CFPB Seeks to Stop Financial Companies From ‘Weaponizing’ Fine Print

The Consumer Financial Protection Bureau (CFPB) said Monday (Jan. 13) that it aims to stop financial companies from using fine print in contracts that results in customers waiving their legal rights or free speech.

The regulator said this in a Monday press release announcing a proposed rule focused on this issue.

“To access the American financial system, people should not be forced into forfeiting rights enshrined in law or our Constitution,” CFPB Director Rohit Chopra said in the release. “Companies should not weaponize fine print to deplatform or purge people from the financial system.”

The proposed rule will ensure consumer finance contracts focus on a deal, not taking away people’s rights, according to the release.

Specifically, it will ensure that companies cannot use contracts to opt out of statutes passed by Congress or state legislatures; cannot fine, sue or deplatform consumers based on their comments, reviews, or political or religious views; cannot unilaterally update contracts in the company’s favor; and cannot take a consumer’s property without judicial due process or oversight, per the release.

The CFPB proposed this rule after seeing that companies have been adding clauses limiting consumers’ rights for decades and that the fine print has grown increasingly intrusive over time, “impinging on fundamental freedoms,” the release said.

Comments on the proposed rule will be accepted through April 1, according to the release.

The CFPB said in a June press release that financial institutions may be violating the law when they hide “unlawful or unenforceable terms” in the fine print of contracts.

“Companies use this fine print tactic to try to trick consumers into believing they have given up certain legal rights or protections,” the release said. “When financial institutions take these types of actions, they risk violating the Consumer Financial Protection Act.”

In January 2023, the CFPB said it wanted to take a closer look at nonbanks’ terms and conditions, adding that many form contracts are lengthy, include terms and conditions that try to take away consumer protections, and mislead consumers into thinking those terms and conditions are legally enforceable.

The regulator added that consumers often feel they don’t have a choice but to accept the terms and conditions.