Consumer Finance

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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 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 April 24, the CFPB released its latest edition of Supervisory Highlights detailing the agency’s actions taken to combat “junk fees” it alleges are charged by mortgage servicers. This spotlight on fees in mortgage servicing marks a continuation of previous CFPB exam work on the agency’s ongoing efforts to combat excessive fees affecting consumers in personal banking, student and auto loans in addition to mortgage servicing.Continue Reading CFPB Announces Update in Continued War on Mortgage Servicing Junk Fees

On February 7, a Florida-based cryptocurrency company agreed to settle charges brought by the SEC and the California Department of Financial Protection and Innovation alleging that, an interest-earning feature offered on the company’s platform, constitutes an illegal securities offering.Continue Reading Crypto Platform Settles SEC and State Regulator Charges over Interest Bearing Feature on Customer Accounts

On February 6, the FTC announced that it had reached proposed settlements with several defendants in a pending action where the parties were accused of operating a fraudulent student debt relief scheme and collecting so-called “junk fees” from consumers.Continue Reading FTC Announces Settlement of Junk Fee Enforcement Action

On June 15, the CFPB posted a blog, titled “Buy Now, Pay Later and Credit Reporting” discussing the Bureau’s viewpoint on the importance of standardized data furnishing by buy now, pay later (BNPL) firms to consumer reporting companies for inclusion in consumer credit reports. BNPL products provide consumers with a short-term, no-interest credit option and are widely used for online purchases and, increasingly, brick-and-mortar stores. The CFPB has recently expressed concerns about the fast-growing BNPL credit industry, noting the potential for consumers to accumulate debt by making multiple BNPL purchases across several different BNPL firms. (See our previous posts about the CFPB’s December 2021 BNPL market monitoring inquiry here and here).
Continue Reading CFPB Blogs About Need for Standardized Credit Reporting

On May 4, the Connecticut Department of Banking issued a temporary cease and desist order directing a peer-to-peer lending platform that connected borrowers with third-party lenders to cease its lending-related activities on grounds that it was operating as an unlicensed small loan company.  The FinTech company was also cited for operating as an unlicensed consumer collection agency, and for engaging in deceptive acts or practices under consumer protection laws.
Continue Reading Connecticut Stops FinTech from Unlicensed Lending Activities

On November 16, the California DFPI released Version 2.0 of its Annual Report of Finance Lenders, Brokers and PACE Administrators Licensed under the California Financing Law (CFL).  The Annual Report examined unaudited data gathered from finance lenders, brokers, and Property Assessed Clean Energy (PACE) administrators licensed under the CFL, as well as new data from the “buy now, pay later” or BNPL industry.
Continue Reading DFPI Reports Increase in Consumer Loans Under $2,500, Decrease in Consumer Loans Between $2,500 and $10,000

Hawaii recently enacted HB 1192, which amends the state’s small dollar lending law by setting forth a new licensing requirement for “installment lenders” and specifies various consumer protection requirements.  The amendments, which impact consumer loans of $1,500 or less,  include a broad definition of “installment lender” that would capture loans offered under a bank partnership model:
Continue Reading Hawaii Amends Small Dollar Lending Law