Unknown. Consumer financial protection circular

5,280 words·~24 min read·/register/2024/06/21/2024-13581

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2024-06-21.xml --- 89 120 Friday, June 21, 2024 Contents Agriculture Agriculture Department See Food Safety and Inspection Service See Forest Service See Rural Utilities Service Antitrust Division Antitrust Division NOTICES Changes under the National Cooperative Research and Production Act: 1EdTech Consortium, Inc., 52089 2024-13646 Alliance for OpenUSD Series LLC, 52095 2024-13636 America's DataHub Consortium, 52092-52093 2024-13613 APA—The Engineered Wood Assn., 52096 2024-13616 ASTM International, 52092 2024-13657 Biopharmaceutical Manufacturing Preparedness Consortium, 52097 2024-13621 Cable Television Laboratories, Inc., 52096 2024-13656 Customer Experience Hub, 52093-52094 2024-13623 DVD Copy Control Assn., 52094 2024-13628 Information Warfare Research Project Consortium, 52097-52098 2024-13612 Medical CBRN Defense Consortium, 52096 2024-13608 Medical Technology Enterprise Consortium, 52090-52092 2024-13611 Mobile Satellite Services Association, 52089 2024-13647 ODVA, Inc., 52092 2024-13619 Open Source Imaging Consortium, Inc., 52087 2024-13598 R Consortium, Inc., 52090 2024-13629 Rapid Response Partnership Vehicle, 52095-52096 2024-13625 Senior Healthcare Innovation Consortium, 52094 2024-13614 The Institute of Electrical and Electronics Engineers, Inc., 52090 2024-13618 The Open Group, LLC, 52087-52088 2024-13650 TM Forum, A New Jersey Non-Profit Corporation, 52088-52089 2024-13622 UHD Alliance, Inc., 52094-52095 2024-13659 Army Army Department NOTICES Hearings, Meetings, Proceedings, etc.:

Board of Visitors, United States Military Academy, 52031-52032 2024-13688 Consumer Financial Protection Bureau of Consumer Financial Protection RULES Consumer Financial Protection Circular: 2024-03; Unlawful and Unenforceable Contract Terms and Conditions, 51955-51957 2024-13581 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 52030-52031 2024-13634 Census Bureau Census Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:

High-Frequency Surveys Program/Household Pulse Survey, 52021-52022 2024-13668 Civil Rights Civil Rights Commission NOTICES Hearings, Meetings, Proceedings, etc.: Florida Advisory Committee; Cancellation, 52021 2024-13513 North Carolina Advisory Committee, 52018-52020 2024-13514 2024-13516 2024-13518 2024-13520 Pennsylvania Advisory Committee, 52020-52021 2024-13515 Utah Advisory Committee, 52018 2024-13529 Coast Guard Coast Guard RULES Safety Zone: Annual Fireworks Displays and Other Events in the Eighth Coast Guard District Requiring Safety Zones—St.

John the Baptist Independence Day Celebration, 51969 2024-13627 Back River, Baltimore County, MD, 51974-51976 2024-13642 Lake Erie, Mentor (Mentor Headlands), OH, 51969-51972 2024-13781 M/V Dali, Transit to Maryland/Virginia Line, Chesapeake Bay and Patapsco River, Baltimore, MD, 51972-51973 2024-13635 Safety Zones: Recurring Events in Captain of the Port Duluth—City of Bayfield 4th of July Fireworks Display, 51973-51974 2024-13592 Special Local Regulation: Sail Grand Prix; Upper Bay, New York City, NY, 51966-51969 2024-13602 PROPOSED RULES Drawbridge Operations:

Townsend Gut, Southport, ME, 51993-51995 2024-13472 Implementation of Training Requirements for Personnel Serving on United States-flagged Passenger Ships That Carry More Than 12 Passengers on International Voyages, 52324-52354 2024-13455 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 52072-52074 2024-13609 2024-13610 Commerce Commerce Department See Census Bureau See Foreign-Trade Zones Board See Industry and Security Bureau See International Trade Administration See National Oceanic and Atmospheric Administration Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement List;

Additions and Deletions, 52029-52030 2024-13639 Commodity Futures Commodity Futures Trading Commission NOTICES Meetings; Sunshine Act, 52030 2024-13744 2024-13763 Defense Department Defense Department See Army Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 52032-52036 2024-13464 2024-13468 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Acquisition Regulation Part 47: Transportation Requirements, 52051-52052 2024-13679 Hearings, Meetings, Proceedings, etc.:

