CFPB Backs Off From Investigating J. G. Wentworth

The Consumer Financial Protection Bureau this week retreated from an investigation into J.G. Wentworth, a year after suing the financial services firm in Philadelphia federal district court to force the company to disclose thousands of pages of documents.

The CFPB had issued the CID to J.G. Wentworth in September 2015 to investigate alleged violations of consumer protection laws.  J.G. Wentworth filed an administrative petition to set aside the CID as beyond the CFPB’s statutory authority, arguing that its purchase of settlements and annuities was not a consumer financial product or extension of credit subject to the CFPB’s UDAAP authority or TILA.  The CFPB denied the petition to set aside, asserting that J.G. Wentworth might be providing financial advisory services to consumers in connection with offers to purchase structured settlements or annuities, which would constitute a “consumer financial product or service” subject to Dodd Frank’s UDAAP prohibition.  Alternatively, the CFPB asserted that the purchases could be extensions of credit subject to TILA.  After its petition was denied, J.G. Wentworth produced some initial information to the CFPB, but ultimately refused to comply with the CID on the grounds the CFPB lacked jurisdiction over its activities.  In response, the CFPB filed the petition to enforce the CID.

The CFPB has consistently pushed the jurisdictional envelope by adopting broad interpretations of its statutory authority with the most aggressive and public example of the CFPB’s “jurisdictional creep” being its efforts to indirectly regulate the conduct of car dealerships (which is expressly carved out from the CFPB’s jurisdiction by Dodd-Frank) by applying a questionable interpretation of ECOA to impose disparate impact liability against auto finance companies.




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