February 3, 2026
Consumer Financial Services Bites of the Month - January 21, 2026 - "It's Not a Hot Day in January."
Justin B. Hosie, Eric L. Johnson and Kristen Yarows
In this month's article, we share some of our top "bites" covered during the January 2026 webinar.
Bite 17: FTC Publishes Biennial Report to Congress on Do Not Call Registry
On January 6, 2026, the FTC issued its biennial report to Congress on the National Do Not Call Registry ( "Registry") summarizing the Registry's current operations, the Registry's impact on new telecommunication technologies, and how the "established business relationship" exception impacts the FTC's enforcement efforts. According to the report, consumers placed more than 258 million telephone numbers on the Registry as of the end of fiscal year 2025, which is an increase of more than 4.8 million from the prior year. The FTC received more than 2.6 million Do Not Call consumer complaints in 2025 (an increase from the prior year) mostly concerning robocalls. While the number of complaints increased in 2025, the number is substantially lower than the peak year, 2017, which the FTC attributes to their enforcement strategies including the pursuit of Voice Over Internet Protocol providers, dialing platforms, and soundboard technology providers. The report also discusses the FTC's support of new technologies, particularly call-blocking and call-filtering products.
Bite 16: CFPB Publishes Consumer Credit Card Report to Congress
On December 30, 2025, the CFPB published its biennial report to Congress on the consumer credit card market, as required by the Credit Card Accountability Responsibility and Disclosure ("CARD Act") Act of 2009. Some Key findings included increases in purchase volume, credit card balances, cardholders making only minimum payments, use of cash back credit cards, delinquencies and charge-offs, and interest charges. Specifically, the report's data shows: purchase volume on consumer credit cards increased to $3.6 trillion in 2024, up from $3.2 trillion in 2022; credit card balances exceeded $1.2 trillion in 2024 as the average balance per cardholder surpassed pre-pandemic levels in 2023 and 2024; the share of cardholders making only the minimum payment in 2024 was at its highest since at least 2015, with about 15% of general purpose cardholders making only the minimum payment; cash back credit cards now make up the leading share of all general purpose accounts; credit card delinquencies and charge-offs reached historically high levels in early 2024 but have since fallen to pre-pandemic levels; and in 2024, consumers were assessed $160 billion in interest charges, up from $105 billion in 2022.
Bite 15: CFPB Announces Thresholds for Reg. Z and Reg. M
On December 15, 2025, the CFPB announced its threshold changes for Regulation Z and Regulation M, which are adjusted annually. The agencies are required to adjust the thresholds annually based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers ("CPI-W"). Based on the 2.1% annual percentage increase of the CPI-W as of June 1, 2025, Reg. Z and Reg. M generally will apply to consumer credit transactions and consumer leases of $73,400 or less in 2026. Private education loans and loans secured by real property, such as mortgages, are subject to Regulation Z regardless of the amount of the loan.
Bite 14: FTC Sends Letters to Companies Over Consumer Review Rule
On December 22, 2025, the FTC sent warning letters to ten companies concerning potential violations of the FTC's Trade Regulation Rule on the Use of Consumer Reviews and Testimonials ("Consumer Review Rule"). The Consumer Review Rule went into effect in October 2024 and prohibits certain unfair and deceptive practices involving consumer reviews and testimonials. The Consumer Review Rule prohibits selling or purchasing fake or false consumer reviews or testimonials and celebrity testimonials, among other things. The letters notified the companies of their specific non-compliant conduct, and instructed the companies to stop the conduct and take remedial action. The letters do not reflect a formal determination that the companies have violated the Consumer Review Rule, but did inform the companies that if the "FTC receive additional reports of non-compliance" it "could result in further legal action" including civil penalties of up to $53,088 per violation.
Bite 13: CFPB Issues Advisory Opinion on Earned Wage Access
On December 23, 2025, the CFPB published a new advisory opinion in the Federal Register, intended "to resolve regulatory uncertainty" concerning earned wage access. According to the advisory, "covered earned wage access" does not meet Regulation Z's definition of "credit" and expedited delivery fees and tips (in the normal course) are not "finance charges." The CFPB also withdrew a proposed interpretative rule from June 2024 that if finalized, would have identified EWA as "credit" under Regulation Z, and counted expedited delivery fees in certain circumstances, and tips, as finance charges under Reg Z. The advisory opinion provides that "Covered EWA" (1) limits the amount access to accrued cash value of wages earned based on payroll data; (2) uses a payroll process deduction;(3) includes clear and conspicuous disclosures that the provider (a) has no claim or remedy if the payroll deduction is insufficient and (b) will not engage in debt collection activities, place any outstanding balance as a debt with or sell it to a third party, or report to a consumer reporting agency concerning the transaction; and (3) the provider does not directly or indirectly assess the credit risk of individual workers (including using credit reports or credit scores). According to the advisory opinion, an expedited delivery fee or tip associated with the EWA product, in the normal course, is generally not a finance charge, because they are optional and not imposed by the EWA provider.
Bite 12: CFPB and DOJ Withdraw Fair Lending Statement Regarding Noncitizens
On January 12, 2026, the CFPB and Department of Justice announced that they have withdrawn a Joint Statement regarding the implications of a creditor's consideration of an individual's immigration status under the Equal Credit Opportunity Act ("ECOA"). On October 12, 2023, the agencies had published a joint statement cautioning that creditor policies related to an applicant's immigration or citizenship status could, in certain circumstances, run afoul of the ECOA's and Regulation B's prohibition of discrimination on the basis of protected classes, including race and national origin. The agencies indicated that they "are now withdrawing this statement to avoid any conflict with the express language of the ECOA and ... Regulation B." Finally, the agencies indicated that withdrawal is appropriate to avoid any unnecessary burdens from new or increased compliance efforts. Acting Director of the CFPB Russell Vought said, that for "decades, ECOA regulations have permitted lenders to consider a borrower's lawful residence status and other information necessary to protect their rights and remedies with respect to repayment," and that it is correcting the prior administration's attempt to ignore these "well-accepted" and "common-sense principles of our nation's fair lending laws."
Bite 11: DOJ Wants Fed. Chair to Weigh in on CFPB Funding
On December 17, 2025, media outlets reported that the Department of Justice sent a letter to Federal Reserve Chairman Jerome Powell asking for his opinion on the CFPB's funding issues. The letter asked Powell's opinion on: whether the Federal Reserve System expects to return to profitability in the coming weeks; and whether the Fed currently has combined earnings as defined by the DOJ's Office of Legal Counsel. The letter cited published reports that claim the Federal Reserve System is returning to profitability after recording significant paper losses since 2022. The letter is in response to an amicus brief from five former Fed officials, as well as a separate lawsuit against the CFPB by Rise Economy, the National Reinvestment Coalition, and the Woodstock Institute, challenging Vought's attempts to cut funding for the agency. On December 17, 2025, U.S. District Court Judge Amy Berman Jackson, of the U.S. District Court for the District of Columbia issued an order requiring Acting Director Vought to attach copies of any responses to his letter to Powell with the court.
Bite 10: Appellate Court Agrees to Rehear CFPB Union Lawsuit
On December 17, 2025, the U.S. Court of Appeals for the D.C. Circuit granted the National Treasury Employee Union's petition to rehear its case against the CFPB and Acting CFPB Director Russell Vought. Back in August 2025, a three-judge panel ruled 2-1 in favor of Acting Director Vought, holding that he had broad authority to fire up to 90% of the CFPB's staff. This order vacated the panel's August 15, 2025 judgment, and a partial stay remained in effect. The Appeals court agreed to a rehearing after dozens of lawmakers and nonprofit organizations submitted legal briefs and letters in support of the union. In fact, the Appellate court cited the Constitutional Accountability Center, 41 nonprofit organizations, and 36 members of Congress who signed amicus briefs claiming that Acting Director Vought cannot legally shut down an agency created by Congress. The court set a briefing schedule and set oral arguments for 2 p.m. on February 24, 2026.
