Insights

In this month's article, we share some of our top "bites" covered during the August 2026 webinar.

Bite 13: Vought Testifies at House Financial Services Hearing

On July 15, 2026, the House Committee on Financial Services hosted CFPB Acting Director Russell Vought for a hearing on the agency's semi-annual report, reform initiatives, and legislative efforts. When asked what structural reforms he would implement at the CFPB, Acting Director Vought answered that the "biggest thing that you can do is put the agency under the appropriations process, the degree to which it doesn't have to come to Congress and have its budget approved and dispensed to is a massive, massive problem. And I think it's the number one thing that I would I would point the committee to." Acting Director Vought also said that in the past, "the supervision program pushed well past the limits of statutory authority under the guise of consumer protection." Acting Director Vought said the CFPB now avoids duplication of supervision by other regulators and that the CFPB focuses on "addressing actual harm to consumers, ensuring due process, seeking collaboration when appropriate, and promoting efficiency."

Bite 12: CFPB Nominee Testifies Before Senate Committee

On July 23, 2026, Brian Johnson, testified before the Senate Committee on Banking, Housing and Urban Affairs as the nominee to be the next Director of the CFPB. Johnson discussed his experience with the CFPB and in the private sector, focusing on federal consumer financial laws. Johnson stated that consumer protection is not a zero-sum game. He said, "Where the CFPB writes clear and durable rules of the road, obeys its own statutory bounds, justly enforces the law, and enables consumers to make their own financial decisions, both consumers and market participants win." He stated that if he is confirmed, he will have three priorities: (1) protecting consumers, especially those who are vulnerable to fraud and scams; (2) promoting accountability by ensuring the CFPB acts prudently and within its statutory limits; and (3) modernizing CFPB operations.

Bite 11: Paoletta Takes Over as Acting CFPB Director

On August 1, 2026, CFPB Deputy Director and Chief Legal Officer Mark Paoletta became the agency's Acting Director. Paoletta took over upon expiration of Acting Director Vought's term. Acting Director Vought could only serve for a limited period under the Federal Vacancies Reform Act. It has been reported that Vought will remain at the CFPB in a senior advisor role. Paoletta will lead the Bureau on an interim basis while the Senate considers President Trump's nomination of Brian Johnson to serve as the next Director of the CFPB. Johnson appeared at a July 23, 2026, Senate Banking Committee nomination hearing, but the Committee has not yet voted on his nomination. The Senate is now in recess until mid-September.

Bite 10: Former CFPB Officials Start Consumer-Focused Law Firm

On July 14, 2026, three high-ranking former CFPB enforcement officials launched a new public interest law firm focused on consumer rights, tenant rights, workers' rights and civil rights. The founding partners include former CFPB Enforcement Director Eric Halperin; former acting Enforcement Director Cara Petersen; and special counsel Tara Mikkilineni. The firm also has former CFPB enforcers as Counsel. During their time at the CFPB, they led a team that secured consent orders for $9.5 billion in penalties and consumer refunds between 2021 to 2025. Over the past year, the three worked at a nonprofit that advocated for pro-consumer policies. The new firm plans to partner with advocacy groups, state attorneys general and other public interest clients in cases involving: (a) predatory lending and illegal junk fees; (b) deceptive schemes and unlawful evictions; (c) discriminatory housing practices; (d) wage theft and illegal misclassification; (e) invasive monitoring programs and algorithmic wage?setting; and (f) discriminatory lending.

Bite 9: CFPB Submits Open-Banking Proposal to OIRA

On August 4, 2026, the CFPB submitted a new proposal entitled "Personal Financial Data Rights Reconsideration" to the White House's Office of Information and Regulatory Affairs ("OIRA"). The submission appears to be astep toward replacing the open-banking rule that was completed in late 2024, during President Biden's Administration. The 2024 rule generally prohibited covered data providers from charging fees for providing required data access. Industry groups immediately sued the CFPB after the 2024 rule was completed, alleging that the CFPB overstepped its legal authority. The substance of the new proposal has not yet been made public, but the submission to OIRA confirms that the CFPB is moving forward with its previously announced plans to revamp the rule. Once OIRA completes its review, the CFPB will likely publish the proposed rule in the Federal Register and begin the public comment process.

