Agency Rule-Making and Guidance

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On March 7, the OCC issued Interpretive Letter 1183 and an accompanying statement affirming prior guidance regarding whether national banks and federal savings associations may engage in cryptocurrency-related activities, including (i) providing custody services for depositors’ crypto assets, (ii) holding stablecoin “reserves,” (iii) facilitating stablecoin payments, and (iv) performing payment verification activities on blockchain networks. Importantly, the letter also rescinded the OCC’s Interpretive Letter 1179, which required banks to obtain written supervisory non-objection before engaging in these cryptocurrency activities.Continue Reading OCC Clarifies Banks’ Role in Cryptocurrency Activities

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 updates. Continue Reading CFPB’s Enhanced Supervisory Appeals Process: A Potentially Beneficial Shift for Financial Institutions

Two weeks after the DFPI set a Dec. 9 effective date for its long-threatened commercial financing disclosure requirement (we discussed these regulations in a previous bog, here), the DFPI issued proposed commercial UDAAP and annual reporting regulations likely impacting many of the same companies. Specifically, the proposed regulations would apply to providers of commercial financing or other financial products and services to small businesses, nonprofits, and family farms, and would (i) expand the DFPI’s UDAAP authority, and (2) impose annual reporting requirements on covered providers (we briefly discussed these proposed regulations in a previous blog post here).
Continue Reading Proposed California Commercial UDAAP and Annual Reporting Regs to be Promulgated Under California Consumer Financial Protection Law

On June 28, the CFPB issued an interpretive rule affirming states’ abilities to police credit reporting markets through the issuance of their own fair credit report laws. The interpretive rule clarifies that the Fair Credit Reporting Act (FCRA) does not prevent states from enacting their own fair credit reporting laws that are stricter and more protective of consumers. The FCRA defines the permissible use of credit reports, and establishes the guidelines of the information that can and should be included in those reports. However, the FCRA leaves to the states the flexibility to consider local challenges affecting consumers and economies, and enact laws to protect consumers by further regulating credit report guidelines and uses. State fair credit reporting laws are not preempted by the FCRA unless they directly conflict with the FCRA or fall within the narrow preemption categories directly enumerated in the statute, according to the interpretive rule.
Continue Reading CFPB Issues Rule Clarifying States’ Rights to Protect Consumers Through Fair Credit Reporting Laws

On June 29, the CFPB issued an advisory opinion affirming that the Fair Debt Collection Practices Act (FDCPA) and Regulation F prohibit debt collectors from collecting pay-to-pay or “convenience fees” imposed for making a payment in a particular way, such as by phone or online, when such fees are not expressly authorized by the underlying agreement or otherwise permitted by law. In interpreting FDCPA Section 808, the Bureau’s advisory opinion explains that:
Continue Reading CFPB Advisory Opinion: Pay-to-Pay, “Convenience” Fees Prohibited by FDCPA

In 2009, Congress enacted the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). Among other things, the CARD Act curtailed a range of junk fees, coercive contract clauses, and other suspicious practices. In 2010, the Federal Reserve Board of Governors’ (Fed) voted to implement provisions of the CARD Act that required penalties to be “reasonable and proportional to the omission or violation.” While the Fed prohibited collecting excessive late fee penalties, the Fed also included a provision that allowed credit card issuers to escape enforcement scrutiny if they set fees at or below a particular level, which may be adjusted annually for inflation (immunity provision). Currently, Regulation Z, which implements the CARD Act, sets forth a safe harbor of $30 for fees generally, with exceptions and alternatives for specific scenarios.
Continue Reading CFPB Examines Credit Card Late Fees

On June 23, the FTC proposed a rule that would prohibit junk fees, bait-and-switch advertising, and other deceptive practices by auto dealers to protect consumers and honest dealers in the car-buying process. The proposed measures would:
Continue Reading FTC Targets Junk Fees, Bait-and-Switch Advertising by Auto Dealers

On June 24, the California Department of Financial Protection and Innovation (DFPI) issued proposed regulations implementing certain provisions of the California Consumer Financial Protection Law (CFPL) related to commercial financial products and services. Written comments on the proposed regulations are due by August 8.
Continue Reading DFPI Issues Proposed Rules for Commercial Financing

On April 25, the CFPB announced that it is using its “dormant authority” in order to conduct examinations of nonbanks posing risks to consumers.  The Bureau has direct supervisory authority over banks and credit unions, certain nonbanks, in addition to large depository institutions with more than $10 billion in assets, and their service providers.  With this announcement, the CFPB intends invoke its authority under the Dodd-Frank Act to examine nonbanks “whose activities the CFPB has reasonable cause to determine pose risks to consumers. This authority is not specific to any particular consumer financial product or service.”
Continue Reading FinTechs in Crosshairs as CFPB Invokes Dormant Authority to Examine Nonbanks

In a significant move, the CFPB announced on March 16 a revision to its supervisory operations to address discrimination outside of the traditional fair lending context, with future plans to scrutinize discriminatory conduct that violates the federal prohibition against “unfair” practices in such areas as advertising, pricing, and other areas to ensure that companies are appropriately testing for and eliminating illegal discrimination.  Specifically, the CFPB updated its Exam Manual for Unfair, Deceptive, or Abusive Acts or Practices (UDAAPs) noting that discrimination may meet the criteria for “unfairness” by causing substantial harm to consumers that they cannot reasonably avoid.
Continue Reading Regulation by Definition: CFPB Broadens Definition of “Unfairness” to Rein in Discrimination