The CFPB and the Business of Insurance

DWT payments team member Adam Maarec recently co-authored (with James C. Sivon) an article entitled "The CFPB and the Business of Insurance: An Analysis of the Scope of CFPB’s Authority Over Insurance Sales" in the Quarterly Report of the Conference on Consumer Finance Law.

In 2014, the Bureau of Consumer Financial Protection (CFPB) issued an enforcement order against a bank and its service provider for allegedly misleading sales of insurance. That order was based on the CFPB’s power to prohibit unfair, deceptive, or abusive acts or practices (UDAAP). The article authored by Mr. Maarec and Mr. Sivon argues that, contrary to the CFPB’s position in that case, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) restricts the CFPB’s authority over the marketing and sale of insurance by banks and insurance companies. The article also argues that CFPB’s UDAAP authority should not be read to reach the sale of optional insurance products, which are not required in order for a consumer to obtain a financial product or service, by a bank or service provider. Finally, it concludes that the McCarran Ferguson Act should prevent the CFPB from superseding any state laws or regulations governing insurance activities.

To read the article in its entirety, click here.