National Security Education Board, 52033-52034 2024-13637 Non-Foreign Overseas Per Diem Rates; Correction, 52033 2024-13661 Energy Department Energy Department See Federal Energy Regulatory Commission Environmental Protection Environmental Protection Agency RULES Pesticide Tolerance; Exemptions, Petitions, Revocations, etc.: Poly(oxy-1,2-ethanediyl), polymer with 1,2-ethandiol, 2-methyl-1,3-ropanediol, hexanedioic acid, etc. in Pesticide Formulations, 51978-51981 2024-13588 NOTICES Environmental Impact Statements;

Availability, etc., 52039-52040 2024-13596 Federal Aviation Federal Aviation Administration RULES Airspace Designations and Reporting Points: Cincinnati, OH, 51960-51961 2024-13343 Covington, KY, 51959-51960 2024-13344 Dallas-Fort Worth, TX, 51957-51958 2024-13345 Eastern United States, 51961-51963 2024-13339 Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous Amendments, 51963-51966 2024-13506 2024-13507 PROPOSED RULES Airworthiness Directives:

De Havilland Aircraft of Canada Limited (Type Certificate Previously Held by Bombardier, Inc.) Airplanes, 51988-51990 2024-13559 Federal Communications Federal Communications Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 52040-52042 2024-13648 2024-13649 Federal Energy Federal Energy Regulatory Commission NOTICES Combined Filings, 52037 2024-13526 Hearings, Meetings, Proceedings, etc.: Midcontinent Independent System Operator, Inc., Otter Tail Power Co. v.

Midcontinent Independent System Operator, Inc., et al.; Proceeding in Abeyance, 52037-52038 2024-13525 PPL Electric Utilities Corp.; PJM Interconnection, LLC; Proceeding in Abeyance, 52038-52039 2024-13524 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: Lockhart CL ESS I, LLC, 52039 2024-13523 Lockhart CL ESS II, LLC, 52038 2024-13522 Permits; Applications, Issuances, etc.: Otter Tail Power Co., 52036-52037 2024-13521 Federal Highway Federal Highway Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 52200-52203 2024-13512 2024-13527 2024-13531 Final Federal Agency Action: Proposed Transportation Project in Florida, 52201-52202 2024-13591 Federal Reserve Federal Reserve System NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 52042-52050 2024-13798 Change in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 52050 2024-13686 Food and Drug Food and Drug Administration RULES Medicated Feed Mill License;

Veterinary Feed Directive Drugs; Change of Address, 51966 2024-13678 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 52060 2024-13638 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Establishment Registration and Product Listing for Manufacturers of Human Blood and Blood Products and Licensed Devices, 52063-52064 2024-13643 Tobacco Products and Communications, 52055-52057 2024-13644 Guidance: Circumstances That Constitute Delaying, Denying, Limiting, or Refusing a Drug or Device Inspection, 52062-52063 2024-13674 Considerations in Demonstrating Interchangeability With a Reference Product, 52060-52062 2024-13429 Demonstrating Bioequivalence for Type A Medicated Articles Containing Active Pharmaceutical Ingredient(s) Considered To Be Poorly Soluble in Aqueous Media, That Exhibit Little to No Systemic Bioavailability, and Are Locally Acting, 52058-52060 2024-13690 Human User Safety in New and Abbreviated New Animal Drug Applications, 52053-52054 2024-13655 Requests for Nominations:

Nonvoting Industry Representatives on Public Advisory Committees, 52054-52055 2024-13672 Withdrawal of Approval of Drug Application: Sandoz Inc. et al., 52057-52058 2024-13660 SpecGX, LLC et al.; Correction, 52062 2024-13658 Food Safety Food Safety and Inspection Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Foodborne Illness Outbreak Investigation Survey for FSIS Public Health Partners, 52010-52011 2024-13631 Foreign Assets Foreign Assets Control Office NOTICES Sanctions Actions, 52214 2024-13630 Foreign Trade Foreign-Trade Zones Board NOTICES Proposed Production Activity:

Catalent Pharma Solutions, LLC, Foreign-Trade Zone 29, Winchester, KY, 52022 2024-13534 Forest Forest Service NOTICES Hearings, Meetings, Proceedings, etc.: Idaho Panhandle Resource Advisory Committee, 52011-52012 2024-13477 General Services General Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Acquisition Regulation; Identification of Products With Environmental Attributes, 52052-52053 2024-13682 Federal Acquisition Regulation Part 47:

