Agency Rulemaking and Guidance

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On October 25, the CFPB released its sixth biennial report to Congress as required under the Credit Card Accountability Responsibility and Disclosure Act (CARD Act). The report found that in 2022 credit card companies charged consumers over $105 billion in interest and more than $25 billion in fees. The report also showed several trends in consumer credit card activity and identified potential areas of concern. Key highlights from the report include:Continue Reading CFPB Report: Credit Card Companies Charged Consumers $130B in Interest and Fees

On November 1, the OCC issued Bulletin 2023-34 addressing the topic of “venture lending,” referred to as “commercial loans to early-, expansion-, and late-stage companies.” According to the Bulletin, venture lending is often used to fund new business growth and development but comes with its own set of risks and challenges, and financial institutions must take care to meet the agency’s expectations for risk management and risk-rating of venture loans. Key takeaways from the OCC’s Bulletin including the following:Continue Reading OCC Issues Bulletin on Risks Related to Venture Lending

On November 2, the CFPB issued a new report on state Community Reinvestment Act laws. The report found that many states adopted Community Reinvestment Acts (CRAs) similar to the federal Community Reinvestment Act of 1977. The report showed that state CRAs differ from the federal CRA to account for unique reinvestment priorities of individual states. The report also showed that nonbank mortgage companies’ increasing market share has influenced how states have developed their CRAs.Continue Reading CFPB Publishes New Report on State Community Reinvestment Laws

On October 18, the Senate voted 53-44 to approve S.J. Res. 32, a resolution sponsored by Sen. Kennedy (R-LA) to overturn the implementation of the CFPB’s final rule under Section 1071 of the Dodd-Frank Act requiring lenders to report demographic data on small-business loan recipients (see our previous blogs on the rule here and here). The resolution invoked the Congressional Review Act (CRA) to disapprove the CFPB’s final rule – the CRA allows lawmakers to revoke a recently issued federal agency rulemaking by passing a resolution of disapproval against it. The resolutions must pass each chamber of Congress and need a presidential signature to take effect. The White House has threatened to veto the bill.Continue Reading Senate Votes to Repeal CFPB Small Business Lending Rule

Many residential mortgage lenders currently have loan compensation plans that provide for a payment to loan originators of one commission amount for loans funded by the lender, and a smaller commission amount for loans that are brokered out to other lenders. While the CFPB never directly endorsed this result, they did not reject it either. In its Loan Originator Compensation Rule Resource Guide, the Mortgage Bankers Association provided the following illustration and comment when discussing the Loan Originator Compensation Rule’s prohibition against compensation based on a proxy for a term of a transaction:Continue Reading CFPB Adjusts Long Time Position Relating to Loan Originator Compensation

The Federal Reserve Board recently issued two Supervision and Regulation Letters that provide guidance on the agency’s supervision of novel activities and the process such as fintech partnerships, crypto-related activities, and activities using distributed ledger or blockchain technology. Continue Reading Federal Reserve Issues Guidance on Supervision of “Novel Activities” by Banks, Impacts Bank-Fintech Partnerships

On August 18, the FTC published guidance for third party sellers detailing how the INFORM Consumers Act, which took effect on June 27, may impact their businesses. The INFORM Act provides that online marketplaces where high-volume third party sellers offer new or unused consumer products must collect, verify, and disclose certain information about those sellers. Online marketplaces must also offer a clear mechanism for consumers to report suspicious activity.Continue Reading FTC Publishes INFORM Act Guidance for Third Party Sellers

On August 15, CFPB Director Rohit Chopra announced plans for new CFPB rules that would strictly limit the types of consumer data that can be sold by businesses and ensure that data brokers comply with the Fair Credit Reporting Act (“FCRA”). The announcement came during a White House roundtable event focused on protecting individuals’ data privacy and as part of a broader federal crackdown on third-party data brokers. Director Chopra highlighted two proposals in particular that the CFPB is considering.Continue Reading CFPB Forecasts New Rule Cracking Down on Consumer Data Sales

On July 31, the U.S. District Court for the Southern District of Texas enjoined the CFPB from implementing and enforcing the small business lending rule (Section 1071) requirements pending the Supreme Court’s decision in Community Financial Services Association of America Ltd. v. CFPB, a challenge to the constitutionality of the CFPB’s funding structure (we previously discussed Section 1071 rulemaking in prior blog posts here and here, and the Texas lawsuit here). In particular, the court enjoined the CFPB from implementing and enforcing the final rule against the plaintiffs and their members, but denied the plaintiffs’ request for a nationwide injunction. Continue Reading Texas Court Enjoins CFPB’s Enforcement of Small Business Lending Rule

On July 26, the CFPB released its Summer 2023 Supervisory Highlights reporting unfair, deceptive, and abusive acts or practices (UDAAPs) across a number of consumer financial products, including auto origination, auto servicing, consumer reporting, debt collection, deposits, fair lending, information technology, mortgage origination, mortgage servicing, payday and small dollar lending, and remittances, in violation of the CFPA. Below we focus on some key areas in particular.Continue Reading Latest CFPB Supervisory Highlights Detail UDAAPs Across Range of Areas

On July 7, the CFPB, HHS, and Treasury announced a joint inquiry into high-cost specialty financial products which are being offered to patients as alternate forms of payment for routine medical care. Traditionally, these financial products were used to pay for medical care not covered by traditional health insurance such as dental, vision, fertility services, and cosmetic surgery, but are now being offered to pay for a broader set of services. This inquiry is the next step in an ongoing effort to expand research into medical payment products and medical billing and collections procedures to finer tune actions aimed at relieving the burden these products and procedures place on consumers. To this end, the CFPB is seeking public input into the experiences of consumers, financial service providers, and health care providers alike. The CFPB press release noted the following as the primary concerns driving this inquiry:Continue Reading CFPB, other Federal Agencies Seek Public Comment about Medical Debt