to the proper way of breaking up with a telemarketer over text message, a New Jersey federal court is primed to shed some light on the issue.

On January 12, 2017 plaintiff Amy Viggiano filed a class action lawsuit (Viggiano v. Kohl’s Dep’t Stores, Inc., No. 3:17-cv-00243 (D.N.J.), alleging that Kohl’s violated the Telephone Consumer Protection Act (TCPA) by sending unwanted text messages and requiring consumers to respond “STOP” to the texts to cancel them. Specifically, the complaint alleges that Kohl’s “sent millions of text messages to consumers after purporting to designate the exclusive means by which consumers may withdraw consent to receive such messages.” There generally can be no violation of the TCPA if the consumer has consented to receive marketing calls or text messages – at least absent a subsequent request to the sender to stop sending them. The Federal Communications Commission (FCC) has ruled that consumers have the right to revoke such consent by using any reasonable method, including orally or in writing. The issue in this case turns on whether, after the plaintiff unequivocally consented to receive marketing text messages from Kohl’s, she reasonably broke up with Kohl’s.

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Consumer Financial Services Update

financial lawBusiness lending, negative option programs, and enterprise risk management are at the forefront of the April 13 edition of Venable’s Consumer Financial Services Digest.

In this issue, we discuss CFPB Director Cordray’s recent appearance before Congress where he noted that the CFPB has started engaging in supervisory activity regarding small business lending.

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Springtime for Food Marketers? Two Big Wins in California in Recent Days

sunshineThe coming of spring has been accompanied by good news for two food marketers—ConAgra and Bumble Bee Foods—in their respective court fights in California.

In the Northern District of California, a federal judge dismissed a putative class action against ConAgra alleging that the marketer’s Crunch N’ Munch product violated California’s unfair competition law since it contains partially hydrogenated oil (PHO), a food additive high in trans-fat. The complaint, filed by Tony Walker, specifically stated, “although safe, low-cost, and commercially acceptable alternatives to PHO exist, including those used in competing brands and even in other ConAgra products, ConAgra unfairly elects not to use safe alternatives in Crunch ‘n Munch in order to increase its profits at the expense of the health of consumers.”

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