Last Week, This Morning

February 9, 2026

Below you will find several key developments in the financial services industry, including related developments in information privacy and data security, from the past week. We add an "Amicus Brief(ly)¹" comment to each item, where we briefly (see what we did there?) note for friends (and again?) of CounselorLibrary the important takeaways from the developments outlined in the email. Our legal reporters - CARLAW, HouseLaw, InstallmentLaw, PrivacyLaw, and BizFinLaw - provide more comprehensive, real-time updates of federal and state laws, regulations, litigation, and other industry items of interest. For a personal guided tour and free trial of any of these legal reporters, please contact Michael Willer at 614-855-0505 or mwiller@counselorlibrary.com.

The Federal Trade Commission recently announced that it submitted a draft Advance Notice of Proposed Rulemaking on the Negative Option Rule to the Office of Information and Regulatory Affairs (within the Office of Management and Budget) for review. The OIRA had determined that the planned ANPRM is a "significant regulatory action" and must undergo review before the FTC issues it. Once the OIRA completes its review, the FTC can publish the ANPRM in the Federal Register, and interested parties may comment on it.

In July 2025, the U.S. Court of Appeals for the Eighth Circuit vacated the FTC's Negative Option Rule right before the rule's compliance deadline. Negative option plans generally involve a seller interpreting a consumer's silence or inaction as consent to continue to receive a particular product or service; a consumer must actively cancel the product or service to avoid being charged by the seller.

Shortly after the FTC finalized the rule in November 2024, various industry associations and businesses challenged the rule in four circuit courts of appeals. The rule required sellers to obtain, and maintain records of, unambiguous affirmative consent to a negative option feature and to provide a simple mechanism for cancellation that is as easy to use as the mechanism the consumer used to consent to the subscription. The FTC's compliance deadline for the rule, which had been extended once, was set to go into effect on July 14, 2025. The Eighth Circuit vacated the rule based on procedural deficiencies in the rulemaking process. The Eighth Circuit found that the FTC erroneously determined that the national economic effect of the proposed rule would be under $100 million and, on that basis, declined to conduct a preliminary regulatory analysis describing and analyzing the reasonable regulatory alternatives to the proposed rule. In January and February 2024, the FTC held informal hearings before an administrative law judge, who observed that unless each business used fewer than 23 hours of professional services at the lowest end of the spectrum of estimated hourly rates, the rule's compliance costs would exceed $100 million. The ALJ found that this estimate was "clearly unrealistically low" and that the rule would have an annual effect on the national economy that exceeded the $100 million threshold.

Amicus Brief(ly): It appears that the FTC is going to see this Negative Option Rule through, in one form or another. Having lost the procedural battle over how it issued the last version of the rule, the FTC is back to square one in the rulemaking and will issue the ANPRM if and when the OIRA approves it. (We have no indication to the contrary, so we expect to see the ANPRM within the next month or so.) Nothing in the FTC's announcement indicates that it has changed direction on any of the provisions of the substantive rule that the Eighth Circuit vacated, so providers should refine their comments as we await the publication of the ANPRM in the Federal Register. The earlier version of the rule would have required providers to, among other things, make clear disclosures about negative option features, make it easy for customers to cancel subscriptions for a product or service, and obtain clear and unambiguous affirmative consent before charging a customer for the product or service. It is difficult to imagine a proposed rule that does not include those provisions.

On February 4, U.S. Senator Elizabeth Warren, Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, sent a letter to several major auto financing companies and servicers, as well as the American Recovery Association, the National Independent Auto Dealers Association, and the American Financial Services Association, seeking information about vehicle repossession policies, practices, and error rates. In the letter, Warren states: "While the Consumer Financial Protection Bureau has historically engaged in oversight of illegal auto repossessions, the Trump Administration has kneecapped the agency's ability to protect consumers from auto repossession errors. To understand the impact of these actions by the Administration, I write to request information on [the company's] practices to avoid errors and information on errors from the last four years." Warren has requested that the recipients of the letters provide responses no later than February 16, 2026. The letters request the following repossession information, covering the period from January 1, 2022, through December 31, 2025:

• whether the company services its own financing contracts or hires a third party to service, and the identity of those third-party servicers;
• the number of vehicles that the company ordered to be repossessed within the four-year period, what party completed the repossession (e.g., the company itself or a third party), how many repossession events were in error or were thought by the consumer to be in error, and what policies are in place to identify and address repossessions made in error;
• how often the company handles a dispute by the consumer about the terms of a financing contract, particularly following a loan modification, and how often such disputes relate to COVID-era modifications;
• how many repossessions occur for contracts where a consumer has made a formal or informal complaint that there was a material problem with the underlying transaction;
• how many consumer complaints the company has received concerning the behavior of the initial seller of a vehicle;
• steps the company takes to ensure that its agents, or agents of its servicers, only tow or attempt to tow the correct vehicle;
• use of GPS monitors, kill switches, starter interrupt devices, or other similar electronic devices that allow the company to locate or disable a vehicle in the event of repossession or the use of any other device to remind or encourage consumers to make payments;
• policies and practices concerning personal property that is left in a repossessed vehicle.

