January 02, 2023

The Federal Trade Commission's ambitious consumer protection rulemaking and enforcement efforts will continue to command the spotlight in 2023 along with the Consumer Financial Protection Bureau's challenge to a ruling that threatens to dismantle the agency's work and a looming U.S. Supreme Court decision that could spell the end of a long-standing Big Tech liability shield.

As the new year kicks off, attorneys will be keeping a close eye not only on what's going on in the courts, but also on how federal regulators choose to wield their powers in the consumer protection realm.

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CFPB Confronts Latest Threat to Its Existence

The CFBP has asked the Supreme Court to review a Fifth Circuit ruling that the agency is unconstitutionally funded, a decision that represents the most serious challenge yet to the bureau's existence as we know it.

Although the CFPB has weathered previous constitutional challenges, including one that resulted in a 2020 Supreme Court ruling that it was unconstitutional for the agency's director to be removable only for cause, what the Fifth Circuit did is potentially further reaching. Holding that the CFPB is unconstitutionally funded and striking down its payday lending rule "as a product of the bureau's unconstitutional funding scheme," the circuit court used reasoning that casts doubt on the continued validity of practically everything the agency has ever done, attorneys noted.

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The investigation into Cash App is part of a wider consumer protection sweep that the CFPB initiated last year when it ordered a group of tech giants, including Amazon, Facebook and Google, to turn over information related to their payments-related systems and products.

"I believe the focus on these companies will increase in 2023," said Betsy A. Miller, partner and chair of the public client practice group at Cohen Milstein Sellers & Toll PLLC. "Fraud is rampant on the platforms. Privacy is dicey at best, and the platforms are replete with deceptive statements about the services and protections offered to consumers."

The case is Community Financial Services Association of America Ltd. v. Consumer Financial Protection Bureau, case number 22-448, in the U.S. Supreme Court.

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