This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Trading Off Regulatory Misfortune: Street Whispers

Stocks in this article: COF DFS

NEW YORK ( TheStreet) -- The Consumer Financial Protection Bureau has set quite a precedent with its first enforcement action against Capital One (COF), and investors could see an opportunity if and when the regulator takes action against another credit card lender.

The CFPB is celebrating its one-year anniversary as a unique agency within the Federal Reserve, that actually sets its own budget. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act -- signed into law by President Obama in July 2010 -- the CFPB is charged to "help consumer financial markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives."

The CFPB's first regulator enforcement action on July 18 showed that the Bureau meant business, when it ordered Capital One to refund $140 million to two million credit card customers and pay an additional fine of $25 million for failing to properly monitor third party vendors' sales of additional services to customers, including "credit protection" and "Credit monitoring" services.

Capital One said it was setting aside $150 million for the refunds, and its main subsidiary Capital One Bank (USA), NA, agreed to an additional $35 million penalty from the Office of the Comptroller of the Currency, making for a total tab of $210 million.

"It is a huge amount of money," says Linda Goldstein -- a partner with Manatt, Phelps and Phillips, chairing the firm's Advertising, Marketing & Media division -- who also adds that the CFPB's agreement with Capita One suggests "on its face that the Bureau was not willing to engage in much negotiation on consumer redress."

Goldstein adds "we're going to see more of this for sure," and that "any financial institution marketing these services wants to take a hard look at complaint rates charge-back rates, the marketing materials and putting an affirmative monitoring program in place."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,088.69 +58.48 0.32%
S&P 500 2,091.77 +9.89 0.48%
NASDAQ 4,812.5520 +39.08 0.82%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs