Federal Register / Vol. 90, No. 3 / Monday, January 6, 2025 / Notices 607 

1 12 U.S.C. 5531, 5536. 

2 15 U.S.C. 1681 et seq. 

3 12 CFR part 1022. 

Ledge, which is located 90 miles east of 

Portsmouth, New Hampshire in the Gulf 

of Maine. This area includes not just 

Cashes Ledge, but also Parker Ridge and 

Sigsbee Ridge, which collectively form 

a 32 mile long granite ridge that rises 

sharply from the sea floor and runs 

parallel to the coastline. CLF nominated 

the Cashes Ledge area for consideration 

as a national marine sanctuary to protect 

its nationally significant ecological 

resources. These include dense kelp 

forests, habitat for species such as cod, 

Atlantic wolffish, halibut, and flounder, 

and globally significant populations of 

marine mammals, such as North 

Atlantic right whales, and seabirds, 

such as Atlantic puffins. CLF also 

nominated the Cashes Ledge area for 

consideration in order to better protect 

the Gulf of Maine ecosystem, which 

New England’s coastal communities 

depend on economically for tourism, 

shipping, offshore energy, and 

recreational and commercial fishing. 

Based on information included in the 

nomination, including the comment 

letters submitted with the nomination, 

as well as NOAA’s internal analysis, 

NOAA has determined that the 

nomination is responsive to the 11 

national significance criteria and 

management considerations it uses to 

review nominations. Therefore, this 

notice serves to inform the public of the 

agency’s decision to add the Cashes 

Ledge area to the inventory of successful 

nominations. 

At this time, NOAA is not initiating 

a sanctuary designation process. In 

adding the Cashes Ledge area to the 

inventory, NOAA does not endorse or 

imply endorsement of any specific 

boundaries, regulations or management 

measures in the Cashes Ledge 

nomination. Should NOAA decide to 

initiate a sanctuary designation process 

for Cashes Ledge in the future, it would 

establish a highly public, multi-year 

process for exploring possibilities for 

sanctuary boundaries, regulations and 

programs in partnership with other 

Federal agencies, Tribal Nations, State 

governments, stakeholders and the 

public. 

III. Classification 

A. National Environmental Policy Act 

(NEPA) 

NOAA has concluded that the action 

of adding the Cashes Ledge area to the 

inventory of successful nominations 

will not have a significant effect, 

individually or cumulatively, on the 

human environment because this action 

is administrative in nature and does not 

designate or propose to designate any 

new national marine sanctuaries. NOAA 

has further determined that this action 

is not connected to a larger action, and 

does not involve extraordinary 

circumstances precluding the use of a 

categorical exclusion in accordance 

with NEPA (42 U.S.C. 4321 et seq.). 

Therefore, this action is categorically 

excluded from the requirement to 

prepare an environmental assessment or 

environmental impact statement, in 

accordance with NOAA Administrative 

Order 216–6A Environmental Review 

Procedures, and the NOAA NEPA 

Companion Manual. As defined in the 

NOAA NEPA Companion Manual, 

Appendix E, categorical exclusion 

category G7, the proposed action is a 

notice of administrative and procedural 

nature and for which any environmental 

effects are too broad and speculative to 

lend themselves to meaningful analysis 

at this time and will be subject later to 

the NEPA process, as applicable. Should 

NOAA decide to propose the 

designation of a national marine 

sanctuary, each individual national 

marine sanctuary designation process 

will be subject to case-by-case analysis, 

as required under NEPA and as outlined 

in section 304(a)(2)(A) of the NMSA. 

Authority: 16 U.S.C. 1431 et seq. 

John Armor, 

Director, Office of National Marine 

Sanctuaries, National Ocean Service, 

National Oceanic and Atmospheric 

Administration. 

[FR Doc. 2024–30702 Filed 1–3–25; 8:45 am] 

BILLING CODE 3510–NK–P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

Supervisory Highlights, Issue 37 

(Winter 2024) 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Supervisory Highlights. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is issuing its 

thirty seventh edition of Supervisory 

Highlights. 

DATES: This edition of Supervisory 

Highlights covers recent supervisory 

findings in the areas of deposits, 

furnishing, and short-term small dollar 

lending. The findings in this edition of 

Supervisory Highlights cover select 

examinations that were generally 

completed between January 1, 2024, to 

October 1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Jaclyn Sellers, Senior Counsel, at (202) 

435–7449. If you require this document 

in an alternative electronic format, 

please contact CFPB_Accessibility@

cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

1. Introduction 

The Consumer Financial Protection 

Bureau’s (CFPB) Supervision program 

assesses supervised institutions’ 

compliance with Federal consumer 

financial law including unfair, 

deceptive, or abusive acts or practices 

(UDAAPs) prohibited by the Consumer 

Financial Protection Act of 2010 (the 

CFPA).1

This edition of Supervisory Highlights 

covers recent supervisory findings in 

the areas of deposits, furnishing, and 

short-term small dollar lending. In 

connection with deposits, Supervision 

continues to find that supervised 

institutions are charging consumers 

unfair overdraft and non-sufficient 

funds fees, and this edition provides an 

update on Supervision’s work in this 

space. Aside from the refunds discussed 

in the context of deposits accounts 

below, mortgage originators and 

servicers have also recently reported 

issuing refunds related to unfair, 

deceptive, or otherwise unlawful fees 

and charges, which the CFPB 

anticipates reporting on in an upcoming 

edition of Supervisory Highlights. In 

short, mortgage servicers have reported 

issuing $4,251,815 in refunds for 91,931 

affected loans. Mortgage originators 

reported issuing $115,605,024 in 

refunds for 134,912 affected loans. In 

connection with furnishing, examiners 

continue to find violations of the Fair 

Credit Reporting Act (FCRA) 2 and its 

implementing regulation, Regulation V.3

These violations include failing to 

maintain policies and procedures 

regarding identify theft and the accuracy 

and integrity of information. 