Transportation Requirements, 52051-52052 2024-13679 Health and Human Health and Human Services Department See Food and Drug Administration See Health Resources and Services Administration See National Institutes of Health Health Resources Health Resources and Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals Stakeholder Gatherings, 52067-52068 2024-13666 Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Black Lung Clinics Program Performance Measures, 52065 2024-13653 Rural Health Care Coordination Program Performance Improvement Measures, 52068-52069 2024-13624 Rural Health Care Services Outreach Program Measures, 52069-52070 2024-13665 Small Health Care Provider Quality Improvement Program, 52066-52067 2024-13620 Homeland Homeland Security Department See Coast Guard Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Public Housing Agency 5-Year and Annual Plan, 52074-52076 2024-13582 Indian Affairs Indian Affairs Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Fiscal Year 2025 Expirations Under the Paperwork Reduction Act, 52076-52081 2024-13511 Industry Industry and Security Bureau NOTICES Denial of Export Privileges: USGoBuy, LLC, 52022-52024 2024-13508 Institute of Museum and Library Services Institute of Museum and Library Services NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: 2025-2027 IMLS Museums Empowered; Funding Opportunity, 52102 2024-13578 2025-2027 Inspire! Grants for Small Museums; Funding Opportunity, 52101-52102 2024-13579 2025-2027 Museum Grants for American Latino History and Culture; Funding Opportunity, 52103 2024-13577 Interior Interior Department See Indian Affairs Bureau See Land Management Bureau See National Park Service See Ocean Energy Management Bureau Internal Revenue Internal Revenue Service NOTICES Privacy Act;

Systems of Records, 52214-52216 2024-13669 International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Alloy and Certain Carbon Steel Threaded Rod From the People's Republic of China, 52026-52028 2024-13555 Certain Corrosion Inhibitors From the People's Republic of China, 52024-52026 2024-13594 Large Top Mount Combination Refrigerator-Freezers From Thailand, 52024 2024-13593 Hearings, Meetings, Proceedings, etc.:

Environmental Technologies Trade Advisory Committee, 52026 2024-13675 Justice Department Justice Department See Antitrust Division NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Office of the Chief Administrative Hearing Officer E-Filing Portal, 52098-52099 2024-13633 Labor Department Labor Department See Veterans Employment and Training Service Land Land Management Bureau NOTICES Environmental Impact Statements; Availability, etc.: Colorado River Valley Field Office and Grand Junction Field Office Resource Management Plans, Colorado, 52082-52083 2024-13452 Proposed Resource Management Plan, Redding and Arcata Field Offices Northwest California Integrated Resource Management Plan, California, 52083-52085 2024-13463 Maritime Maritime Administration NOTICES Coastwise Endorsement Eligibility Determination for a Foreign-Built Vessel:

Daniela (Motor), 52205-52206 2024-13603 Dream Catcher (Sail), 52208-52209 2024-13604 Coastwise Endorsement Eligibility Determination for a Foreign-Built Vessel: Kairos (Motor), 52207-52208 2024-13605 Coastwise Endorsement Eligibility Determination for a Foreign-Built Vessel: Rod Bender (Motor), 52206-52207 2024-13606 Valentine (Motor), 52203-52204 2024-13607 Hearings, Meetings, Proceedings, etc.: U.S. Maritime Transportation System National Advisory Committee, 52204-52205 2024-13684 NASA National Aeronautics and Space Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Federal Acquisition Regulation Part 47: Transportation Requirements, 52051-52052 2024-13679 National Foundation National Foundation on the Arts and the Humanities See Institute of Museum and Library Services National Institute National Institutes of Health NOTICES Hearings, Meetings, Proceedings, etc.: Center for Scientific Review, 52071-52072 2024-13557 National Institute of Allergy and Infectious Diseases, 52071 2024-13558 National Institute of Neurological Disorders and Stroke, 52070 2024-13576 National Institute on Aging, 52070-52071 2024-13556 National Oceanic National Oceanic and Atmospheric Administration RULES Fisheries of the Northeastern United States:

Summer Flounder Fishery; Quota Transfer From Virginia to Rhode Island, 51986-51987 2024-13533 Taking or Importing of Marine Mammals: New England Wind Project, Offshore Massachusetts, 52222-52321 2024-12085 PROPOSED RULES Fisheries off West Coast States: Coastal Pelagic Species Fisheries; Annual Specifications; 2024-2025 Annual Specifications and Management Measures for Pacific Sardine, 52005-52009 2024-13530 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Commercial Operator's Annual Report, 52028 2024-13583 Hearings, Meetings, Proceedings, etc.: Mid-Atlantic Fishery Management Council, 52028-52029 2024-13662 2024-13663 2024-13664 National Park National Park Service NOTICES National Register of Historic Places: Pending Nominations and Related Actions, 52085-52086 2024-13685 National Science National Science Foundation NOTICES Hearings, Meetings, Proceedings, etc.: Proposal Review Panel for Materials Research, 52103-52104 2024-13517 2024-13519 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Reactor Site Criteria, 52104-52105 2024-13553 Ocean Energy Management Ocean Energy Management Bureau NOTICES Environmental Assessments; Availability, etc.: Commercial Wind Lease Issuance, Site Characterization Activities, and Site Assessment Activities on the Atlantic Outer Continental Shelf in the Gulf of Maine Offshore the States of Maine and New Hampshire and the Commonwealth of Massachusetts, 52086-52087 2024-13687 Postal Regulatory Postal Regulatory Commission NOTICES New Postal Products, 52105-52106 2024-13654 Postal Service Postal Service RULES Customs Declaration Exceptions, 51976-51978 2024-13425 NOTICES Product Change:

Priority Mail and USPS Ground Advantage Negotiated Service Agreement, 52106-52108 2024-13571 2024-13572 2024-13573 2024-13574 Priority Mail Express and Ground Advantage Negotiated Service Agreement, 52108 2024-13575 Priority Mail Express, Priority Mail, and Ground Advantage Negotiated Service Agreement, 52106-52109 2024-13561 2024-13562 2024-13563 2024-13567 2024-13568 2024-13569 2024-13570 Priority Mail Express, Priority Mail, and USPS Ground Advantage Negotiated Service Agreement, 52106-52108 2024-13564 2024-13565 2024-13566 Presidential Documents Presidential Documents EXECUTIVE ORDERS Committees;

Establishment, Renewal, Termination, etc.: White House Council on Supply Chain Resilience (EO 14123), 51949-51953 2024-13810 Railroad Retirement Railroad Retirement Board PROPOSED RULES Evidence of Disability, 51990-51993 2024-13554 Rural Utilities Rural Utilities Service NOTICES Funding Opportunity: Broadband Technical Assistance Program for Fiscal Year 2024, 52012-52018 2024-13691 Securities Securities and Exchange Commission NOTICES Self-Regulatory Organizations; Proposed Rule Changes:

Cboe BYX Exchange, Inc., 52132-52138, 52148-52152 2024-13540 2024-13544 Cboe BZX Exchange, Inc., 52165-52172 2024-13543 Cboe C2 Exchange, Inc., 52124-52127 2024-13542 Cboe EDGA Exchange, Inc., 52118-52124, 52161-52163 2024-13537 2024-13551 Cboe EDGX Exchange, Inc., 52109-52117 2024-13536 2024-13545 ICE Clear Credit LLC, 52138-52141 2024-13538 MIAX PEARL, LLC, 52141-52147 2024-13541 Nasdaq GEMX, LLC, 52164-52165 2024-13539 New York Stock Exchange LLC, 52185-52190 2024-13546 NYSE American LLC, 52156-52161, 52182-52185 2024-13535 2024-13547 NYSE Arca, Inc., 52153-52156, 52172-52177 2024-13548 2024-13552 NYSE Chicago, Inc., 52127-52132 2024-13549 NYSE National, Inc., 52177-52182 2024-13550 Small Business Small Business Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 52193 2024-13683 Disaster Declaration: Arkansas, 52192-52193 2024-13585 Arkansas; Public Assistance Only, 52191 2024-13586 Iowa, 52190-52191 2024-13681 Oklahoma, 52191-52192 2024-13673 Oklahoma; Public Assistance Only, 52192 2024-13680 Texas; Public Assistance Only, 52192 2024-13595 Surface Transportation Surface Transportation Board NOTICES Exemption: Acquisition and Operation; Bay Colony Railroad Corp., Norfolk County, MA; Massachusetts Coastal Railroad, LLC, Bay Colony Railroad Corp. and Massachusetts Bay Transportation Authority, 52194-52198 2024-13671 Intra-Corporate Family;

Koch, Inc.; Old Augusta Railroad, LLC; Blue Rapids Railway Co. LLC; Moscow Camden and San Augustine Railroad LLC; and KM Railways, LLC, 52193-52194 2024-13645 Susquehanna Susquehanna River Basin Commission NOTICES Hearings, Meetings, Proceedings, etc.: Actions Taken, 52198-52199 2024-13652 Projects Approved: Consumptive Uses of Water, 52199-52200 2024-13651 Transportation Department Transportation Department See Federal Aviation Administration See Federal Highway Administration See Maritime Administration RULES Procedures for Transportation Workplace Drug and Alcohol Testing Programs, 51981-51986 2024-12747 2024-12749 PROPOSED RULES Procedures for Transportation Workplace Drug and Alcohol Testing Programs, 52002-52004 2024-12748 NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Online Complaint Form and Related Uses of a Modernized Aviation Consumer Protection Information Technology System, 52209-52213 2024-13580 Treasury Treasury Department See Foreign Assets Control Office See Internal Revenue Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 52217-52218 2024-13689 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Compliance Assurance Process Application and Associated Forms, 52218 2024-13589 Inflation Reduction Act Storytelling Educational Program, 52216-52217 2024-13600 Veteran Affairs Veterans Affairs Department PROPOSED RULES Loan Guaranty:

