The CFPA is not limited to, or even focused on, consumer financial products.

Despite claims that the CFPA is intended to protect consumers from predatory practices associated with financial products like mortgages or credit cards, its authority in fact extends to a far broader segment of the economy.  Businesses that have little to do with consumer finance – and had nothing to do with the financial crisis – would find themselves under this new, and most likely duplicative, regulatory agency’s control.  Overreaching new government bureaucracy that will impose new and draconian costs on businesses of diverse sectors and sizes is the last thing we need to get the economy and job growth back on track.  

What would CFPA regulation mean for businesses?

Businesses may be required to pay fees to support the new Agency (which would have the power to set its own budget and fees).

Businesses would be required to provide reports to the new Agency and would be subject to inspection by the new Agency.

Businesses would be subject to enforcement actions by the new Agency.

These new burdens would be duplicative, because most of these businesses would remain subject to all existing regulation by the Federal Trade Commission.

Who would be regulated by the CFPA, and what would make them a “covered person”?

DOCTORS AND DENTISTS

If you allow patients to pay for expensive procedures or treatments in four or more installments, you’re covered by the CFPA.  (Dodd Bill §§ 1002(13)(B) & 1024)

 

RETAIL STORES

If you sell phone cards or any other type of gift card (even if the cards are issued by others), you’re covered by the CFPA. (Dodd Bill §1002(13)(L) & (26))

If you regularly extend credit to customers and impose a finance charge or flat fee for late payment, you’re covered by the CFPA.   Or if you sell customer debt to other company, you’re covered by the CFPA.  (Dodd Bill §§ 1002(13)(B) & 1024)

Even if all you do is accept credit cards issued by others, you still may be covered by the CFPA for “indirectly” providing credit. (Dodd Bill §1002(6) & (13)(B))

 

COLLEGES, UNIVERSITIES AND OTHER SCHOOLS

If you issue any type of stored value card (for example, cards used by students from which the value of food or school supplies are deducted), you’re covered by the CFPA. (Dodd Bill §1002(13)(L) & (26))

If you offer financial literacy courses or provide students with financial literacy materials, you’re covered by the CFPA. (Dodd Bill §1002(13(I)))

 

LARGE RETAILERS

If you issue or sell any type of gift card, you’re covered by the CFPA. (Dodd Bill §1002(13)(L) &(26))

If you regularly extend credit to customers and impose a finance charge or flat fee for late payment, you’re covered by the CFPA.  Or if you sell customer debt to other company, you’re covered by the CFPA. (Dodd Bill §§ 1002(13)(B) & 1024)

Even if all you do is accept credit cards issued by others, you still may be covered by the CFPA for “indirectly” providing credit. (Dodd Bill §1002(6) & (13)(B))

 

TELEPHONE, POWER, GAS, WATER, OIL COMPANIES

If you regularly extend credit to customers and impose a finance charge or flat fee for late payment, you’re covered by the CFPA.  Or if you sell customer debt to other company, you’re covered by the CFPA. (Dodd Bill §§ 1002(13)(B) & 1024)

 

TECHNOLOGY COMPANIES

If you provide advice to financial services companies regarding processing and storage of data relating to consumer products or services, you’re covered by the CFPA. (Dodd Bill §1002(13)(J))

If you provide processing or storage services for financial, banking or economic data, and any of that data relates to consumer transactions, you’re covered by the CFPA. (Dodd Bill §1002(13)(J))

If you serve ads relating to consumer financial products or services, then you’re covered by the CFPA. (Dodd Bill §1002(23))

 

TRADE ASSOCIATIONS AND NONPROFIT ORGANIZATIONS

If you offer financial literacy information or provide consumers with financial literacy materials, you’re covered by the CFPA. (Dodd Bill §1002(13)(I))

 

SOFTWARE COMPANIES

If you create or sell software for consumers to use in managing financial matters, you’re covered by the CFPA. (Dodd Bill §1002(13)(I))

 

AUTO DEALERS   

If you play any part in helping customers obtain financing, you’re covered by the CFPA. (Dodd Bill §1002(6) & (13)(B))

 

REAL ESTATE BROKERS

If you assist buyers or sellers in obtaining financing or settlement services or advise them regarding the financial aspects of a purchase, you’re covered by the CFPA. (Dodd Bill §§ 1002(13)(B) & 1024(a)(3))

 

LAWYERS

If you provide debt collection services or assist consumers with debt-related issues or credit-related issues, you’re covered by the CFPA. (Dodd Bill §1002(13)(E), (F) & (I))

If you provide tax planning advice to individuals, you’re covered by the CFPA. (Dodd Bill §1002(13)(I))

 

ADVERTISING AND MARKETING AGENCIES

If you assist clients in advertising and marketing consumer financial products or services, you’re covered by the CFPA. (Dodd Bill §1002(23))

 

PRINT OR ELECTRONIC MEDIA

If you provide information that educates consumers about financial matters (for example, advice columns), you’re covered by the CFPA. (Dodd Bill §1002(13)(I) & (J))

If you provide economic, banking for financial information or databases to consumers, you’re covered by the CFPA. (Dodd Bill §1002(13)(I) & (J))

If your website displays click-through ads for consumer financial products or services, you’re covered by the CFPA. (Dodd Bill §1002(23))

 

ANY OTHER TYPE OF BUSINESS

If you “advertise, market, sell, enforce, or attempt to enforce” any agreement or any term in any agreement or any fee or charge that “is not in conformity with” the new law or rules or orders issued by the new Agency; or if you “engage in any unfair, deceptive, or abusive act or practice”; or if you “recklessly” provide someone else with “substantial assistance” of the statutory authority against unfair, deceptive or abusive practices or of the Agency’s rules, then you’ve violated the CFPA. (Dodd Bill §1038 )

The new Agency has extremely broad power to extend its authority to other categories of businesses simply by issuing a regulation.  Once it issues such a rule, you’re covered by the CFPA.  (Dodd Bill §1002(13)(O))