Amicus Brief(ly): The CFPB has not been actively policing regulated entities over the past year with the same fervor as it had in the past, and it looks like Senator Warren is seeking information that she believes a more active version of the CFPB might be gathering through enforcement and oversight. Curiously, she is asking for data looking back four years - three of which saw these companies living with a far more active CFPB. It could be that Senator Warren wants to contrast the companies' practices over the past year with the practices of the prior three years. Alternatively, it could be that, because the timing of this letter coincides with reports of rising consumer delinquencies and defaults across credit types, Senator Warren is (cynically) assuming that companies have relaxed their policies and procedures because of the gentler federal oversight. The CFPB has made similar assumptions in the past when it comes to repossessions, speculating about purposefully harmful repossession practices and ignoring the reality that: (1) the consumer credit laws that govern repossession include private rights of action with substantial damages for aggrieved consumers, and (2) finance companies, in our experience, prefer to keep consumers in their cars and paying their contracts. Companies that respond to this inquiry are unlikely to provide groundbreaking material for the next version of the CFPB to pursue.

The California attorney general recently announced an investigative sweep focused on businesses' use of consumers' personal information to set targeted, individualized prices for products and services, a practice known as surveillance pricing. The AG expressed a concern that, as a result of these practices, consumers who buy the same product or service at the same time from the same business may be offered different prices. According to the AG, "surveillance pricing may trigger obligations under and even violate the California Consumer Privacy Act, which includes a 'purpose limitation principle' that limits a business's use of personal information to purposes that are consistent with the reasonable expectations of consumers. Businesses that use data in ways that targeted consumers might not expect - including by using that data to set individualized prices - may be violating California law."

The AG sent letters to businesses with a "significant online presence in the retail, grocery, and hotel sectors" requesting information on the business's use of consumers' personal information to set prices, disclosures regarding personalized pricing, pricing experiments undertaken by the business, and measures to comply with algorithmic pricing, competition, and civil rights laws.

Amicus Brief(ly): California remains one of the busiest states in the field of data use protection and enforcement, and this investigative sweep is consistent with the state's focus on whether and how companies use data they get from consumers. This "surveillance pricing" practice sounds a little nefarious if it is happening, and companies subject to this investigative sweep will not be able to put the toothpaste back in the tube. The AG is focused on retailers with this effort and leaning into the CCPA's "purpose limitation principle" to make sure consumers would not be surprised to learn that retailers might use their data to charge them prices that are different (and less favorable?) from other consumers. We bet they will be surprised and a little disappointed. This may be an opportune time to review, and possibly tune up, pricing practices and models along with consumer privacy and data use disclosures to ensure that they align.

On February 2, the Wisconsin Department of Transportation published final rules, effective April 1, 2026, that amend the vehicle odometer disclosure requirements in Chapter 154 of the Wisconsin Administrative Code to allow for electronic disclosures.

Current practice requires wet signatures for odometer statements for all non-exempt vehicles. The National Highway Traffic Safety Administration regulations at 49 CFR Part 580 regulate odometer disclosure requirements and, more specifically, authorize the use of electronic signatures for odometer disclosure statements and provide technical requirements to ensure the validity and security of the electronic signatures. Because odometer disclosure statements are required and regulated by federal law, the Wisconsin DOT adopted practices that conform Wisconsin's odometer disclosure statement signature requirements to those federal electronic signature requirements.

According to the Wisconsin DOT, "electronic signatures would provide efficiencies for DMV, third party partners, motor vehicle dealers, lien holders, and our customers. The goal of this rulemaking is to facilitate a secure electronic odometer disclosure process that no longer relies on physical paper. Electronic disclosures create[] opportunities to increase efficiency and accuracy[] and to mitigate opportunities for odometer fraud. Electronic disclosures are also pandemic-friendly as [they] allow[] for remote transactions."

Amicus Brief(ly): States have been a little slow to adopt electronic signature permissions specific to the odometer statement, but they are making progress. The NHTSA made clear in 2019 that electronic disclosure of the odometer statement and electronic signatures were allowed, at least for its purposes. But the states, not the federal government, handle vehicle title paperwork and the material that comes with it, so they have to decide when and how to accept electronic signatures on typical vehicle ownership transfer documentation like the odometer statement. Only a handful of states updated their regulations before Wisconsin to allow for electronic signatures on the odometer statement specifically. It is understandable - this minor change is not a top priority, especially given that states moved to adopt electronic titling and authorized electronic transactions long ago, following the adoption of the federal ESIGN Act more than 25 years ago. But there is time and cost efficiency to be had, so we will be watching for more states to make similar changes to their regulations concerning the execution of vehicle transaction documents.

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¹ For the unfamiliar, an “Amicus Brief” is a legal brief submitted by an amicus curiae (friend of the court) in a case where the person or organization (the “friend”) submitting the brief is not a party to the case, but is allowed by the court to file the brief to share information or expertise that bears on the issues in the case.