Agency Rule-Making & Guidance

On February 29, the CFPB issued a circular warning digital comparison-shopping websites and lead generators that practices that steer customers to certain financial products or services based on compensation received from companies that sell such financial products or services can be an abusive act or practice in violation of the Consumer Financial Protection Act. The Bureau’s guidance will have a major impact on comparison-shopping websites for mortgage, credit cards, and short-term installment lending, among others.Continue Reading The CFPB Takes Aim at Digital Comparison Shopping Websites and Lead Generators

On February 22, California Attorney General Rob Bonta sent letters to 197 state-charted banks and credit unions warning them that certain fees they charge may constitute “unfair” business practices under California’s Unfair Competition Law and the federal Consumer Financial Protection Act. Bonta encouraged the financial institutions to review their policies and procedures to ensure consumers were not being assessed these fees.Continue Reading California AG Warns State-Chartered Banks and Credit Unions on Fees

On February 16, the CFPB issued revised rules updating its internal supervisory appeals process for institutions seeking to appeal a compliance rating or an adverse material finding. The updated rules open up new avenues for financial institutions to challenge supervisory evaluations and reflect a significant evolution from its 2015 updatesContinue Reading CFPB’s Enhanced Supervisory Appeals Process: A Potentially Beneficial Shift for Financial Institutions

In a move to bridge significant data gaps identified through its February 2023 Auto Finance Data Pilot where it sent information requests to nine large auto lenders about their lending portfolios, the Consumer Financial Protection Bureau is requesting comments for the collection of additional auto financing data. As with its prior requests, the Bureau is issuing these orders under its market monitoring authority which allows it to “gather information from time to time regarding the organization, business conduct, markets, and activities of covered persons and service providers.” 12 U.S.C. C. § 5512(c)(1) & (4). Compliance with the requests is mandatory.Continue Reading CFPB Ramps Up Auto Finance Scrutiny: A Look at the New Data Collection Initiative

On January 11, 2024, an administrative law judge for the NLRB issued an opinion holding that the employment agreement used by a major mortgage lender for all of its approximately 6,000 employees violates the National Labor Relations Act (NLRA). The mortgage lender’s standard employment contract included provisions that: 1) restricted disclosure of confidential information; 2) governed the use and return of company property, information, and communications; and 3) required that certain disputes be resolved through arbitration. Many of these provisions are common in employment agreements between lenders and their employees. Nevertheless, the ALJ found that parts of these provisions violated the NLRA because they had a reasonable tendency to interfere with, restrain, or coerce an employee contemplating engaging in activity protected by the statute.Continue Reading NLRB Finds Common Provisions in Mortgage Lender Employment Contract Illegal

On February 5, several trade groups, including the American Bankers Association, the Independent Community Bankers of America, and the U.S. Chamber of Commerce, filed suit against the Federal Reserve Board, the FDIC, and the OCC accusing the regulators of exceeding their authority under federal law when promulgating new rules under the Community Reinvestment Act (CRA). Continue Reading Bank Groups Sue to Overturn New Community Lending Rules

On January 11, the CFPB issued two advisory opinions providing guidance to consumer reporting agencies (CRAs) on the Bureau’s views on FCRA compliance obligations with respect to background check reports and credit file disclosures. Continue Reading CFPB Continues Focus on Credit Reporting with Guidance on FCRA Compliance

On December 4, Judge R. Gary Klausner of the U.S. District Court for the Central District of California granted summary judgment to California’s DFPI upholding the recently adopted commercial financing disclosure regulations related to the implementation of SB 1235 (we blogged about the rule here).  The regulations require small business financing providers to disclose key metrics to small businesses to help them understand potential financing options, including the amount of funding provided, APR, finance charge, and payment amounts. The plaintiffs in this latest challenge – a trade association of small business finance companies – asserted that the disclosure requirements violated plaintiffs’ free speech rights under the First Amendment and that the disclosures were preempted by the Truth in Lending Act (TILA).Continue Reading Federal Judge Upholds California’s Small-business Lending Disclosures