On November 26, the U.S. Fifth Circuit Court of Appeals overturned sanctions imposed by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) against a decentralized cryptocurrency mixing service (a blockchain-based technology used to enable transaction anonymity) accused of facilitating money laundering.
Continue Reading Fifth Circuit Overturns OFAC Sanctions on Blockchain-based Privacy Technology
On December 3, the CFPB announced a proposed rule to enhance oversight of data brokers that handle consumers’ sensitive personal and financial information. The proposed rule would amend Regulation V, which implements the Fair Credit Reporting Act (FCRA), to require data brokers to comply with credit bureau-style regulations under FCRA if they sell income data or certain other financial information on consumers, regardless of its end use.
Continue Reading CFPB Takes Aim at Data Brokers in Proposed Rule Amending FCRA
On December 3, the CFPB filed a proposed settlement to resolve a long running lawsuit against a student loan relief company and its owner (collectively, the “Defendants”). The settlement bars the company from offering or providing debt settlement products. In addition, the Defendants must pay $2,000 in civil monetary penalties, an amount determined based on their inability to pay more.
Continue Reading CFPB’s Settlement Imposes Permanent Ban on Defunct Student Loan Relief Company and Its Owner
On November 13, the Federal Reserve Board issued two cease and desist orders against a state-chartered bank and a bank holding company for alleged compliance deficiencies.
Continue Reading Federal Reserve Board Penalizes Two Banks for Compliance Deficiencies
On November 21, the CFPB announced the arrival of its finalized larger participant rule (the “Rule”) regulating nonbank companies offering digital funds transfer and payment wallet applications to consumers.
Continue Reading New CFPB Larger Participant Rule Boosts Oversight of Major Digital Payment Providers
On November 15, the U.S. District Court for the Southern District of Texas overseeing the ongoing legal challenge to the CFPB’s Section 1071 small business lending rule (previously discussed here, here, here, and here), issued an order denying the plaintiff trade groups’ motion to toll the deadlines of the rule while an appeal moves through the Fifth Circuit.
Continue Reading Federal Court Denies Request to Delay CFPB’s Small Business Lending Rule as Compliance Deadlines Approach
Starting in February 2025, providers of (1) debt settlement services, (2) student debt relief services, (3) private postsecondary education financing, and (4) income-based advances (a/k/a earned wage access (EWA) products) must begin registering and conform to annual reporting requirements in order to operate in California. We previously discussed this rule here.
Continue Reading California DFPI Poised to Fill Potential Regulatory Gap Amid Anticipated CFPB Leadership Shift
On November 14, the CFPB entered into a consent order with a telecommunications company and its subsidiaries (collectively, the “company”) for allegedly withdrawing millions of dollars from over half a million consumer accounts and preventing money transfers to incarcerated individuals, depriving them of essential goods like food, medicine, and clothing, in violation of the CFPA’s prohibitions on unfair acts or practices.
Continue Reading CFPB Hits Telecom Giant with Fines for Alleged Exploitation of Incarcerated Consumers
On November 12, the CFPB released a report analyzing federal and state-level privacy protections for consumer financial data.
Continue Reading CFPB Report Highlights Financial Data Protection Challenges
On November 13, the Consumer Financial Protection Bureau released a “pilot study” on the small business lending market revealing “significant disparities” in how lenders treat black and white small business owners. As part of its study, the CFPB conducted matched-pair testing at 50 bank branches in New York and Virginia using actors who posed as small business owners. Black participants were provided slightly more favorable financial profiles compared to the white participants. In many tests, the black and white participant each met with the same bank representative.
Continue Reading CFPB Study Finds Differential Treatment in the Small Business Lending Market
On November 7, 2024, the CFPB ordered one of the largest credit unions in the nation to pay over $95 million for its practices related to the imposition of overdraft fees. The enforcement action addresses practices from 2017 to 2022 where the credit union charged overdraft fees on transactions that appeared to have sufficient funds, affecting consumers including those in the military community, in violation of the CFPA’s prohibition on unfair, deceptive, and abusive acts or practices.
Continue Reading CFPB Imposes $95 Million Fine on Large Credit Union for Overdraft Fee Practices
On November 1, the CFPB filed a proposed stipulated final order that would resolve the Bureau’s pending lawsuit in the Northern District of Illinois against a nonbank mortgage lender and broker for allegedly engaging in redlining and other discriminatory lending practices. In its underlying complaint filed in 2020, the CFPB alleged that the defendant violated the Equal Credit Opportunity Act (“ECOA”) by making statements in podcasts, radio shows, and marketing materials that discouraged prospective African-American applicants in Chicago and the surrounding suburbs from applying for mortgage loans.
Continue Reading CFPB Reaches Settlement in Redlining Suit Against Nonbank Mortgage Lender
On November 5, the Federal Trade Commission (“FTC”) filed a complaint against a company in connection with its mobile banking app, alleging violations of Section 5(a) of the FTC Act and Section 4 of the Restore Online Shoppers’ Confidence Act (“ROSCA”) for misleading customers through hidden fees and other deceptive practices. According to the FTC, the app targeted financially vulnerable individuals with surprise “tip” fees, amounting to 15% of cash advances, which was falsely marketed as a charitable donation. While customers were led to believe their tips funded meals for children, only a fraction of the funds was actually donated,
Continue Reading FTC Takes Aim at Mobile Banking App for Deceptive Advertising Practices
On November 1, a debt collection trade group filed a complaint in federal court challenging an October 1 CFPB advisory opinion that warned debt collectors against seeking payment on unverified or potentially inflated medical bills (we previously discussed the advisory opinion here).
Continue Reading Debt Collectors Push Back: Trade Group Sues CFPB Over New Medical Debt Collection Rules
On October 30, two leading fintech industry trade associations submitted comments (see comment letters here and here) in response to a joint Request for Information (RFI) issued by the Office of the Comptroller of the Currency (OCC), the Federal Reserve System (Fed), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the “Agencies”) (see here for our previous discussion on the RFI). The RFI seeks input on the nature of bank-fintech arrangements, effective risk management practices, and the implications of such arrangements, including whether enhancements to existing supervisory guidance may be helpful in addressing associated risks. The comment period concluded
Continue Reading Fintech Industry Trade Associations Respond to Federal Regulators’ Joint RFI on Bank-Fintech Partnerships
On October 24, the District of Columbia Office of the Attorney General (the “DCAG”) announced that it entered into a $500,000 settlement with a title insurance company following an investigation, alleging that the company engaged in an illegal kickback scheme. Specifically, the DCAG determined that the title company offered real estate agents discounted ownership interests and profit-sharing in entities created specifically for the purpose of incentivizing those agents to make business referrals to the title company.
Continue Reading D.C. Attorney General Settles with Title Insurance Company for Alleged Kickback Scheme