Additionally, examiners continue to 

find that furnishers are not investigating 

indirect disputes. This edition of 

Supervisory Highlights also includes, for 

the first time, supervisory findings in 

connection with Buy Now, Pay Later 

and paycheck advance products. More 

specifically examiners identified 

multiple violations of law including 

UDAAPs in connection with both Buy 

Now Pay Later and paycheck advance 

products. This edition also highlights 

how weak technology controls can 

cause or contribute to violations of 

Federal consumer financial law. For 

example, Supervision found that the 

way that core processors configured 

their platforms caused violations of 

Federal consumer financial law. 


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4 If a supervisory matter is referred to the Office 

of Enforcement, Enforcement may cite additional 

violations based on these facts or uncover 

additional information that could impact the 

conclusion as to what violations may exist. 

5 12 U.S.C. 5531, 5536. 

6APSN overdraft fees are overdraft fees that 

financial institutions assess for debit card or ATM 

transactions for which the consumer had a 

sufficient available balance at the time the 

consumer authorized the transaction, but which, 

given the delay between authorization and 

settlement, the consumer’s account balance is 

insufficient to cover at the time of settlement. See 

Supervisory Highlights: Junk Fees Update Special 

Edition, Issue 31, 4–7 (March 2023) https://

www.consumerfinance.gov/data-research/researchreports/supervisory-highlights-junk-fees-updatespecial-edition-issue-31-fall-2023 ; Supervisory 

Highlights: Junk Fees Special Edition, Issue 29, 3– 

6 (March 2023), https://www.consumerfinance.gov/ 

data-research/research-reports/supervisoryhighlights-junk-fees-special-edition-issue-29-winter2023/; Consumer Financial Protection Circular 

2022–06, Unanticipated Overdraft Fee Assessment 

Practices, at 8–12 (Oct. 26, 2022), https://

www.consumerfinance.gov/compliance/circulars/ 

consumer-financial-protection-circular-2022-06- 

unanticipated-overdraft-fee-assessment-practices/. 

7These transactions, called re-presentments, 

occur when, after declining a transaction because of 

insufficient funds and assessing an NSF fee for the 

transaction, the consumer’s account-holding 

institution returns the transaction to the merchant’s 

depository institution, and the merchant presents 

the same transaction to the consumer’s accountholding institution for payment again. In some 

instances, when the consumer’s account remains 

insufficient to pay for the transaction upon representment, the consumer’s account-holding 

institution again returns the transaction to the 

merchant and assesses another NSF fee for the 

transaction, without providing consumers a 

reasonable opportunity to prevent another fee after 

the first failed presentment attempt. Absent 

restrictions on the assessment of NSF fees by the 

consumer’s account-holding institution, this cycle 

can occur multiple times, and consumers may be 

charged multiple fees for a single transaction. 8 12 U.S.C. 5531 and 5536. 

Additionally, an institution violated the 

law by rolling out a dysfunctional 

online banking platform that made it 

difficult for credit union members to 

perform basic banking functions for 

weeks, with some features unavailable 

for more than six months. One area of 

particular concern associated with 

technology that the CFPB expects to 

highlight in future publications is the 

risk associated with ‘‘Bring Your Own 

Device’’ (BYOD) policies, which refers 

to being able to conduct business on a 

personally owned device, rather than a 

company issued device. BYOD policies 

may increase security risks including, 

for example, data breaches, malware, 

and unauthorized access to sensitive 

data. Institutions that permit BYOD 

should ensure that they take steps to 

mitigate the risks associated with these 

policies. 

The findings in this edition of 

Supervisory Highlights cover select 

examinations that were generally 

completed between January 1, 2024, to 

October 1, 2024. To maintain the 

anonymity of the supervised institutions 

discussed in Supervisory Highlights, 

references to institutions generally are 

in the plural and the related findings 

may pertain to one or more 

institutions.4 We invite readers with 

questions or comments about 

Supervisory Highlights to contact us at 

CFPB_Supervision@cfpb.gov. 

2. Supervisory Observations 

2.1 Deposits 

Supervision examined the deposit 

operations of supervised institutions to 

assess whether they engaged in any 

UDAAPs prohibited by the CFPA.5 In 

these examinations, Supervision 

identified unfair overdraft and nonsufficient funds (NSF) fees as well as 

unfair acts or practices related to 

consumer requests to stop payment of 

preauthorized debit card transactions. 

2.1.1 Unanticipated Overdraft Fees 

and Re-Presentment NSF Fees 

In recent examinations of depository 

institutions and service providers, 

Supervision continued to cite unfair 

acts or practices at institutions that 

charged consumers for unfair 

unanticipated overdraft fees, such as 

Authorize-Positive Settle-Negative 

(APSN) overdraft fees, during this time 

period.6 Supervision also continued to 

cite institutions in connection with 

charging consumers NSF fees on the 

transaction that already incurred an 

NSF fee when it was previously 

declined.7

Since the CFPB heightened its 

supervisory attention on overdraft and 

NSF fees in 2022, financial institutions 

have agreed to refund nearly $250 

million to consumers—approximately 

$184 million in unfair unanticipated 

overdraft fees charged on transactions 

that were authorized when the 

consumer had sufficient funds, and 

approximately $66 million in unfair 

NSF fees charged on the same 

transaction that already incurred an 

NSF fee when it was previously 

declined. This $250 million reflects 

$240 million that the CFPB previously 

announced in October 2023 and April 

2024, and an additional $10 million that 

financial institutions have agreed to 

refund since the period covered by 

those announcements. 

