Agency Rulemaking and Guidance

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 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

On December 19, President Biden vetoed the joint resolution (S. J. Res. 32) the US Senate and House of Representatives passed under the Congressional Review Act that would have repealed the CFPB’s small business data collection rule (Rule) known as “Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)” (we blogged about the rule and congressional challenge here and here). Continue Reading President Biden Vetoes Congressional Review Act Disapproval of CFPB’s Small Business Lending Data Collection Rule

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