Adjustable Rate Mortgages, Hybrid Adjustable Rate Mortgages, and Temporary Buydown Agreements, 51995-52002 2024-13389 NOTICES Hearings, Meetings, Proceedings, etc.: Rehabilitation Research and Development Service Scientific Merit Review Board, 52218-52219 2024-13528 Veterans Employment Veterans Employment and Training Service NOTICES Request for Information: Black Veterans and Good Jobs, 52099-52101 2024-13509 Separate Parts In This Issue Part II Commerce Department, National Oceanic and Atmospheric Administration, 52222-52321 2024-12085 Part III Homeland Security Department, Coast Guard, 52324-52354 2024-13455 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription. 89 120 Friday, June 21, 2024 Rules and Regulations CONSUMER FINANCIAL PROTECTION BUREAU 12 CFR Chapter X Consumer Financial Protection Circular 2024-03: Unlawful and Unenforceable Contract Terms and Conditions AGENCY: Consumer Financial Protection Bureau.

ACTION: Consumer financial protection circular. SUMMARY: The Consumer Financial Protection Bureau

(CFPB)has issued Consumer Financial Protection Circular 2024-03, titled, “Unlawful and Unenforceable Contract Terms and Conditions.” In this circular, the CFPB responds to the question, “Can persons that include unlawful or unenforceable terms and conditions in contracts for consumer financial products and services violate the prohibition on deceptive acts or practices in the Consumer Financial Protection Act (CFPA)?” DATES: The CFPB released this circular on its website on June 4, 2024. ADDRESSES: Enforcers, and the broader public, can provide feedback and comments to *Circulars@cfpb.gov.* FOR FURTHER INFORMATION CONTACT: George Karithanom, Regulatory Implementation & Guidance Program Analyst, Office of Regulations, at 202-435-7700 or at: *https://reginquiries.consumerfinance.gov/.* If you require this document in an alternative electronic format, please contact *CFPB_Accessibility@cfpb.gov.* SUPPLEMENTARY INFORMATION: Question Presented Can persons that include unlawful or unenforceable terms and conditions in contracts for consumer financial products and services violate the prohibition on deceptive acts or practices in the Consumer Financial Protection Act (CFPA)? Response Yes. “Covered persons” and “service providers” must comply with the prohibition on deceptive acts or practices in the CFPA. 1 The inclusion of certain terms in contracts for consumer financial products or services may violate the prohibition when applicable Federal or State law renders such contractual terms, including those that purport to waive consumer rights, unlawful or unenforceable. 1 12 U.S.C. 5481(6), (26), 5531, 5536. For simplicity, the remainder of this Circular refers to covered persons and service providers as “covered persons.” Background on Unlawful and Unenforceable Contract Terms Many Federal laws—including statutes enforced by the CFPB—render unlawful or unenforceable various contract terms in certain contexts. For example, as highlighted in a recent CFPB compliance bulletin, 2 the Consumer Review Fairness Act of 2016 generally prohibits the use of form contracts that limit how consumers communicate their reviews, assessments, or similar analysis of the sale of goods or services, and invalidates these types of contract terms and conditions. 3 As another example, Regulation Z, which implements the Truth in Lending Act (TILA), prohibits the inclusion in a residential mortgage loan or open-ended consumer credit plan secured by the principal dwelling of terms requiring arbitration or any other nonjudicial procedure as the method for resolving any controversy or settling claims arising out of the transaction. 4 The Electronic Fund Transfer Act

(EFTA)prohibits contract terms that contain a “waiver of any right conferred” by EFTA and prohibits waivers of any “cause of action” under EFTA. 5 And the Military Lending Act and its implementing regulations generally prohibit terms in certain consumer credit contracts that require servicemembers and their dependents to “waive the covered borrower's right to legal recourse under any otherwise applicable provision of State or Federal law . . . .” 6 2 CFPB, *Bulletin 2022-05: Unfair and Deceptive Acts or Practices That Impede Consumer Reviews* (Mar. 22, 2022), *https://files.consumerfinance.gov/f/documents/cfpb_bulletin-2022-05_unfair-deceptive-acts-practices-impede-consumer-reviews.pdf.* 3 15 U.S.C. 45b. 4 12 CFR 1026.36(h)(1), implementing 15 U.S.C. 1639c(e)(1). 5 15 U.S.C. 1693l; *see also, e.g., Choice Money Transfer, Inc. d/b/a Small World Money Transfer,* ¶¶ 79-83, File No. 2022-CFPB-0009 (Oct. 4, 2022) (consent order) (finding remittance transfer provider violated section 1693l by including waiver of consumer rights in disclosure consumers were required to sign); *Chime, Inc. d/b/a Sendwave,* ¶¶ 26-29, File No. 2023-CFPB-0012 (Oct. 17, 2023) (consent order) (finding violation of section 1693l where remittance transfer provider required consumers to sign a remittance services agreement containing language limiting consumers' damages and claims for costs and attorney fees, contrary to the provisions for defendant liability contained in section 1693m(a)(3)). 6 32 CFR part 232.8(b), implementing 10 U.S.C. 987(e)(2). In addition to express prohibitions like these, a recent Federal district court decision held that the Servicemembers Civil Relief Act