2.1.2 Core Processor Practices 

Supervision continued to examine 

core processors in their capacity as 

service providers to large depository 

institutions. Core processors provide 

critical deposit, payment, and data 

processing services to many supervised 

institutions, and the system 

functionality that these entities develop 

drives many fee practices, including 

overdraft and NSF fee practices. 

In examinations of core processors, 

examiners found that core processors 

had enhanced their core platforms 

during the review periods to enable 

client institutions to avoid assessing representment NSF fees and APSN 

overdraft fees. However, examiners also 

found that the core processors 

configured their platforms so that the 

platforms would continue to assess the 

fees by default unless the client 

institutions took affirmative action to 

avoid assessing these fees. Examiners 

concluded that, in the offering and 

providing of core service platforms, core 

processors engaged in an unfair act or 

practice by assessing APSN overdraft 

fees and re-presentment NSF fees 

through their core platforms. An act or 

practice is unfair when: (1) it causes or 

is likely to cause substantial injury to 

consumers; (2) the injury is not 

reasonably avoidable by consumers; and 

(3) the injury is not outweighed by 

countervailing benefits to consumers or 

to competition.8

The assessment of re-presentment 

NSF fees and APSN fees results in 

substantial injury to consumers. These 

fees also increased the risk of consumers 

incurring additional fees on subsequent 

transactions caused by the fees, which 

lowered consumers’ account balances. 

The core processors caused these 

injuries because they were a predictable 

and foreseeable consequence of their 

core platforms’ limitations and 

configuration. Where the platforms were 

configured to assess the fees by default, 

it was foreseeable to the core processors 

that their clients would fail to take 

affirmative action to cease charging 

these fees and thus continue to assess 

these fees. As with the fees themselves, 

the relevant system limitations and 

configurations were not reasonably 

avoidable by consumers and not 

outweighed by any countervailing 

benefits to consumers or competition. 

In response to these findings, the core 

processors enhanced their core 

platforms to not only enable their client 

institutions to prevent the assessment of 

these fees but also to ensure that clients 

would not assess these fees by default 

if the clients did not take action to 

prevent their assessment. 

2.1.3 Improper Re-Presentment 

Processing Practices 

Supervision has reviewed depository 

institutions’ practices in processing 

automated clearinghouse (ACH) 

transactions to ensure that they are 

taking adequate steps to prevent the 


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9CFPB, Online Payday Loan Payments (2016), at 

14 (explaining that, according to CFPB analysis of 

online ACH payments, 50 percent of failed 

payments are re-presented after three failed 

payment attempts), https://www.consumer

finance.gov/data-research/research-reports/onlinepayday-loan-payments/. 

10 15 U.S.C. 1693e(a); 12 CFR 1005.10(c). 

11See comment 1005.10(c)–3. 

12See Id. 

origination of improper re-presentment 

transactions by their merchant and 

business clients. When a consumer pays 

for goods or services, the consumer may 

authorize the merchant to debit their 

bank account by submitting an ACH 

transaction to the consumer’s bank. The 

merchant will originate the ACH 

transaction by passing an ACH debit 

entry along to its bank, referred to as an 

‘‘originating depository financial 

institution’’ (ODFI), which will then 

send the entry to the consumer’s bank, 

referred to as a ‘‘receiving depository 

financial institution’’ (RDFI). The RDFI 

then may either post the transaction and 

debit the consumer’s bank account or 

return the transaction to the ODFI 

because of insufficient funds in the 

consumer’s account. The network rules 

governing ACH transactions impose 

certain formatting and processing 

requirements to identify re-presentment 

transactions. As explained above, in 

response to supervisory findings, core 

processors have enhanced their 

platforms to enable institutions to avoid 

charging NSF fees on readily 

identifiable re-presentment transactions. 

Accordingly, when an ODFI does not 

ensure that its clients comply with these 

formatting and processing requirements 

or otherwise do not originate improper 

re-presentment transactions, ACH 

transactions may not be readily 

identifiable as re-presentments by the 

RDFI and, by extension, the RDFI’s core 

platform may fail to prevent charging 

NSF fees on re-presentment 

transactions. 

The ACH network rules also generally 

limit the number of permissible representments for a single transaction by 

limiting an ODFI and its clients to a 

maximum of two re-presentment 

attempts after the initial presentment is 

returned for insufficient funds. 

However, as the CFPB has previously 

observed, an ODFI’s clients may, in an 

attempt to obtain payment from 

consumers, seek to improperly represent transactions to circumvent this 

limit on the number of permissible 

representments.9

Supervision found that depository 

institutions engaged in an unfair act or 

practice in their capacity as ODFIs by 

processing transactions for payment as 

initial presentments when the 

transactions were in fact representments without taking steps to 

address indicia of inaccuracy. 

Examiners found that these institutions, 

in their capacity as ODFIs, did not 

monitor their originator clients’ use of 

their ACH processing services to 

identify or prevent them from 

improperly re-presenting transactions. 

These depository institutions possessed 

information that strongly suggested that 

a percentage of ACH transactions that 

they processed as ODFIs were represented items that were improperly 

formatted and submitted by their 

originator clients as new transactions. 

These indicia included ACH entries 

reflecting transactions from the same 

payee, in the same amount, made close 

in time, which lacked indications that 

the transactions were recurring 

payments or otherwise reflected 

separate transactions. 

By failing to monitor originators to 

identify and prevent improper representment practices, these depository 

institutions caused or were likely to 

cause substantial injury to consumers in 

the form of NSF fees that could 

otherwise have been avoided. These fees 

would not have been assessed had the 

transaction been properly re-presented 

because the transaction would then 

either be identifiable as a representment and the NSF fee would 

have been waived by the bank’s core 

platform or would have not been 

submitted at all to the extent that the 

business client had already submitted 

the maximum number of re-presentment 

attempts. Although the supervised 

depository institutions, as ODFIs, did 

not actually assess these NSF fees, 

examiners found they caused the injury 

because the assessment of these fees was 

a probable and foreseeable consequence 

of their processing transactions for 

payment as initial presentments when 

the transactions were in fact representments. 

