In the FDIC’s latest monthly update on enforcement decisions and orders, the agency published recent consent orders it entered against both a New York-based and an Ohio-based bank, the latest in the agency’s series of enforcement actions against bank-fintech partnerships. The orders did not impose any fines or civil penalties but require corrective actions by the banks and their boards.Continue Reading FDIC Issues Orders Against Two More Banks Over Fintech Partnerships
On March 5, the New York Attorney General filed a lawsuit against a network of over 30 lending companies and their officers alleging their involvement in a predatory “merchant cash advance” lending scheme that exploited New York businesses through fraudulent loans at “sky-high interest rates.” Continue Reading New York Attorney General Brings $1.4 Billion Lawsuit Against Merchant Cash Advance Lenders
On February 21, the Minnesota Attorney General settled an action against executives of a Montana-based tribal lender for alleged predatory lending practices. In its complaint, filed in October 2023, the AG alleged the company engaged in, among other things, unfair, deceptive and abusive trade practices, unfair collections practices (resulting in a federal RICO charge), unlawful usury practices, and violations of Minnesota’s short-term lending statute, in making small dollar installment loans to consumers bearing interest rates between 474% and 795%. The company allegedly led many Minnesotans to believe that the tribal entity was immune from state laws guarding against interest rate limits on small and short-term loans, and implemented deceptive contractual provisions. Continue Reading Minnesota AG Bans Tribal Lender from Doing Business within the State
On February 22, Attorney General Merrick B. Garland appointed Jonathan Mayer as the Justice Department’s inaugural Chief Science and Technology Advisor and Chief Artificial Intelligence Officer. Mayer will sit in the Justice Department’s Office of Legal Policy and lead the Department’s newly established Emerging Technologies Board which coordinates and governs AI and other emerging technologies across the Department. Mayer will also build a team of technical and policy experts in cybersecurity and AI. The Chief AI Officer position is a role required by President Biden’s Executive Order on AI. Mayer is an assistant professor of computer science and public affairs at Princeton University and served as the technology law and policy advisor to then-Senator Kamala Harris as well as the chief technologist to the FCC’s Enforcement Bureau. Continue Reading Justice Department Hire’s First Chief AI Officer
On February 21, a proposed class action lawsuit was filed against an auto finance company in the U.S. District Court for the Northern District of Georgia alleging various violations of the Military Lending Act (“MLA”). The named plaintiff is a “Covered Borrower” under the MLA, which includes active-duty military servicemembers and their dependents.Continue Reading Auto Finance Company Faces Class Action Lawsuit for Targeting Military Families
In separate public speeches, senior officials from the Department of Justice and the Securities and Exchange Commission warned of harsh penalties against individuals and companies misusing AI for fraudulent purposes.Continue Reading DOJ and SEC Officials Issue Harsh Warnings Concerning the Misuse of AI
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 5, the DOJ and North Carolina’s attorney general announced a $13.5 million settlement deal with a large regional bank over redlining allegations.Continue Reading DOJ and North Carolina Attorney General Reach $13.5M Settlement in Discriminatory Lending Case
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 January 19, the Federal Reserve Board (FRB) and New York Department of Financial Services (NYDFS) each issued orders settling an action against a large global bank for alleged BSA/AML violations and other compliance failures. The FRB issued a cease and desist order with a $2.4 million civil money penalty, while the NYDFS issued a consent order with a $30 million civil money penalty.Continue Reading Federal Reserve and NYDFS Penalize Large Global Bank for BSA/AML and Other Compliance Failures
On January 18, the FTC issued a consent order prohibiting a digital platform and data aggregator from selling or licensing precise consumer location data on the grounds that it did not obtain consumer consent before collecting and selling the data to advertisers.Continue Reading FTC Cracks Down on Data Aggregator, Bans Sale of Precise Consumer Location Data