(SCRA)renders unenforceable provisions in contracts with servicemembers that purport to waive their right to participate in class actions to enforce the SCRA. 7 The Federal Trade Commission also administers laws that forbid certain contractual waivers. 8 And certain State laws similarly prohibit or restrict the use of waivers in consumer contracts. 9 7 *Espin* v. *Citibank, N.A.,* No. 5:22-CV-383-BO-RN, 2023 WL 6449909, at *3 (E.D.N.C. Sept. 29, 2023) (denying defendant's motion to compel arbitration and observing that the SCRA was “amended to codify the unwaivable right of servicemembers to bring and participate in class actions, `notwithstanding any previous agreement to the contrary' ”) (quoting 50 U.S.C. 4042(a)). 8 *See* 16 CFR part 442(a)(2) (FTC's 1984 Credit Practices Rule, prohibiting the use of contract terms purporting to waive a consumer's State law right to block creditors from seizing personal or real property of the consumer in which they do not hold security interests). The FTC also has interpreted section 604(b)(2)(A) of the Fair Credit Reporting Act

(FCRA)to prohibit the inclusion of a waiver of consumer rights in a disclosure form required under that section, observing that “it is a general principle of law that benefits provided to citizens by federal statute generally may not be waived by private agreement unless Congress intended such a result.” *FTC, Division of Credit Practices, Staff Opinion Letter* (June 12, 1998), 1998 WL 34323756, at *1 (citing *Brooklyn Savings Bank* v. *O'Neill,* 324 U.S. 697 (1945)). In addition, while not an express prohibition on waivers, the FTC's *Preservation of Consumers' Claims and Defenses* rule, commonly known as the “Holder Rule” and also enforced by the CFPB, requires sellers of goods or services to consumers to include a provision in their finance contracts that ensures that if another person holds the loan or lease a consumer uses to finance acquisition of a good or service from a seller or lessor, then the holder is subject to the same consumer rights and defenses that the consumer had with respect to the seller or lessor, thereby emphasizing the importance of preserving consumer rights. 16 CFR part 433. 9 For instance, the California Consumer Privacy Act affords consumers certain rights to know how their information will be used, instructs businesses not to sell consumers' personal information, and deems “void and unenforceable” any contractual provision “that purports to waive or limit in any way rights under this title, including, but not limited to, any right to a remedy or means of enforcement.” *See generally* Cal. Civ. Code sec. 1798.100 *et seq.* described at *https://oag.ca.gov/privacy/ccpa;* Cal. Civ. Code sec. 1798.192. Further, certain State laws, including those of California, Illinois, Kansas, and Tennessee, contain outright prohibitions of waivers of legal protections in general consumer protection laws. *See* Cal. Civ. Code. sec. 1751 (barring waivers of protections under California Consumers Legal Remedies Act); Ill. St. Ch. 815 sec. 505(10c), Waiver or modification (barring waiver or modification of protections under consumer fraud and deceptive practices statute); Kan. Stat. 50-625(a), Waiver (generally prohibiting waivers of rights or benefits under the Kansas Consumer Protection Act, unless otherwise specified in the statute); Tenn. Stat. 47-18-113(a) (generally prohibiting waivers “by contract, agreement, or otherwise” of provisions of the Tennessee Consumer Protection Act of 1977). Analysis The CFPB is issuing this Circular to emphasize that covered persons who include unlawful or unenforceable terms in their consumer contracts may violate the CFPA's prohibition on deceptive acts or practices. 10 10 Covered persons also should comply with other consumer protection laws enforceable by the CFPB that may apply to their conduct, including but not limited to EFTA, Regulation E; RESPA, Regulation X; and TILA, Regulation Z. Covered persons may violate the CFPA's prohibition on deceptive acts or practices if they include terms, including waiver provisions, in their consumer contracts that are rendered unlawful or unenforceable by Federal or State law. Under the CFPA, a representation or omission is deceptive if it is likely to mislead a reasonable consumer and is material. A representation is “material” if it “involves information that is important to consumers and, hence, likely to affect their choice of, or conduct regarding, a product.” 11 A contractual provision stating that a consumer agrees not to exercise a legal right is likely to affect a consumer's willingness to attempt to exercise that right in the event of a dispute. Moreover, certain categories of information, including express representations, are presumptively material. 12 11 *Novartis Corp.* v. *FTC,* 223 F.3d 783, 786 (D.C. Cir. 2000) (quoting *In re Cliffdale Assocs., Inc.,* 103 F.T.C. 110, 165 (1984)) (emphasis added). 