Even if a consumer’s bank did not 

assess NSF fees, consumers still suffered 

injury in the form of improper debiting 

of funds. When an originator obtains 

payment for a previously returned 

transaction by submitting the 

transaction as initial presentment, rather 

than a re-presentment, without the 

consumer’s authorization, the consumer 

suffers monetary harm by their account 

being debited without their 

authorization. These injuries were not 

reasonably avoidable and were also not 

outweighed by countervailing benefits 

to consumers or competition. In 

response to these findings, depository 

institutions implemented processes to 

prevent the origination of improper representment transactions by their 

clients, including regularly monitoring 

and auditing ACH transactions to 

identify any re-presented items that are 

miscoded as initial presentments and 

any other indicia of inaccuracy. 

2.1.4 Stop Payment Services of Debit 

Card Network Operators 

Consumers frequently complain that 

they face challenges in stopping 

payment of preauthorized debit card 

transactions, which they have a right to 

do under the Electronic Fund Transfer 

Act (EFTA) and its implementing 

Regulation E.10 Supervision has found 

in examinations that depository 

institutions likewise face difficulties in 

executing stop payment requests for 

recurring debit card transactions for 

various reasons. 

Unlike other types of recurring 

payment transactions, depository 

institutions’ core platforms generally do 

not offer the capability to stop payment 

of preauthorized debit card transactions. 

Regulation E recognizes that, in the case 

of a preauthorized debit made through 

a debit card network, a depository 

institution may not have the capability 

to block a preauthorized debit from 

being posted to the consumer’s account 

given the manner in which 

preauthorized debit card transactions 

are processed.11 Accordingly, it allows 

banks to comply with the stop-payment 

requirements by using a third party, 

such as a debit card network, to block 

the transfer, as long as the consumer’s 

account is not debited for the 

payment.12 To that end, some debit card 

networks offer stop payment capabilities 

that network members may use to stop 

payment of recurring debit card 

transactions routed through the 

network. Supervision recently 

conducted examinations of debit card 

network operators in their capacity as 

service providers to large depository 

institutions. Examiners found that, in 

some debit card networks, these 

network operators did not offer a 

network-based stop payment service 

that their members may use to stop 

payment of a recurring debit card 

transaction. Examiners also found that, 

in other debit card networks, the 

network operators did offer such a 

service but very few of its members 

elected to use the service. 

Examiners concluded that these 

network operators engaged in an unfair 

act or practice by processing 

preauthorized debit card payments 

subject to consumer’s valid stop 

payment requests due to the manner in 

which they operated their networks. By 

processing such transactions, the 

network operators caused substantial 


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13The term ‘‘consumer reporting company’’ 

means the same as ‘‘consumer reporting agency,’’ as 

defined in the Fair Credit Reporting Act, 15 U.S.C. 

1681a(f), including nationwide consumer reporting 

agencies as defined in 15 U.S.C. 1681a(p) and 

nationwide specialty consumer reporting agencies 

as defined in 15 U.S.C. 1681a(x). 

14 15 U.S.C. 1681 et seq. 

15 12 CFR part 1022. 

16 15 U.S.C. 1681s–2(a)(6)(A). 

17 15 U.S.C. 1681s–2(b)(1)(A). 

18 15 U.S.C. 1681s–2(b)(1)(B), (C). 

19See for example, Supervisory Highlights 

Consumer Reporting Special Edition, cfpb_

supervisory-highlights_issue-20_122019.pdf. 

monetary injury to consumers who were 

charged for preauthorized debit card 

transactions that they requested to be 

and were entitled to have stopped. Even 

though the consumer’s financial 

institution could likely recover the 

amount debited through standard 

dispute resolution and chargeback 

processes for debit card transactions, 

consumers would still be deprived of 

their funds while the dispute was 

processed. In any event, these processes 

are not an adequate substitute for a 

consumer’s right to stop payment of 

preauthorized debit card transactions. 

Operators of networks that did not 

offer a stop payment service caused this 

injury because it was foreseeable to 

them that not offering such a capability 

in the network would result in network 

members lacking the capability to stop 

payment of the transactions and, by 

extension, consumers being charged for 

such transactions after they submit a 

valid stop payment order. Even where 

network operators offered a networkbased stop payment capability, these 

operators still caused this injury to 

consumers, because, given that very few 

network members elected to use the 

capability, it was foreseeable to them 

that consumers would be charged for 

preauthorized debits that they are 

entitled to have stopped. 

The substantial injury identified in 

these exams was not reasonably 

avoidable by consumers. When entering 

a recurring transaction, consumers have 

little reason to anticipate potential 

injury, and if they did, few means to 

avoid it. Consumers have a reasonable 

expectation that their issuing bank will 

comply with the requirements of 

Regulation E and stop payment if a valid 

request is entered. Consumers also have 

little to no control over which debit card 

networks their transactions are routed 

through, and no control over whether 

the network offers a stop payment 

service or whether their bank has 

voluntarily enrolled in such a service. 

Lastly, in considering countervailing 

benefits to consumers and competition 

from processing preauthorized debit 

card transactions subject to a 

consumer’s valid stop payment request, 

Supervision found this practice to be 

injurious in its net effects. 

In response to these findings, the 

network operators revised and 

implemented relevant network 

processes and capabilities to ensure that 

they cease to process preauthorized 

debit card payments routed through 

their networks that are subject to 

consumers’ valid stop payment requests. 

2.2 Furnishing 

Entities—such as banks, loan 

servicers, and others (to which we refer 

herein collectively as furnishers)—that 

furnish information to consumer 

reporting companies (CRCs) 13 for 

inclusion in consumer reports play a 

vital role in availability of credit and 

have a significant role to play in the fair 

and accurate reporting of credit 

information. Furnishers are subject to 

several requirements under the FCRA 14

and its implementing regulation, 

Regulation V,15 including obligations to 

reasonably investigate disputes and to 

furnish data subject to the relevant 

accuracy requirements. In recent 

reviews, examiners continued to find 

deficiencies in furnishers’ compliance 

with FCRA and Regulation V 

requirements. 

2.2.1 Duty To Maintain Reasonable 

Procedures To Respond To Identify 

Theft Block Requests Notifications From 

CRCs 

The FCRA requires furnishers to have 

reasonable procedures in place to 

respond to certain notifications they 

receive from CRCs related to 

information resulting from identity theft 

(i.e., identity theft block request 

notifications) to prevent the 

refurnishing of such information.16

Examiners found that furnishers did 

not have reasonable procedures in place 

to respond to identity theft block 

request notifications from CRCs. 

Specifically, in recent reviews of 

installment loan furnishers, examiners 

identified that the furnishers did not 

have any procedures in place to respond 

to identity theft block request 

notifications received from CRCs. 

Consequently, the furnishers did not 

process the requests and repeatedly 

refurnished information that consumers 

asserted had resulted from identity theft 

and, thus, that should have been 

blocked. In response to these findings, 

furnishers are establishing and 

implementing procedures to respond to 

identity theft block request notifications 

received from CRCs. 

2.2.2 Duty To Conduct Reasonable 

Investigations of Indirect Disputes 

After receiving notice of a dispute of 

the completeness or accuracy of any 

information from a CRC, furnishers are 

required to conduct a reasonable 

investigation with respect to the 

disputed information.17 The furnisher 

must review all relevant information 

provided by the CRC and must complete 

the investigation and report the results 

to the CRC within a certain requisite 

timeframe (typically 30 days).18

Conducting a reasonable investigation 

that is responsive to the specific 

allegations in a dispute often requires 

furnishers to at least review information 

relevant to the dispute in its own 

possession and, in some cases, may 

necessarily entail accessing or 

requesting third-party documents and 

other information relevant to the 

dispute to which the furnisher 

reasonably has access. 

Examiners are continuing to find that 

furnishers are violating the FCRA duty 

to conduct reasonable investigations of 

indirect disputes.19 In recent reviews of 

debt collector furnishers, examiners 

found that the furnishers failed to 

conduct reasonable investigations of 

certain indirect disputes in 

circumstances in which the furnishers 

utilized automated dispute response 

systems that reviewed only their own 

systems of record to assess the accuracy 

of the disputed information. Examiners 

identified instances in which the 

furnishers, through their automated 

systems, responded to CRCs verifying 

the information subject to the dispute 

even though the furnishers’ records 

were insufficient to confirm the 

information in a reliable manner. In 

each instance, the furnishers’ automated 

systems did not consider any records of 

the furnishers’ clients—i.e., the entities, 

such as creditors, on behalf of which the 

furnishers were collecting debts— 

relevant to the dispute. 

In addition, examiners found that 

debt collector furnishers failed to 

reasonably investigate certain indirect 

disputes in circumstances in which the 

furnishers’ agents responded to CRCs 

regarding the dispute without 

investigating any relevant information 

on their clients’ systems of record 

despite the agents having access to those 

systems of record. Rather than 

reviewing their clients’ records to which 

they had access to assess the accuracy 

of the disputed information, the 

furnishers’ agents forwarded the 

disputes to the clients for investigation 

and, when the clients failed to respond, 

instructed CRCs to delete the related 


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20 Id. 

21 12 CFR 1022.42(a), (b). 

consumer tradelines. Examiners found 

that the furnishers in these 

circumstances failed to conduct 

reasonable investigations of indirect 

disputes. 

2.2.3 Duty To Establish and Implement 

Reasonable Policies and Procedures 

Concerning the Accuracy and Integrity 

of Furnished Information 

Examiners are continuing to find 20

that furnishers are violating the 

Regulation V duty to establish and 

implement reasonable written policies 

and procedures regarding the accuracy 

and integrity of the information 

furnished to a CRC and to consider and 

incorporate, as appropriate, the 

guidelines of appendix E to Regulation 

V.21 Recent supervisory reviews 

identifying violations of this Regulation 

V requirement include: 

D In reviews of student loan 

furnishers, examiners found that the 

furnishers relied solely on external 

procedures regarding the technical steps 

for creating and transmitting consumer 

reporting files, but maintained no 

internal policies or procedures with 

respect to complying with the 

applicable requirements of the FCRA 

and Regulation V. Examiners found that 

the furnishers’ failure to establish and 

implement reasonable written policies 

and procedures regarding the accuracy 

and integrity of information furnished to 

CRCs contributed to multiple systemic 

accuracy issues identified at the 

furnishers, including, for example, 

continuing to report accounts that had 

been discharged in bankruptcy, 

reporting inaccurate term durations for 

certain loans, and reporting inaccurate 

special comment codes regarding the 

status of certain accounts. 

• In reviews of installment loan 

furnishers, examiners found that 

furnishers lacked reasonable policies 

and procedures for identifying practices 

or activities that can compromise the 

accuracy or integrity of furnished 

information. Specifically, examiners 

found weaknesses in furnishers’ policies 

and procedures with respect to 

considering feedback received from 

CRCs—resulting in the furnishers failing 

to identify that furnishing files were 

rejected by CRCs—and processing 

identity theft block requests received 

from CRCs. Deficiencies in the 

furnishers’ internal controls regarding 

the accuracy and integrity of furnished 

information led to failures in 

identifying, and promptly remediating, 

accounts that were furnished 

inaccurately. Examiners also found that 

furnishers failed to design means of 

communication with CRCs to prevent 

erroneous association of information 

with the wrong consumers, which 

resulted in the furnishing of 

mismatched personal information for 

thousands of consumers. 

D In reviews of credit card furnishers, 

examiners found that the furnishers 

failed to maintain and implement 

reasonable written furnishing policies 

and procedures, including by failing to 

adequately provide for, among other 

things: the identification and handling 

of frivolous or irrelevant disputes, the 

replacement of dispute codes following 

resolution of disputes, and quality 

assurance with respect to the accuracy 

and integrity of information furnished to 

CRCs. Examiners also identified 

deficiencies in furnishers’ policies and 

procedures for correcting information 

after determining it to be inaccurate, 

finding that, for example, such 

deficiencies allowed inaccuracies to 

persist for over a year on average before 

being remediated. 

In response to these findings, 

furnishers are implementing and/or 

enhancing written policies and 

procedures to address the identified 

procedural deficiencies. 

2.3 Short-Term Small Dollar Lending 

The short-term small dollar lending 

market continues to evolve, and as part 

of this market, the Buy Now, Pay Later 

market, where lenders advertise buying 

products over four payments, has 

expanded rapidly over the past few 

years. The paycheck advance market, 

where lenders tie funding amounts to 

accrued or estimated wages and those 

amounts are repayable on the next 

payday or withheld from the next 

paycheck, also has expanded rapidly in 

recent years. Firms sometimes market 

these products as ‘‘earned wage’’ 

products. Certain Buy Now, Pay Later 

firms and certain paycheck advance 

firms consented to CFPB’s examination 

authority. Across these examinations, 

examiners identified a number of unfair, 

deceptive, or abusive acts or practices. 

In addition to the examinations giving 

rise to the findings discussed in this 

section, CFPB staff worked with certain 

State regulators on their examinations of 

Buy Now Pay Later firms. 

2.3.1 Failing To Timely Resolve 

Consumer Disputes 

Consumers who used Buy Now, Pay 

Later loans to purchase products or 

services frequently alleged that the 

merchants did not provide the items or 

services as agreed or communicated 

other disputes to the lender. Lenders 

engaged in unfair acts or practices by 

failing to timely resolve consumer 

disputes in which consumers alleged 

they were owed refunds for various 

reasons, such as where the delay was 

contrary to the dispute policy on its 

website regarding dispute resolution 

timelines. These delays were long, with 

hundreds of consumers deprived of 

funds for months at a time. Consumers 

incurred substantial injury in the form 

of deprivation of funds that should have 

been refunded in a timely manner. 

Additionally, consumers whose claims 

were denied may have been required to 

make full payments at unpredictable 

times after delayed investigations 

during which they were not permitted 

to make payments. The injuries were 

not reasonably avoidable as consumers 

lacked control over the dispute 

resolution process. The substantial 

injuries to consumers were not 

outweighed by any countervailing 

benefits to consumers or competition. In 

response to these findings, the Buy 

Now, Pay Later lenders refunded the 

amounts at issue and implemented 

monitoring to eliminate delayed 

resolutions. 

2.3.2 Misrepresenting Loan Costs or 

Terms 

Buy Now, Pay Later lenders worked 

with merchant partners to advertise 

their loans, and in certain instances, the 

merchant partner websites advertised 

incorrect loan costs or terms. The 

lenders exercised control and approval 

rights over these advertisements. Thus, 

the lenders engaged in a deceptive act 

or practice when its merchant partners 

ran advertisements on their behalf that 

included false representations. These 

advertisements misled or were likely to 

mislead reasonable consumers, and the 

deceptive representations were material 

because they related to the cost and 

terms of the loans as payment methods. 

In response to these findings, the 

lenders contacted the relevant 

merchants to ensure they updated their 

websites and refunded overcharges to 

customers. They also enhanced the 

marketing review process across 

merchant partners. 

2.3.3 Denying Credit Based On 

Payment Processing Deficiencies on 

Earlier Loans 

Buy Now, Pay Later lenders’ payment 

platforms prevented consumers with 

loan balances below $1 from making 

payments. Subsequently, the lenders 

denied those consumers’ loan 

applications on the basis that consumers 

had not paid those balances. The 

lenders engaged in an unfair act or 

practice by preventing consumers with 

loan balances below $1 from making 


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612 Federal Register / Vol. 90, No. 3 / Monday, January 6, 2025 / Notices 

22 12 U.S.C. 5531. 

23 12 U.S.C. 5535(a)(1)(B). See also CFPB, Policy 

on Abusive Acts or Practices, (Apr. 3, 2023), https:// 

www.consumerfinance.gov/compliance/ 

supervisory-guidance/policy-statement-onabusiveness/#1. 

payments, while denying those 

consumers’ loan applications because of 

those same balances. This conduct 

caused or was likely to cause substantial 

injury, as it resulted in the lenders 

denying additional credit for consumers 

with outstanding balances of less than 

$1. In addition, consumers may have 

incurred costs attempting to secure 

alternative credit. Consumers also may 

have spent time contacting the lenders 

to resolve these outstanding balances. 

This practice was not reasonably 

avoidable, as the lenders did not allow 

consumers to make payments to cure an 

outstanding balance of less than $1. The 

substantial injury to consumers was not 

outweighed by any countervailing 

benefits to consumers or competition. In 

response to these findings, Supervision 

directed the lenders to enhance system 

capabilities to allow consumers to pay 

off or automatically remove loan 

balances of less than $1 and refrain from 

preventing consumers from obtaining 

additional loans if they have balances of 

less than $1. 

