Fitch Ratings recently said that the Consumer Financial Protection Bureau is being more proactive in fulfilling its regulatory duties, and financial firms will likely be subject to higher costs resulting from the agency’s enforcement actions.
Earlier this month, the CFPB took its first public enforcement action against Capital One for its deceptive marketing practices. Authorities allege that Capital One’s affiliates pressured and deceived consumers into purchasing “add-on” products like payment protection, often by telling consumers that there were no up-front costs associated with the services.
As part of the settlement, the bank agreed to refund consumers between $140 million and $150 million. Capital One was also sanctioned by the CFPB and Office of the Comptroller of the Currency and is required to pay $60 million in penalties.
Fitch Ratings said that the enforcement of the 2009 Credit Card Accountability, Responsibility and Disclosure Act, commonly referred to as the CARD Act, is an opportunity for the federal consumer watchdog agency to expand its regulatory reach.
Additionally, Fitch Ratings said that the CFPB now seems to be able to charge penalties to those firms that the agency finds to be noncompliant with the law, which may increase compliance and marketing costs to businesses subject to supervision by the CFPB.