Bite 8: CFPB Announces Changes to its Complaint Portal

On August 14, 2026, the CFPB announced that it is stopping publication of unverified complaint narratives and visualizations in its complaint portal. The CFPB said it is making this change to "more closely align the Bureau's operations with its statutory authorities and to mitigate the risk to consumers and companies of publishing confusing or misleading information[.]" The CFPB noted that it has long acknowledged that the utility of such publication is minimal, while often causing confusion and providing misleading data. The CFPB stated that publishing the narratives in the complaint database can provide a less-than-representative sample of one-sided experiences that cannot provide consumers with a balanced and accurate view of companies' compliance with their legal obligations. The CFPB also noted that these narratives needlessly harm companies' reputations. The CFPB stated that it remains committed to meeting its statutory obligations and will continue to collect, monitor, and respond to consumers' complaints; to systematically review and assess how well companies are providing responses; to share complaint information with regulators; and to disclose certain data in response to FOIA requests.

Bite 7: FTC Issues Policy Statement on Disparate Impact

On August 7, 2026, the FTC issued a policy statement clarifying that the FTC will no longer pursue claims based on disparate-impact or "unfair discrimination" theories. The policy statement follows President Trump's executive order titled "Restoring Equality of Opportunity and Meritocracy" that he issued last year instructing agencies to deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability. The FTC previously pursued disparate-impact claims in two contexts: (1) under Section 5 of the FTC Act (where they have been styled as "unfair discrimination" claims); and; (2) under the Equal Credit Opportunity Act ("ECOA"). The policy statement noted that because of the FTC's lack of statutory authority to bring disparate-impact claims and the EO, the "FTC will no longer pursue disparate-impact claims in any context." The policy statement also stated that because Section 5 does not create an antidiscrimination cause of action, the FTC will not bring any such claims under Section 5. The policy statement clarifies that the FTC will continue to assert disparate-treatment claims under ECOA.

Bite 6: FTC, UT, and CA Take Action Against Telehealth Provider

On July 29, 2026, the FTC, joined by Utah and California, sued a telehealth provider in the U.S. District Court for the Northern District of California. The complaint alleges that the telehealth provider shared consumers' sensitive health information about medical conditions with third-party advertising platforms despite claiming its services maintain consumers' privacy and also alleges that the company deceived users about its billing and cancellation practices. The complaint also alleged that the telehealth provider made it difficult for consumers to cancel subscriptions by failing to clearly and conspicuously inform consumers when their prescriptions would be refilled each month. The complaint alleged that the telehealth provider told consumers they would be able to consult with a medical provider to find out of the treatment is "right for them," but charged consumers for prescriptions almost immediately after they submitted an intake form. The company allegedly did not give most consumers a consultation with a provider. The FTC alleges these practices have violated the FTC Act and the Restore Online Shoppers' Confidence Act, which prohibits deceptive billing and subscription practices; Utah alleges violations of the Utah Consumer Sales Practices Act; and California alleges violations of California's False Advertising and Unfair Competition Laws.

Bite 5: DOJ Takes Action Against Towing Company

On July 15, 2026, the Department of Justice ("DOJ") announced a settlement with a California-based towing company over allegations that it violated the Servicemembers Civil Relief Act ("SCRA") by illegally auctioning motor vehicles owned by members of the military. The DOJ filed a lawsuit in the U.S. District Court for the Central District of California on March 25, 2026, alleging that the company illegally sold or disposed of as many as 148 vehicles owned by servicemembers, many of which were towed from Marine Corps Base Camp Pendleton. The SCRA requires tow companies to obtain a court order before selling or disposing of a vehicle owned by an SCRA-protected servicemember, which the complaint alleges the company failed to do. In May 2024, a Military Legal Assistance attorney reportedly contacted the company and allegedly explained that the company was violating the SCRA. The DOJ alleged that the company continued to sell and dispose of vehicles owned by SCRA-protected servicemembers after this interaction. The settlement agreement requires the company to pay $160,000 to servicemembers who were harmed by the conduct. Since 2011, the DOJ has obtained over $489 million in monetary relief for over 152,000 servicemembers through its enforcement of the SCRA.

