On November 2, the FTC entered into a settlement agreement with a Manhattan-based fintech company for $18 million over alleged deceptively marketed cash advances to consumers and impeding customers’ ability to cancel memberships. The FTC alleged that the fintech company violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).
Continue Reading FTC Settles with Fintech for $18M over Deceptive Cash Transfers and Difficult-to-Cancel Memberships

On November 15, the CFPB issued an order requiring an Illinois-based fintech lender to pay $15 million in fines. The order additionally prohibits the company from operating in certain lines of business and requires revision of its executive compensation policies.
Continue Reading CFPB Files Action Against Fintech for Allegedly Violating Previous Order, Deceiving Customers, Withdrawing Funds Without Consent

On October 30, the Superior Court of California County of Los Angeles denied the DFPI’s motion for a preliminary injunction to force a Chicago-based fintech company to stop facilitating loans to California borrowers from its bank partner at interest rates above California’s interest rate cap (generally 36% for loans less than $10,000) (we previously discussed this case here and here).
Continue Reading California Court Denies DFPI’s Motion for Preliminary Injunction Against Fintech

On November 2, the CFPB issued a new report on state Community Reinvestment Act laws. The report found that many states adopted Community Reinvestment Acts (CRAs) similar to the federal Community Reinvestment Act of 1977. The report showed that state CRAs differ from the federal CRA to account for unique reinvestment priorities of individual states. The report also showed that nonbank mortgage companies’ increasing market share has influenced how states have developed their CRAs.
Continue Reading CFPB Publishes New Report on State Community Reinvestment Laws

On November 1, the OCC issued Bulletin 2023-34 addressing the topic of “venture lending,” referred to as “commercial loans to early-, expansion-, and late-stage companies.” According to the Bulletin, venture lending is often used to fund new business growth and development but comes with its own set of risks and challenges, and financial institutions must take care to meet the agency’s expectations for risk management and risk-rating of venture loans. Key takeaways from the OCC’s Bulletin including the following:…
Continue Reading OCC Issues Bulletin on Risks Related to Venture Lending

On October 26, the United States District Court for the Southern District of Texas issued a nationwide preliminary injunction barring the CFPB from moving forward with implementing or enforcing the recently finalized Small Business Lending Rule, designed to implement Section 1071 of the Dodd-Frank Act. The injunction will likely remain in effect pending either the outcome of a trial on the underlying merits of the case or the Supreme Court’s reversal of Community Financial Services Association of America Ltd. v. CFPB. The Southern District of Texas previously issued a similar injunction in July in the same case, however, the original…
Continue Reading Federal Court Issues Nationwide Injunction of CFPB’s Small Business Lending Rule

On October 31, a federal jury in the U.S. District Court for the Western District of Missouri found the defendants, a trade association, which represents residential and commercial real estate industries, and multiple residential brokerages liable for $1.8 billion in damages for conspiring to artificially inflate commissions on home sales. …
Continue Reading Federal Jury: Trade Association and Real Estate Brokerages Conspired to Inflate Commissions, $1.8B in Damages to Plaintiffs

On October 24, the FTC and the Wisconsin Department of Justice (DOJ) announced a $1.1 million settlement with a group of Wisconsin auto dealers for allegedly charging customers illegal junk fees and unlawfully discriminating against American Indian customers. The action was brought under the FTC Act, the Equal Credit Opportunity Act (ECOA), the Wisconsin Deceptive Trade Practices Act, and the Wisconsin Consumer Act.
Continue Reading FTC and Wisconsin DOJ Agree to $1.1M Settlement with Auto Dealers over Unlawful Junk Fees and Discrimination Against American Indian Customers

On October 27, the FTC has approved an amendment to the Safeguards Rule that would require non-banking institutions to report certain data breaches and other security events to the agency. The amendment requires financial institutions to notify the FTC as soon as possible, and no later than 30 days after discovery, of a security breach involving the information of at least 500 consumers. Such an event requires notification if unencrypted customer information has been acquired without the authorization of the individual to which the information pertains. The notice to the FTC will need to include certain information about the event, including:…
Continue Reading FTC Amends Safeguards Rule, Requires Non-Banks to Report Data Security Breaches

On October 19, the CFPB proposed a rule that would require depository and nondepository entities to make available to consumers and authorized third parties certain data relating to consumers’ transactions and accounts (see our previous post on this rulemaking here and here). The proposed rule would also establish obligations for third parties accessing a consumer’s data, including privacy protections for that data, and provide basic standards for data access to promote fair, open, and inclusive industry standards.
Continue Reading CFPB Issues Proposed Rule to Regulate Personal Financial Data Rights

In August, a New York federal district court denied a motion to dismiss a CFPB lawsuit against three affiliated companies engaged in the business of purchasing distressed consumer debt and several of the companies’ owners and officers. The CFPB’s lawsuit involves claims against the defendants for violations of the Consumer Financial Protection Act (“CFPA”) and Fair Debt Collection Practices Act (“FDCPA”) based on a theory of vicarious liability as a result of conduct of the companies’ third-party debt collection vendors.
Continue Reading NY Federal Court Rules CFPB Vicarious Liability Suit Can Proceed

A number of state and federal regulators, bolstered by messaging from the Biden administration, have embarked on a concerted campaign to address so-called “junk fees.” …
Continue Reading CFPB, FTC, California Make Significant Moves on “Junk Fees”

On October 17, the CFPB took action against a nonbank fintech company for allegedly deceiving consumers about the speed and cost of remittance transfers through its mobile app. The Bureau also alleges that the company illegally forced consumers to waive their legal rights, failed to provide consumers with legally required disclosures and receipts, and failed to properly investigate consumer disputes and errors. The CFPB is ordering the company to refund affected consumers nearly $1.5 million in fees and pay a $1.5 million penalty into the CFPB’s victims relief fund.
Continue Reading CFPB Acts Against Fintech Operator of Mobile App for Illegal International Money Transfers