2.3.4 Designing Consumer Interfaces 

To Include Misrepresentations About 

Uses and Benefits of Tips and Tipping 

Examiners found that lenders 

designed consumer interfaces for 

paycheck advance products—sometimes 

marketed as ‘‘earned wage’’ products— 

to include statements and illustrations 

representing that if consumers paid tips, 

the tips would help specific numbers of 

customers and were a way to help other 

borrowers. In fact, lenders added tips to 

general revenues. 

A representation, omission, act, or 

practice is deceptive when: (1) the 

representation, omission, act or practice 

misleads or is likely to mislead the 

consumer; (2) the consumer’s 

interpretation of the representation, 

omission, act or practice is reasonable 

under the circumstances; and (3) the 

misleading representation, omission, act 

or practice is material.22 Examiners 

found lenders engaged in deceptive acts 

and practices when they misled or were 

likely to mislead reasonable consumers 

through written and graphic references 

that correlated amounts of tips provided 

to numbers of people helped. They also 

misled or were likely to mislead 

reasonable consumers into believing 

tips directly benefited other customers, 

although in reality they added tips to 

general revenue. These representations 

were material because they were likely 

to affect customers’ choices regarding 

tipping, including whether to tip and 

how much. 

An abusive act or practice: (1) 

materially interferes with the ability of 

a consumer to understand a term or 

condition of a consumer financial 

product or service; or (2) takes 

unreasonable advantage of: a lack of 

understanding on the part of the 

consumer of the material risks, costs or 

conditions of the product or service; the 

ability of the consumer to protect the 

interest of the consumer in selecting or 

using a financial product or service; or 

the reasonable reliance by the consumer 

on a covered person to act in the interest 

of the consumer.23 Examiners found that 

lenders engaged in abusive acts or 

practices when they took unreasonable 

advantage of consumers’ inability to 

protect their interests in selecting or 

using consumer financial products or 

services. Lenders took unreasonable 

advantage of superior information in 

knowing that tips went to general 

revenue. Under the circumstances and 

given the misrepresentations, customers 

lacked the ability to make fully 

informed choices about whether and 

how much to tip, which affected the 

ability to protect their monetary 

interests. Lenders gained unreasonable 

advantages when they designed 

interfaces to take advantage of 

consumers’ misimpressions, based on 

specific consumer research they 

conducted, and profited from tips that 

would not have been made or were 

higher than if customers had known tips 

went to general revenue. 

2.3.5 Blocking Loan Account Closure 

and Continuing to Debit Deposit 

Accounts 

Examiners found that lenders engaged 

in deceptive acts and practices when 

they prevented paycheck advance 

product consumers from closing their 

loan accounts until they resolved 

pending debits, and continued debiting 

consumer deposit accounts, despite 

representations that accounts could be 

closed at any time and that lenders 

would not engage in collection activity. 

Lenders misled or were likely to 

mislead consumers through confusing 

and conflicting representations about 

how to close loan accounts and that 

consumers could cancel agreements and 

use of services at any time, the only 

consequences of nonpayment being 

placing loan accounts on hold. 

Consumers could reasonably interpret 

lenders’ statements to mean that they 

could cancel agreements and services at 

any time, along with pending debits, 

and would not be blocked from closing 

their loan accounts until pending debits 

were processed. Lenders’ 

representations were material because 

they were likely to affect consumer 

choice regarding whether to use the 

service in the first place and how they 

might employ funds differently if 

consumers understood debits continued 

after attempted account closure. 

Examiners also found that lenders 

engaged in abusive acts or practices 

when they took unreasonable advantage 

of consumers’ inability to protect their 

interests when they blocked consumers 

from closing their loan accounts and 

continued to attempt to debit their 

deposit accounts, despite statements 

that consumers could close their 

accounts any time and that lenders 

would not engage in collection activity. 

Consumers could not protect their 

interests in selecting or using paycheck 

advance products because they were 

blocked from closing their loan accounts 

and were subject to repeated debits, 

despite representations that they could 

close their loan accounts at any time 

and lenders would not take repayment 

actions against them. At account 

opening, lenders led consumers to 

believe they could close their accounts 

anytime and avoid repeated debits. But 

after attempting account closure, 

consumers were subject to repeated 

debits and potentially to third-party 

fees. Lenders gained unreasonable 

advantage by inducing consumers to 

take out paycheck advance products 

under false premises, gaining more loan 

accounts than they otherwise would 

have. 

2.3.6 Blocking Funds Transfers 

Examiners found that lenders engaged 

in unfair acts or practices when 

technology failures resulted in 

consumer having certain transfers 

blocked from linked deposit accounts to 

other personal accounts. Specifically, 

lenders offered a payment card linked to 

a particular deposit account in concert 

with the paycheck advance product, and 

during a specific time period, 

consumers who had not repaid the 

paycheck advances timely and had 

balances in these linked accounts were 

unable to access their funds in a timely 

manner. Lenders caused substantial 

injury because consumers were unable 

to access their funds in a timely manner 

and were denied access to funds. Other 

injury included time spent and trouble 

and aggravation caused when 

consumers tried to cure the problem. 

Consumers could not reasonably avoid 

or anticipate the injury because they 

were not warned of the error and could 

not resolve it themselves. The 


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Federal Register / Vol. 90, No. 3 / Monday, January 6, 2025 / Notices 613 

24The final rule is available at: cfpb_overdraftregulatory-text-and-commentary_2024–12.pdf. 

25The Decision and Order is available at: cfpb_

Publication-Redacted-Decision-and-OrderDesignating-Google-Payment-for-Su_6EZQyMz.pdf. 

26The final rule, as published in the Federal 

Register, 89 FR 99582 (Dec. 10, 2024). 

underlying technology failures and their 

consequences provided no discernible 

benefit to consumers or competition. 

