Agency Rule-Making & Guidance

On July 18, the CFPB proposed a new interpretive rule that would characterize earned wage access (“EWA”) products as extensions of credit and subject to the Truth in Lending Act and Regulation Z. Under the interpretive guidance, both the “tipping” function on EWA products, and the “expedited funds delivery fee” would be treated as finance charges, and would require the creditor to make the disclosures required for unsecured extensions of credit under Regulation Z. However, an employer-sponsored program which is provided at no cost to the employee (i.e., without what the CFPB has deemed a “finance charge”) would not require such disclosures.Continue Reading CFPB Proposes Interpretive Rule Characterizing Earned Wage Access Products as Loans

On July 10, the CFPB announced proposed rules for mortgage servicers, aimed at helping homeowners avoid foreclosures. The new rules, which would modify RESPA and Regulation X’s existing mortgage servicing framework, are designed to streamline the process for obtaining mortgage assistance, and incentivize servicers to prioritize borrower aid over foreclosure.Continue Reading CFPB Proposes Revamped RESPA Mortgage Servicing Rules

On July 2, the CFPB released its Summer 2024 Supervisory Highlights, which focused on the servicing and collection of consumer debt. The report shared key findings from recent supervisory examinations of auto and student loan servicing companies and debt collectors. In addition, the report highlighted issues with deposit and prepaid accounts, with a focus on medical credit card practices. Continue Reading Latest CFPB Supervisory Highlights Focuses on Servicing and Debt Collection Practices

On June 25, the CFPB issued its annual fair lending report covering its fair lending activity in 2023. The Bureau noted that in 2023 it undertook 28 fair lending examinations and announced four enforcement actions. It separately referred 18 matters to the Department of Justice. Continue Reading Key Takeaways from the CFPB’s 2023 Fair Lending Report

On June 25, the CFPB released a formal action to extend the compliance deadlines for its Section 1071 small business lending rule (previously discussed here, here, and here). Once issued, the rule was challenged in the United States District Court for the Southern District of Texas and stayed pending the Supreme Court’s decision in CFPB v. CFSA. After the Bureau prevailed at the Supreme Court, the federal court ordered the Bureau to extend the compliance deadline to compensate for the stay. Continue Reading CFPB Extends Compliance Deadline for Section 1071 Rule

On June 28, the United States Supreme Court overturned a decades-old precedent, Chevron v. Natural Resources Defense Council, Inc., 467 U. S. 837, a ruling that instructed judges about when they could defer to federal agencies’ interpretations of law in rulemaking. In Loper Bright Enterprises v. Raimondo, the Court held that the Administrative Procedure Act “requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Continue Reading Supreme Court Strikes Down Chevron: What Now?

On June 24, the OCC, Federal Reserve Board, FDIC, NCUA, CFPB, and FHFA approved a final rule to implement the quality control standards mandated by the Dodd-Frank Act to address the use of artificial intelligence in estimating home values. The Bureau noted that over the years, the real estate and mortgage industry have made use of computer models to estimate a property’s value. As these AI-based models grow in complexity and include more variables, they can produce inaccurate or discriminatory results.Continue Reading Federal Regulators Finalize Rule Enacting Safeguards for AI-Driven Home Valuations

Illinois has become the first state to enact restrictions on credit and debit card interchange fees – commonly known as swipe fees – linked to taxes and gratuities. The Interchange Fee Prohibition Act (the “Act”), embedded as Section 150-10 of the state’s latest revenue bill, signed on June 7 by Governor J.B. Pritzker, aims to accommodate retailers who have long contested the fairness of these fees. The Act forbids card issuers, payment card networks, acquirer banks and payment processors from charging retailers for swipe fees on gratuities and “any use and occupation tax or excise tax” imposed by the State or a local government. The Act will become effective in July 2025.Continue Reading Swipe Fee Showdown: Illinois Passes Novel Payments Law

On June 11, the CFPB announced a proposed rule amending Regulation V, which implements the Fair Credit Reporting Act, to alter the treatment of medical debts in credit reporting. The rule proposes to remove medical bills from most credit reports, disallow the consideration of medical debts in credit decisions, enhance privacy protections, and curtail credit reporting practices that the Bureau deems coercive.Continue Reading CFPB Proposes Rule to Transform Credit Reporting Practices on Medical Debt

On June 3, the CFPB issued its final rule codifying its “repeat offender registry.” The registry will require certain nonbank entities subject to agency or court orders issued in connection with the provision of a consumer financial product or service, to report the existence of such orders to the CFPB’s public registry.Continue Reading CFPB Final Rule Establishes Registry for Violators of Consumer Finance Laws

On June 4, the CFPB issued a circular targeting the deceptive use of fine print in consumer financial contracts to include unlawful or unenforceable terms. In a press release issued the same day, the CFPB stressed that these terms may deceive consumers into believing they have relinquished certain rights and protections, guaranteed to them under existing consumer protection laws.Continue Reading CFPB Circular Targets “Deceptive” Fine Print