Aaron Jacoby Authors Daily Journal Article on CFPB Credit Card Discrimination Settlement

The article addresses the recent credit card discrimination settlement ordered by the Consumer Financial Protection Bureau (CFPB). GE Capital Bank – currently known as Synchrony Bank – was ordered to provide an estimated $225 million in relief to consumers harmed by illegal and discriminatory credit card practices, making it the federal government’s largest credit card discrimination settlement in history.

GE must also end deceptive marketing practices, end illegal discrimination, notify credit reporting agencies to remove negative information related to GE Capital accounts for those who did not receive the debt relief offers, forgive debts belonging to those who did not receive the debt relief offers, and pay a $3.5 million penalty.

“Such investigations and enforcement actions suggest the next stop for the CFPB’s narrowing focus may be the auto lending industry, particularly given the industry parallels in the marketing and sales of add-on products and allegations of discriminatory lending. While these steps to curtail the CFPB are unlikely to become law or result in a more formal rulemaking process any time soon, the automotive industry has once again proven its powerful ability to gain lawmakers’ attention. From a compliance standpoint, now is the best time to identify industry-wide preemptive changes, particularly because the industry has the benefit of knowing what the CFPB has required in the credit card arena. With these issues in mind, industry efforts should be primed to finding the best ground to leverage the next wave of CFPB enforcement activity.”