On January 3, 2025, the CFPB announced a reboot of its no-action letter and compliance assistance sandbox policy, aimed at promoting consumer-beneficial innovation in financial services. The new policies are designed to foster competition and transparency while addressing unmet consumer needs.Continue Reading CFPB Updates No-Action Letter and Compliance Assistance Sandbox Policies to Spur Innovation
On January 8, the CFPB announced its intent to pursue rulemaking that would allow the agency to oversee nonbank personal loan lender. The announcement came in response to a petition filed in September 2022 by the Consumer Bankers Association and the Center for Responsible Lending, which called on the CFPB to engage in rulemaking under section 1024(a)(2) of the Consumer Financial Protection Act to subject certain “larger participants” in the nonbank personal loan market to the CFPB’s supervisory authority.Continue Reading CFPB Announces Plans to Regulate Nonbank Personal Loan Providers
On January 7, 2025, the CFPB announced the finalization of a rule amending Regulation V, which implements the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., to prohibit the inclusion of medical bills on credit reports used by lenders and prevent lenders from using medical information in lending decisions. According to the Bureau, the final rule (previously discussed here) will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans.Continue Reading CFPB Finalizes Rule Removing Medical Bills from Credit Reports
On January 7, 2025, the United States Department of Justice (the “DOJ”) announced that a non-depository mortgage lender has agreed to pay $1.75 million in connection with allegations that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black and Hispanic neighborhoods.Continue Reading DOJ Announces Third Settlement with a Non-Depository Lender to Resolve Alleged Redlining Claims
On January 6, 2025, the CFPB filed a lawsuit against a non-bank manufactured home financing company for violations of the Truth in Lending Act and Regulation Z. The lawsuit alleges that the mortgage lender engaged in predatory lending practices by providing manufactured home loans to borrowers it knew could not afford them.Continue Reading CFPB Sues Mortgage Lender for Predatory Lending Practices in Manufacture Homes Loans
On January 7, 2025, the CFPB filed a lawsuit against a nationwide consumer reporting agency for violations of the Fair Credit Reporting Act. The lawsuit claims the company’s investigation of consumer disputes was inadequate, specifically criticizing their intake, processing, investigation, and customer notification processes. The lawsuit also alleges the company reinserted inaccurate information on credit reports, which the agency alleges harmed consumers’ access to credit, employment, and housing. In addition to FCRA, the Bureau alleges that the company’s faulty intake procedures and unlawful processes regarding consumer reports violated the Consumer Financial Protection Act’s (CFPA) prohibition on unfair acts or practices.Continue Reading CFPB Alleges Credit Reporting Agency Conducted Sham Investigations of Errors
On December 16, the CFPB released a special edition of its Supervisory Highlights, which detailed findings from the Bureau’s recent examinations of student loan markets. The report identifies a range of violations related to student loan refinancing, private lending and servicing, debt collection, and federal loan servicing.Continue Reading CFPB Report Highlights Widespread Violations in Student Loan Sector
On December 17, 2024, the Consumer Financial Protection Bureau (CFPB) finalized a rule applying standard mortgage protections to Residential Property Assessed Clean Energy (PACE) loans. The rule amends Regulation Z to clarify that voluntary tax assessments and liens, like PACE financing, are not excluded under the Truth in Lending Act (TILA) and recognizes PACE financing as meeting the definition of “credit” under TILA and Regulation Z. It also introduces ability-to-repay requirements for residential PACE loans. The rule is set to take effect on March 1, 2026.Continue Reading New CFPB Rule Applies Mortgage Standards to Residential PACE Financing
On December 18, 2024, the Consumer Financial Protection Bureau (the “CFPB”) issued a circular to other law enforcement agencies warning that some credit card companies operating rewards programs may be breaking the law, and urging them to take action. The practices in question include, among others, illegally devaluing rewards points and airline miles. The CFPB also published research which found that retail credit cards charge much higher interest rates than traditional cards. In its circular, the CFPB provides a detailed review of these issues.Continue Reading CFPB Calls on Other Enforcement Agencies to Address Bait-and-Switch Credit Card Rewards Practices
On December 12, the CFPB released the final version of its overdraft rule that was first proposed in January. (We discussed it here.) Currently, financial institutions that extend overdraft protection are exempt from certain disclosure and underwriting requirements under TILA. This exemption was intended to allow banks to provide limited overdraft services as a courtesy to customers who inadvertently overdrew on their accounts. The Bureau now claims that fees generated from these overdraft credit products are excessive and harmful to consumers, and estimates the rule will add up to $5 billion in annual overdraft fee savings for consumers.Continue Reading CFPB Release Final Rule on Overdraft Fees
On December 6, the CFPB issued an order establishing supervisory authority over a major tech company. While the company is already subject to CFPB’s enforcement authority, the Bureau has determined that the company meets the legal requirements for supervisory oversight. This marks only the second occasion where the CFPB has publicly released a supervisory designation order in a contested matter. Continue Reading CFPB Issues Risk-Based Supervision Order Over Major Tech Company