On August 10, 2022, the Consumer Financial Protection Bureau issued an interpretive rule stating that digital marketing providers that “blended” the targeting and delivery of advertising to consumers on behalf of financial services companies are subject to the jurisdiction of the CFPB. has been issued. The Interpretive Rule will arguably set the jurisdictional foundation for further action in connection with his CFPB’s market surveillance initiative on data collection for technology companies. It also expands the scope of entities that are “service providers” pursuant to the Consumer Financial Protection Act, thus prohibiting Unfair, Fraudulent, or Abusive Acts and Practices (UDAAP) as currently interpreted by the CFPB. Subject to CFPB authority. as blanket discrimination.

Summary of CFPB Interpretive Rules

As a general matter, the CFPB has jurisdiction over “covered persons,” which are entities that offer or provide financial products or services for use by consumers primarily for personal, family, or household purposes. The CFPB also prohibits unfair, deceptive, and abusive conduct or practices against “service providers,” entities that provide essential services to Covered Persons in connection with the provision of consumer financial products. has several jurisdictions, including Or service. However, Congress has moved away from the definition of “service provider” to define any entity that provides ministerial assistance to a subject or “time or space” for the advertisement of financial products or services through print, newspaper, or electronic media. I cut it.

Under this new interpretation, the CFPB indicates that digital marketing providers provide an important service, thus identifying or targeting prospective customers or selecting content that influences consumer engagement. You are considered a service provider if you place or deploy The CFPB also says digital marketing firms that do more than provide “time or space” for advertising are outside the scope of Congress’ service provider exception and are therefore under CFPB protections. As an example, the CFPB recognizes that when a digital marketing provider targets advertisements to users with certain characteristics (even if those characteristics are selected by the financial services provider), the digital marketing provider has jurisdiction as a service provider. I suggest putting it down. Role in distribution and audience selection, including the use of algorithms and data analytics.

CFPB ties UDAAP to discrimination becomes more important for digital marketing firms

While certain areas of the CFPB’s jurisdiction are vague, for example, the CFPB is currently suing over the extent to which the Equal Credit Opportunity Act (ECOA) extends to marketing practices, one area is very clear. Actions to prevent the service provider from committing or engaging with her UDAAP. Specifically, on March 16, 2022, the CFPB decreed that discriminatory conduct, such as engaging in targeted advertising or marketing in a discriminatory manner, constitutes “unfair” practices. So even if the digital marketing firm’s practices aren’t covered by his ECOA, the CFPB can still argue that the firm’s strategy is discriminatory and therefore unfair and violates federal law. . (The Department of Justice recently entered into a settlement under the Fair Housing Act against allegedly discriminatory digital marketing practices, but does not address the ECOA, the latter of which falls within the jurisdiction of the CFPB.)

What do you expect?

Financial services firms have long monitored their marketing efforts for fair lending and UDAAP risk. We have also tried to oversee vendor practices. While the announcement generated headlines about what it means for big tech, there are a number of lead generators and marketing strategy firms that could come under scrutiny based on the CFPB statement. In revealing , CFPB director Rohit Chopra reiterated that state attorneys general can sue under the Consumer Financial Protection Act, urging them to pursue claims against digital marketing firms.

The content of this article is intended to provide a general guide on the subject. You should seek professional advice for your particular situation.