Bite 4: FTC Takes Action Against Student Loan Forgiveness Operation

On July 21, 2026, the FTC announced a settlement with an individual operator of a student loan debt forgiveness operation. The FTC sued the company and its operators in November 2024, alleging that they pretended to be affiliated with the U.S. Department of Education and falsely promised student loan forgiveness. In September 2025, the U.S. District Court for the District of Nevada entered orders against two operators of the company, banning them each from engaging in the debt relief industry. The latest proposed order bans the individual from engaging in debt relief services and telemarketing. The proposed order also imposes a monetary judgment of more than $45.9 million, but all but approximately $185,000 will be suspended due to the operator's inability to pay. The settlement with the individual operator, along with the default order entered against the corporate defendants, resolves the litigation against the remaining defendants in this action.

Bite 3: FTC Takes Action Against Credit Repair Operation

On August 10, 2026, the FTC announced that at its request, a federal court temporarily halted a credit repair operation of 17 related companies and their principals. The FTC alleged that, since at least 2016, the companies made false and misleading promises about their credit repair services, impersonated debt collection companies and creditors, collected illegal upfront fees, and engaged in unlawful subscription enrollment practices. The FTC alleges that these companies received nearly $200 million from consumers in unlawful up-front and recurring charges. The FTC also alleged that the companies used paid search advertising to, in some instances, specifically target military servicemembers owing debts to military-related creditors. Finally, the FTC alleged violations of the FTC Act, the Credit Repair Organizations Act, the Telemarketing Sales Rule, the Gramm-Leach-Bliley Act, the Restore Online Shoppers' Confidence Act, and the Electronic Fund Transfer Act.

Bite 2: Regulators in 47 States Take Action Against Mortgage Servicer

On August 12, 2026, news outlets reported that forty-eight financial agencies in forty-seven states have reached a $15.5 million settlement with a mortgage servicer over allegations that the servicer imposed "force-placed" insurance costs on borrowers who already had active homeowners' insurance policies. The company worked with state regulators to self-identify and proactively remediate more than $4.5 million to the impacted borrowers, and it will pay nearly an additional $11 million for costs and penalties. After a multistate examination of the company, agencies alleged that the Company imposed force-placed insurance on more than 4,200 borrowers with active homeowners' insurance policies. The company will be required to implement and conduct enhanced monitoring for loans that have force-placed insurance and must also implement other actions to strengthen controls. The District of Columbia led the enforcement team, with the assistance of the states of Arkansas, Iowa, Massachusetts, and Montana.

Bite 1: FTC Takes Action Against Bill Payment Firm

On August 17, 2026, the FTC announced a settlement with an online bill payment firm to resolve allegations that the company and two of its co-founders used misleading search ads to impersonate consumers' billers and mislead consumers about millions of dollars in fees they allegedly tacked on to consumers' bills. The FTC alleged that the company deceived consumers into using its third-party bill payment platform to pay utility, car loan, and other bills, by disguising itself as the official payment channel for those bills. The FTC alleged that the company's landing page featured other companies' names and logos, but that the company did not have a relationship with the majority of the companies it claimed were part of its payment network. The FTC further alleged that the company added extra "delivery fees," which were not clearly disclosed, onto the bills it paid on behalf of consumers. The FTC also claimed the company deceptively signed consumers up for its recurring subscription program. Under the proposed order, the company agreed to pay $2.1 million, which will be used for consumer redress. The company and its two co-founders will also be prohibited from misrepresenting their affiliation with billers, misrepresenting the nature or purpose of any fee, and charging consumers without first obtaining their express informed consent.

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.

Justin B. Hosie is a partner in the Tennessee office of Hudson Cook, LLP. He can be reached at 423.490.7564 or by email at jhosie@hudco.com. Eric L. Johnson is a partner in the Oklahoma office of Hudson Cook, LLP. He can be reached at 405.602.3812 or by email at ejohnson@hudco.com. Kristen Yarows is an associate in Hudson Cook's Washington, D.C. office. Kristen can be reached at kyarows@hudco.com.