3. Supervisory Developments 

Set forth below are select supervision 

program developments including final 

rules and orders that have been issued 

since the last edition of Supervisory 

Highlights. 

3.1.1 CFPB Issues Final Rule 

Governing Overdraft Lending at Very 

Large Financial Institutions 

On December 12, 2024, the CFPB 

issued a final rule related to overdraft 

lending.24 The final rule updates the 

Federal regulations governing overdraft 

fees for financial institutions with more 

than $10 billion in assets. Extensions of 

overdraft credit provided by these 

institutions will now adhere to the 

consumer protections required of 

similarly situated products, unless the 

overdraft fee is $5 or less, or otherwise 

only recovers estimated costs and 

losses. The rule will allow consumers to 

better comparison shop across credit 

products and provides substantive 

protections that apply to other 

consumer credit. 

3.1.2 CFPB Orders Federal 

Supervision of Google Following 

Contested Designation 

On December 6, 2024, the CFPB 

published an order establishing 

supervisory authority over Google 

Payment Corp.25 This was the CFPB’s 

second supervisory designation order in 

a contested matter. While Google 

Payment Corp. is already subject to 

CFPB’s enforcement jurisdiction, the 

CFPB determined that Google Payment 

Corp. met the legal requirements for 

supervision. 

3.1.3 CFPB Issues Final Rule Defining 

Larger Participants of a Market For 

General-Use Digital Consumer Payment 

Applications 

On November 21, 2024, the CFPB 

issued a final rule to establish authority 

over nonbank covered persons that are 

larger participants of a market for 

providing general-use digital consumer 

payment applications.26 The rule, 

which takes effect January 9, 2025, will 

allow the CFPB to supervise these firms, 

which provide widely-used payment 

wallet and funds transfer apps. Nonbank 

firms qualify as larger participants if 

their general-use digital consumer 

payment applications facilitate more 

than 50 million consumer payment 

transactions denominated in U.S. 

dollars per year and they are not small 

business concerns as defined by Small 

Business Administration regulations. 

The CFPB estimates that nonbank larger 

participants in this market collectively 

facilitated over 13 billion such 

consumer payment transactions 

annually. The rule will help the CFPB 

to ensure that these companies follow 

Federal consumer financial law just like 

large banks and credit unions already 

supervised by the CFPB. The rule also 

will help the CFPB to detect and assess 

risks to consumers and markets 

including emerging risks. 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–31670 Filed 1–3–25; 8:45 am] 

BILLING CODE 4810–AM–P 

CONSUMER PRODUCT SAFETY 

COMMISSION 

[Docket No. CPSC–2024–0045] 

Agency Information Collection 

Activities; Proposed Collection; 

Comment Request; Bathtub Slip 

Resistance Study 

AGENCY: Consumer Product Safety 

Commission. 

ACTION: Notice of information collection; 

request for comment. 

SUMMARY: As required by the Paperwork 

Reduction Act of 1995, the Consumer 

Product Safety Commission (CPSC or 

Commission) requests comments on a 

request for approval from the Office of 

Management and Budget (OMB) for a 

new information collection. The 

proposed collection is a bathtub slip 

resistance study to support work on a 

voluntary Safety Standard for Bathtub 

and Shower Structure. Before CPSC can 

collect this information from the public, 

it must solicit public comment on this 

proposed collection of information and 

receive OMB approval. This notice 

describes the collection of information 

for which CPSC intends to seek OMB 

approval. 

DATES: Submit comments on the 

collection of information by March 7, 

2025. 

ADDRESSES: You may submit comments, 

identified by Docket No. CPSC–2024– 

0045, within 60 days of publication of 

this notice by any of the following 

methods: 

Electronic Submissions: Submit 

electronic comments to the Federal 

eRulemaking Portal at: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

Do not submit through this website: 

confidential business information, trade 

secret information, or other sensitive or 

protected information that you do not 

want to be available to the public. The 

Commission typically does not accept 

comments submitted by email, except as 

described below. 

Mail/hand delivery/courier/written 

submissions: CPSC encourages you to 

submit electronic comments by using 

the Federal eRulemaking Portal. You 

may, however, submit comments by 

mail/hand delivery/courier to: Office of 

the Secretary, Consumer Product Safety 

Commission, 4330 East West Highway, 

Bethesda, MD 20814; telephone (301) 

504–7923. 

Instructions: All submissions received 

must include the agency name and 

docket number for this notice. CPSC 

may post all comments without change, 

including any personal identifiers, 

contact information, or other personal 

information provided, to: http://

www.regulations.gov. If you wish to 

submit confidential business 

information, trade secret information, or 

other sensitive or protected information 

that you do not want to be available to 

the public, you may submit such 

comments by mail, hand delivery, or 

courier, or you may email them to cpscos@cpsc.gov. 

Docket: For access to the docket to 

read background documents or 

comments received, go to: https://

www.regulations.gov, insert docket 

number CPSC–2024–0045 into the 

‘‘Search’’ box, and follow the prompts. 

FOR FURTHER INFORMATION CONTACT: 

Cynthia Gillham, Consumer Product 

Safety Commission, 4330 East West 

Highway, Bethesda, MD 20814; (301) 

504–7791, or by email to: pra@cpsc.gov. 

SUPPLEMENTARY INFORMATION: Under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3521), before an agency 

submits a proposed collection of 

information to OMB for approval, it 

must first publish a document in the 

Federal Register providing a 60-day 

comment period and otherwise consult 

with members of the public and affected 

agencies concerning the proposed 

collection of information. In this notice 

we provide the estimated burden 

associated with a bathtub slip resistance 

study necessary to update information 

to support work on a voluntary Safety 

Standard for Bathtub and Shower 

Structure to replace ASTM F462, 

Standard Consumer Safety 


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