12 *See, e.g., CFPB* v. *Chou Team Realty LLC,* Case No. 8:20-cv-00043-SB-ADS, 2021 WL 4077110, at *4 (C.D. Cal. Aug. 10, 2021) (citing *FTC* v. *Pantron I Corp.,* 33 F.3d 1088, 1095-96 (9th Cir. 1994)); *FTC* v. *NCH, Inc.,* Civ.A. No. CV-S-94-138LDG, 1995 WL 623260, at *8 (D. Nev. May 25, 1995) (“express representations that are shown to be false are presumptively material”) (citing *Cliffdale Assocs.,* 103 F.T.C. at 168, 182). In the recent compliance bulletin noted above, the CFPB reminded covered persons that they could be liable under the CFPA if they deceive consumers using form contract restrictions on consumer reviews that are unenforceable. 13 The CFPB explained that “including an unenforceable material term in a consumer contract is deceptive, because it misleads consumers into believing the contract term is enforceable,” and that “disclaimers in a contract such as `subject to applicable law' do not cure the misrepresentation caused by the inclusion of an unenforceable contract term.” 14 Similarly, qualifying a provision that purports to waive a consumer right with “except where unenforceable” is unlikely to cure the provision's misleading or material nature. Neither do disclaimers that are issued after the fact. 15 13 CFPB, *Bulletin 2022-05: Unfair and Deceptive Acts or Practices That Impede Consumer Reviews* (Mar. 22, 2022), *https://files.consumerfinance.gov/f/documents/cfpb_bulletin-2022-05_unfair-deceptive-acts-practices-impede-consumer-reviews.pdf* (Bulletin 2022-05). 14 *Id.* at 4-5; *cf. Ruth* v. *Triumph P'ships,* 577 F.3d 790, 801-02 (7th Cir. 2009) (“To threaten to take some action `to the extent permitted by law[ ]' . . . is to imply that, under some set of circumstances and to some extent, the law actually permits that action to be taken.”). 15 Bulletin 2022-05 at 5 (citing *FTC* v. *IAB Marketing Assocs., LP,* 746 F.3d 1228, 1233 (11th Cir. 2014)). CFPB supervisory examiners have identified several violations of the CFPA's prohibition on deception stemming from covered persons' use of unlawful or unenforceable contract terms and conditions. 16 In addition, in several prior enforcement matters, the CFPB has found covered persons to have violated the CFPA by including in contracts for consumer financial products or services terms that are unlawful or unenforceable under Federal or State law, such as waivers that are prohibited by Federal or State law. For example, the CFPB found that a respondent bank engaged in a deceptive practice under the CFPA when it represented to consumers that because they signed a deposit agreement including broad language directing the bank not to contest legal process, consumers had waived their right to hold the bank liable for improperly responding to garnishment notices; in fact, regardless of the language in the account agreement, consumers had the right to challenge the garnishments. 17 In another matter, the CFPB found that a respondent auto loan servicer violated the CFPA's deception prohibition when it used loan extension agreements or written confirmations that included language that created the net misimpression that consumers could not exercise bankruptcy protection rights, which was false. 18 In fact, an agreement to waive an individual's right to file for bankruptcy is void as against public policy, 19 rendering terms that purport to waive such right generally unenforceable. The CFPB found in a different matter that a respondent non-bank remittance transfer provider engaged in a deceptive act or practice in violation of the CFPA when it made misleading statements in disclosures purporting to limit consumers' error resolution rights, in violation of EFTA and the Remittance Rule. 20 And, in a recent report, the CFPB highlighted that certain student tuition payment plan agreements and financial responsibility agreements “include terms and conditions that purport to waive consumers' legal protections, limit how consumers enforce their rights, or misrepresent the rights or protections available to consumers under existing law.” 21 Some of these terms and conditions, such as purported waivers of the right to retain counsel and the right to seek discharge in bankruptcy proceedings, are likely unenforceable and thus similarly raise deception risk. 16 *See Supervisory Highlights: Summer 2015,* at 15, available at *https://files.consumerfinance.gov/f/201506_cfpb_supervisory-highlights.pdf* (deceptive waivers of borrowers' rights in mortgage loan agreements that were unenforceable under Regulation Z, implementing TILA); *Supervisory Highlights: Fall 2015,* at 17, available at *https://files.consumerfinance.gov/f/201510_cfpb_supervisory-highlights.pdf* (same); *Supervisory Highlights: Summer 2017,* 82 FR 48703, 48708 (Oct. 19, 2017) (deceptive waivers of borrowers' rights in loss mitigation agreements that were unenforceable under Regulation Z, implementing TILA); *Supervisory Highlights, Issue 24, Summer 2021,* 86 FR 36108, 36117 (July 8, 2021) (deceptive waivers of rights in security deed riders that were unenforceable under Regulation X, implementing the Real Estate Settlement Procedures Act); *Supervisory Highlights, Issue 28, Fall 2022,* 87 FR 72449, 72455 (Nov. 25, 2022) (deceptive waiver of borrowers' rights in loan security agreements that was unenforceable under Regulation Z, implementing TILA). 