Agency Rulemaking and Guidance

On September 22, the CFPB released its annual report providing an overview of the residential mortgage trends and activity in 2021 based on data collected from thousands of U.S. lending institutions under the Home Mortgage Disclosure Act (HMDA). Some of the key findings in the report include:

Continue Reading 2021 CFPB Annual Report Shows Increase in Home Purchase Loans, Decrease in Refinancing

On August 30, the Commissioner of the California DFPI issued a notice of rulemaking proposing new regulations and amendments to current regulations implementing the state’s student loan servicing laws. The proposed regulations aim to implement the provisions of the Student Loan Servicing Act and the Student Loans: Borrower Rights law by:

Continue Reading California Regulator Proposes Changes to Student Loan Servicing Laws

Recently, the CFPB released a report outlining the challenges and risks inherent in the rapid evolution of the payment ecosystem, with a particular focus on emerging uses cases involving “super apps,” buy now, pay later (BNPL), and embedded payments, as well as their implications for consumers. The report notes that these changes create more opportunities for companies to aggregate and monetize consumer financial data, and for large players to dominate consumers’ financial and commercial lives.

Continue Reading CFPB Warns of Consumer Risk Over New Payment Products, Foreshadows Supervision of BNPLs

On July 29, the New York Department of Financial Services (NYDFS) released Draft Amendments to its Part 500 Cybersecurity Rules that would impose new obligations on financial institutions on reporting, governance, testing, access management, risk assessment, business continuity plans, among others.

Continue Reading New York Proposes Cybersecurity Rules for Financial Institutions

On August 10, the CFPB issued an interpretive rule stating that digital marketing providers that are involved in the identification or selection of prospective customers or the selection or placement of content to affect consumer engagement including purchase or adoption behavior, are subject to the CFPB’s jurisdiction. The rule ostensibly clarifies the scope of companies that are “service providers” under the CFPA to include digital marketing providers, and thereby subjecting them to the CFPB’s authority to prohibit UDAAPs.

Continue Reading CFPB’s New Interpretive Rule Sets Sights on Digital Marketing Vendors

On August 11, the CFPB published a circular clarifying liability under consumer financial protection law for bank and nonbank financial companies that fail to safeguard consumer data. The circular describes how firms may be violating the CFPA’s prohibition on unfair acts or practices with respect to the handling of consumer data by not implementing adequate measures to protect against data security incidents. These data security incidents may lead to significant harm to a few consumers—who, for example, become victims of targeted identify theft after a breach—or may lead to harm of many consumers in the event of large scale, customer-base-wide breaches. The circular includes specific examples for reference.

Continue Reading CFPB Circular: Safeguard Consumer Data or Face Liability

On July 15, the California DFPI released draft text for a proposed second rulemaking under the Debt Collection Licensing Act (DCLA) relating to the scope, annual report, and bond amount increase provisions of the DCLA.

Continue Reading DFPI Second Rulemaking Proposal on Debt Collection Licensing

In March, U.S. Department of Treasury issued its annual General Explanations of the Administration’s Revenue Proposals, commonly known as the “Green Book.”  Among other revenue proposals, the Treasury addressed the treatment of on-demand pay arrangements or earned wage access (EWA) programs, which have risen in popularity in recent years (previously discussed in our Labor and Employment Blog).  EWA programs generally allow employees to access accrued wages before the end of their regular pay cycle.
Continue Reading Treasury Department Proposes Non-Loan Status for Earned Wage Access

On March 22, the CFPB issued Compliance Bulletin 2022-05 regarding potentially illegal practices related to consumer reviews.  The guidance states that consumer reviews impact company revenue and help consumers choose between financial providers, which can in turn “incentivize dishonest market participants to attempt to manipulate the review process, rather than compete based on the value of their services, which can frustrate a competitive marketplace.”
Continue Reading CFPB Flexes UDAAP Muscle Over Contractual “Gag” Clauses and Fake Consumer Reviews

On February 23, the CFPB outlined a proposal for upcoming joint rulemaking to prevent algorithmic bias in automated home valuation models (AVMs).  Here, the CFPB is specifically focused on the potential for AVMs to pose fair lending risks to homebuyers and homeowners.  The CFPB issued the outline pursuant to a requirement under the Small Business Regulatory Enforcement Fairness Act that includes “collecting small entities’ advice and recommendations on the potential impacts of the proposals under consideration and feedback on regulatory alternatives to minimize these impacts.”
Continue Reading CFPB Seeks to Prevent Algorithmic Bias in Automated Home Valuation Models