Bite 9: Court Orders to Keep CFPB Funded Until Appellate Hearing
On December 30, 2025, media outlets reported that the U.S. District Court for the District of Columbia issued an order clarifying the existing injunction and stating that the CFPB must continue to be funded until the appeals court hears the issue in February. In November 2025, the Department of Justice's Office of Legal Counsel asserted that the CFPB could not legally request funds from the Federal Reserve based on its interpretation of the term "combined earnings" used in the Dodd-Frank Act. According to the court, the "lapse" in funding was "manufactured by the defendants" and is "not a valid justification for the agency's unilateral decision to abandon its obligations." According to the decision, the Federal Reserve has provided funding seamlessly to the CFPB since 2011, even in the years that it did not turn a profit. The ruling called the Office of Legal Counsel's argument "flawed reasoning." According to the ruling, the "defendants are unabashedly trying to shut the agency down again, through different means," and that it "appears that defendants' new understanding of 'combined earnings' is an unsupported and transparent attempt to achieve the very end the court's injunction was put in place to prevent."
Bite 8: Senate Fails to Act on Levenbach's CFPB Director Nomination
On January 3, 2026, the nomination of Stuart Levenbach for the next CFPB Director was automatically returned back to the President, as the Senate did not act upon the nomination. As a result, Acting Director Vought will remain the CFPB's Acting Director through August 2026. Under the Vacancies Act, once a second person is nominated to fill the position, the Acting Director may serve while the nomination is pending in the Senate. Should that nomination be rejected, returned, or withdrawn, the Acting Director may continue to serve for an additional 210 days from the date of the rejection, return, or withdrawal. Acting Director Vought could only serve as Acting Director for 210 days from May 12, 2025, the date that prior nominee, Jonathan McKernan's nomination was officially withdrawn, absent a second nomination. Once President Trump nominated Stuart Levenbach, Acting Director Vought could continue his role. Vought may serve as Acting Director through August 1 and under the federal Vacancies Reform Act ("VRA"), Vought cannot be extended beyond that date because the VRA only permits the extension for two nominations. As of August 2, the Deputy Director (now Geoff Gradler) will automatically become the new Acting Director.
Bite 7: CFPB Requests Funding from the Fed
On January 9, 2026, media outlets reported that the CFPB notified the U.S. District court for the District of Columbia that Acting Director Vought has prepared and submitted the required funding request for $145 million to the Federal Reserve. The judge's order would have held Acting Director Vought in contempt if he failed to fund the agency. The Department of Justice filed the notice, informing the court that Vought had prepared the funding request "in accordance with this Court's order dated Dec. 30, 2025." In November 2025, the Department of Justice's Office of Legal Counsel took the position that Acting Director Vought could not lawfully make a funding request since the Fed. had no earnings - which the U.S. District court for the District of Columbia rejected on December 30, 2025.
Bite 6: FTC Takes Action Against Online Q and A Service
On January 13, 2026, the FTC sued an online question-and-answer service and its founder, alleging that the company enrolled consumers into a subscription program without obtaining consumers' affirmative consent. The FTC alleged that the company falsely claimed consumers could "join" the platform and get access to expert advice for as little as $1 or $5, but when consumers signed up for the service, they were enrolled in a monthly subscription that charged between $28 and $125. The FTC alleges that consumers were required to provide their credit card information to the company without affirmatively consenting to enroll in its ongoing subscription. According to the FTC, the subscription terms were not disclosed clearly and conspicuously. The complaint alleges violations of the FTC Act and the Restore Online Shoppers' Confidence Act ("ROSCA"). The complaint seeks a court order prohibiting certain conduct, money back for consumers allegedly harmed by the billing practices, and civil penalties against the company and its owner.
Bite 5: FTC and States File Amended Complaint Against Rideshare Company
On December 15, 2025, the FTC, 21 states, and the District of Columbia filed an amended complaint against a major rideshare and food delivery company over its subscription and cancellation program. The FTC filed the initial complaint against the company in April of 2025. This amended complaint adds the 22 attorneys general and corresponding state law claims. The amended complaint alleges that the company marketed its subscription program with claims promising specific monthly savings and ease of cancellation, but claims that consumers did not receive the promised monthly savings or had to pay fees on deliveries despite the $0 delivery fee promise. According to the FTC, some consumers encountered substantial barriers when attempting to cancel. The amended complaint further alleges that some consumers were enrolled in the subscription without their knowledge or consent and then were charged recurring fees for the subscription. The amended complaint asserts claims under the FTC Act, ROSCA, and multiple state laws prohibiting unfairness and deception. The FTC and states seek injunctive relief, restitution, damages, and civil penalties, including penalties for each alleged ROSCA violation.
Bite 4: FTC Asks Court to Hold Payment Processors in Contempt
On January 13, 2026, the FTC issued a press release, reporting that it filed a motion in federal court requesting the court to hold the operators of a payment processing operation in contempt for "systematically" violating a 2015 order alleging the processing operation illegally processed credit card payments. The FTC requested that the court impose at least $52.9 million in compensatory relief for consumers, modify the 2015 order to permanently ban the owners from the payment processing industry, and appoint a receiver to ensure the company and its owners comply with the 2015 order. The FTC alleged that the company violated numerous provisions of the 2015 order while processing payments expressly prohibited by the order, including a group of merchants that were separately indicted for crimes related to this processing. The FTC alleged that the company processed hundreds of millions of dollars in payments for at least three clients on Mastercard's Member Alert To Control High ("MATCH") list; assisted and facilitated clients' tactics to avoid bank and credit card network fraud and risk monitoring programs; processed transactions for high-risk clients without engaging in reasonable efforts to screen them; and failed to monitor high-risk clients' sales and transactional activity.
Bite 3: FTC Finalizes Order Over Connected Car Technology
On January 14, 2026, the FTC finalized its consent order with a car manufacturer and connected vehicle company over allegations that they collected, used, and sold consumers' precise geolocation data and driving behaviors from millions of vehicles without notifying consumers and obtaining their affirmative consent. The FTC first announced this complaint in January 2025. The final order imposes a 5-year ban on the companies disclosing consumers' geolocation and driver behavior data to consumer reporting agencies. Other provisions of the order last for 20 years and require the companies to: obtain affirmative express consent from consumers prior to collecting, using, or sharing connected vehicle data (including sharing data with consumer reporting agencies), with some limited exceptions, like providing location data to emergency first responders; create a way for all U.S. consumers to request a copy of their data and seek its deletion; give consumers the ability to disable the collection of precise geolocation and driver behavior data from their vehicles; and provide consumers with a way to opt out of the collection of geolocation and driver behavior data, with some limited exceptions.
Bite 2: FTC Takes Action Against Blockchain Company
On December 16, 2025, the FTC resolved a case against a blockchain company involving allegations that the company failed to implement adequate data security measures. The FTC alleges that these failures contributed to a 2022 hack draining about $186 million, with consumers losing over $100 million. The complaint alleges that in June 2022 the company introduced inadequately tested code that included a significant vulnerability. The complaint alleges that the company lied about its data security and lacked basic software and security controls. The FTC also alleges that the company failed to implement common safeguards like secure coding, incident response, transaction monitoring, and suspicious activity measures, and lacked staff and processes to detect risks promptly. Chris Mufarriage, the Director of the FTC's Bureau of Consumer Protection said that it is "important that companies live up to their security promises to consumers." The order requires the company to stop misrepresenting its security practices and enforce a comprehensive security program, evaluated every two years for ten years. It also mandates returning about $37.5 million of recovered assets to affected consumers, if not already distributed. The FTC voted 2-0 to accept the complaint and consent order for public comment.
Bite 1: FTC Takes Action Against Grocery Delivery Provider
On December 18, 2025, the FTC settled a lawsuit against a grocery delivery provider over allegations that the company enrolled consumers into its paid subscription service without their express informed consent. The FTC alleged that the company falsely advertised "free delivery" to consumers on their first order, falsely advertised a "100% satisfaction guarantee," and failed to clearly disclose the terms of its paid subscription service. Director of the FTC's Bureau of Consumer Protection said that the "FTC is focused on monitoring online delivery services to ensure that competitors are transparently competing on price and delivery terms." The FTC alleged violations of ROSCA and the FTC Act. The settlement includes the following terms: (1) payment of $60 million in consumer redress; (2) a prohibition on misrepresenting the costs of delivery services and satisfaction guarantees; and (3) requires the company to clearly and conspicuously disclose the terms and obtain express informed consent for transactions involving subscriptions.
Still hungry? Please join us for our next Consumer Financial Services Bites of the Month. If you missed any of our prior Bites, request a replay on our website.
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