17 *In re Bank of America, N.A.* (2022-CFPB-0002), *https://www.consumerfinance.gov/enforcement/actions/bank-of-america-na/.* 18 *In re Nissan Motor Acceptance Corp.* (2020-BCFP-0017), *https://www.consumerfinance.gov/policy-compliance/enforcement/actions/nissan-motor-acceptance-corporation/.* 19 *See* 11 U.S.C. 524(a) (providing that a bankruptcy discharge under title 11 voids judgments and operates as an injunction against the commencement or continuation of an action “whether or not discharge of such debt is waived”). 20 *In re Trans-Fast Remittance LLC, also d/b/a New York Bay Remittance* (2020-BCFP-0010), *https://www.consumerfinance.gov/policy-compliance/enforcement/actions/trans-fast-remittance-llc/.* 21 CFPB, *Tuition Payment Plans in Higher Education* (Sept. 2023), at 29-30, available at *https://files.consumerfinance.gov/f/documents/cfpb_tuition_payment_plan_report_2023-09.pdf.* As these examples demonstrate, the inclusion of unlawful or unenforceable terms and conditions in consumer contracts is likely to mislead a reasonable consumer into believing that the terms are lawful and/or enforceable, when in fact they are not. Further, the representations made by the presence of such terms are often material, presumptively so when they are made expressly. In particular, consumers are unlikely to be aware of the existence of laws that render the terms or conditions at issue unlawful or unenforceable, so in the event of a dispute, they are likely to conclude they lawfully agreed to waive their legal rights or protections after reviewing the contract on their own or when covered persons point out the existence of these contractual terms and conditions. Deceptive acts and practices such as these pose risk to consumers, whose rights are undermined as a result, and distort markets to the disadvantage of covered persons who abide by the law by including only lawful terms and conditions in their consumer contracts. Thus, the inclusion of unlawful or unenforceable terms in consumer contracts, including unlawful or unenforceable waiver provisions, may violate the CFPA's prohibition on deceptive acts or practices. About Consumer Financial Protection Circulars *Consumer Financial Protection Circulars* are issued to all parties with authority to enforce Federal consumer financial law. The CFPB is the principal Federal regulator responsible for administering Federal consumer financial law, *see* 12 U.S.C. 5511, including the Consumer Financial Protection Act's prohibition on unfair, deceptive, and abusive acts or practices, 12 U.S.C. 5536(a)(1)(B), and 18 other “enumerated consumer laws,” 12 U.S.C. 5481(12). However, these laws are also enforced by State attorneys general and State regulators, 12 U.S.C. 5552, and prudential regulators including the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the National Credit Union Administration. *See, e.g.,* 12 U.S.C. 5516(d), 5581(c)(2) (exclusive enforcement authority for banks and credit unions with $10 billion or less in assets). Some Federal consumer financial laws are also enforceable by other Federal agencies, including the Department of Justice and the Federal Trade Commission, the Farm Credit Administration, the Department of Transportation, and the Department of Agriculture. In addition, some of these laws provide for private enforcement. *Consumer Financial Protection Circulars* are intended to promote consistency in approach across the various enforcement agencies and parties, pursuant to the CFPB's statutory objective to ensure Federal consumer financial law is enforced consistently. 12 U.S.C. 5511(b)(4). *Consumer Financial Protection Circulars* are also intended to provide transparency to partner agencies regarding the CFPB's intended approach when cooperating in enforcement actions. *See, e.g.,* 12 U.S.C. 5552(b) (consultation with CFPB by State attorneys general and regulators); 12 U.S.C. 5562(a) (joint investigatory work between CFPB and other agencies). *Consumer Financial Protection Circulars* are general statements of policy under the Administrative Procedure Act. 5 U.S.C. 553(b). They provide background information about applicable law, articulate considerations relevant to the Bureau's exercise of its authorities, and, in the interest of maintaining consistency, advise other parties with authority to enforce Federal consumer financial law. They do not restrict the Bureau's exercise of its authorities, impose any legal requirements on external parties, or create or confer any rights on external parties that could be enforceable in any administrative or civil proceeding. The CFPB Director is instructing CFPB staff as described herein, and the CFPB will then make final decisions on individual matters based on an assessment of the factual record, applicable law, and factors relevant to prosecutorial discretion. Rohit Chopra, Director, Consumer Financial Protection Bureau. [FR Doc. 2024-13581 Filed 6-20-24; 8:45 am]

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