Consumer Finance and Fintech Blog

Timely Updates and Analysis on Consumer Finance and Fintech

On March 21, the FDICFed, and OCC jointly issued an interim final rule to extend the applicability date of certain provisions of the Community Reinvestment Act (CRA) final rule and requested comments on the extension. The CRA, was enacted to encourage banks to help meet the credit needs of low- and moderate-income communities. The new rules, adopted in October 2023, are an effort by federal regulators to increase the CRA’s scope and rigor as well as modernize it for the digital age by better accounting for banks’ internet and mobile banking services. While previous CRA exams focused on the
Continue Reading Persisting Regulatory Uncertainty: Federal Regulators Delay New Community Lending Rules

On March 29, the CFPB and the FTC jointly filed an amicus brief with the Eleventh Circuit in a matter involving a dispute under the Fair Credit Reporting Act. The case involves a consumer who filed disputes with a consumer reporting agency (CRA) after discovering multiple errors in her credit file, including incorrect personal information. However, the CRA failed to delete the disputed information, notify any furnishers of the consumer’s dispute, or provide the sources of the disputed information. The consumer sued, alleging the CRA violated the FCRA’s reinvestigation requirement by failing to reinvestigate her dispute regarding her name, address, and SSN
Continue Reading CFPB and FTC Argue Consumer Reporting Companies Have an Obligation to Correct Errors in Joint Amicus Brief

On April 2, at an event at the White House on Data Protection and National Security, CFPB Director Rohit Chopra’s articulated potential changes to the data security regulation landscape and noted that the Bureau is considering rules to amend the Fair Credit Report Acting, tightening the regulation of data brokers that trade in sensitive consumer data. His remarks follow an Executive Order signed by President Biden five weeks ago aimed at protecting American’s sensitive personal data from “countries of concern.” 
Continue Reading CFPB Announces Potential FCRA Expansion Targeting Brokers of Consumer Data

On April 4, the CFPB published a new Issue Spotlight, titled “Banking in Video Games and Virtual Worlds” that analyzes the increased commercial activity within online video games and virtual worlds and the apparent risks to consumers—in this case, to online gamers. In particular, this report examines how “game assets” are being used and the associated risks, including the emergence of products or services that resemble traditional consumer financial products or services. 
Continue Reading Report Signals CFPB Taking Aim at Video Game and Virtual Worlds Industries

On March 27, the CFPB issued Circular 2024-02, which warns that remittance providers may be liable under the CFPA for certain deceptive marketing practices related to the speed or cost of sending a remittance transfer. Under EFTA’s “Remittance Rule,” (Subpart B of Regulation E), the term “remittance transfer” includes most electronic transfers of funds sent by consumers in the United States to recipients in other countries. Alarmingly, the Bureau notes that providers may be liable irrespective of whether they are in compliance with the Remittance Rule’s disclosure requirements. The Bureau’s circular singles out the following advertising practices by remittance providers
Continue Reading CFPB Issues Guidance on Deceptive Practices by Remittance Transfer Providers

On March 25, a coalition of trade groups filed suit in the United States District Court for the District of Colorado, challenging a Colorado law which would have opted the state Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”), a federal law enacted to create competitive equality between state-chartered banks and national banks. The law, set to take effect on July 1, 2024, would have subject out-of-state lenders to the state’s rate cap. 
Continue Reading Lenders Sue to Block Colorado’s Interest Rate ‘Opt-Out’ Law

On March 21, Wisconsin enacted into law Assembly Bill 574, positioning it as the third state, following Nevada and Missouri, to establish a comprehensive regulatory framework for earned wages access (EWA) services and products. The legislation is set to take effect September 1, 2024.
Continue Reading Wisconsin Signs Earned Wage Access Bill into Law

In a significant ruling on March 19, the Third Circuit Court of Appeals held that the CFPB can proceed with its lawsuit against a group of Delaware student loan trusts rejecting their claims that they are just passive financing entities outside the reach of the Bureau’s authority. 
Continue Reading Third Circuit Ruling Gives CFPB Green Light to Enforce Against Student Loan Trusts

In its latest campaign against “junk fees,” the CFPB announced that it was requesting consumer feedback on fees incurred as part of the residential home loan closing process, such as title insurance, credit reporting, and origination fees, as well as appraisal costs. 
Continue Reading CFPB Renews Push on “Junk Fees” with Closing Costs in its Sights

On March 7, the FTC announced it had finalized substantial revisions to the Telemarketing Sales Rule (the proposed rule was discussed here). Since promulgated in 1995, the TSR has been amended four times, most recently in 2015. This latest revision to the TSR significantly expands its reach by bringing business to business (B2B) telemarketing calls within its scope. Moreover, the revisions substantially enhanced the TSR’s recordkeeping requirements which will likely have a major impact on telemarketers’ compliance efforts. Key revisions to the TSR include:
Continue Reading FTC Announces Major Expansion of Telemarketing Sales Rule

On March 1, the Louisiana Senate introduced SB 335, a bill that would place certain disclosure requirements on providers of commercial financing transactions. Specifically, “providers” (defined as persons who consummate more than five commercial financing transactions per year with businesses in Louisiana) would be required to disclose the following in connection with each commercial financing transaction they engage in:
Continue Reading Louisiana Becomes Latest State to Introduce Commercial Financing Disclosure Legislation

On March 6, the CFPB finalized its credit card late fee rule (previously discussed here) aimed at ensuring that late fees charged on consumer credit card accounts are “reasonable and proportional.” The rule amends Regulation Z, which implements the Truth in Lending Act, in two key ways:
Continue Reading The CFPB Finalizes Credit Card Late Fee Rulemaking

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

In the latest development to challenges to the CFPB’s 1071 rulemaking, plaintiff trade associations, including the American Bankers Association and the Texas Bankers Association, have filed a motion for summary judgment requesting the court bar enforcement of the Bureau’s Small Business Lending Rule.
Continue Reading Trade Groups Continue Fight Against CFPB’s 1071 Small Business Rulemaking

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
Continue Reading Minnesota AG Bans Tribal Lender from Doing Business within the State