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The Enforcement Blog

CFPB and New York Attorney General Announce Settlement with Retailer for Violations of TILA and CFPA

Posted in CFPB, Credit Cards, Regulatory Developments

On January 16, 2019, the Consumer Financial Protection Bureau and the New York Attorney General announced a settlement with a retailer for alleged violations of the Consumer Financial Protection Act of 2010 and the Truth in Lending Act, as well as New York State law arising out of the retailer’s sales practices for its store credit cards. As part of the settlements, the retailer is required to pay $10 million in civil money penalties to the CFPB and $1 million in civil money penalties to the State of New York.

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CFPB Announces Settlement for Violations of the EFTA and CFPA

Posted in CFPB, Regulatory Developments

On January 3, 2019, the Consumer Financial Protection Bureau (CFPB) announced a settlement with a federal savings bank for alleged violations of the Electronic Fund Transfer Act (EFTA) and Regulation E, as well as alleged violations of the Consumer Financial Protection Act of 2010 (CFPA). This is the first CFPB enforcement action under Director Kathy Kraninger.

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Are You a Money Transmitter in Michigan? In California?

Posted in Regulatory Developments

The payments and money transmission regulatory landscape continues to evolve.  A key new development is that Michigan has affirmed by legislation that “agent of a payee” transactions meeting certain criteria are not subject to regulation under the state’s money transmission licensing law. However, the California Department of Business Oversight (the “DBO”), which regulates money transmission in California, continues to scrutinize the scope of what constitutes payee-agency activity exempt from money transmission licensing.  In light of these developments, businesses that rely on payee-agency exemptions should closely evaluate the structure of their arrangements to assess whether they come within specific state exemptions and whether any affirmative steps need to be taken to confirm compliance with specific regulators.

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Agencies Propose Conforming Amendments to Volcker Rule Regulations

Posted in Regulatory Developments

On December 18, 2018, five federal agencies released a proposed rule (“Proposed Rule”) to conform the regulations implementing the Volcker Rule to statutory modifications provided by Sections 203 and 204 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Regulatory Relief Act”).  The Proposed Rule will not change the manner in which the Volcker Rule is currently administered, since the relevant provisions of the Regulatory Relief Act were effective upon enactment.  The agencies invite comment on the Proposed Rule within 30 days after the date of publication in the Federal Register.

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The Bureau of Consumer Financial Protection Proposes Revised No-Action Letter Policy and New Product Sandbox

Posted in CFPB, Regulatory Developments

On December 13, 2018, the Bureau of Consumer Financial Protection published in the Federal Register a proposed policy, which would modify its 2016 Policy on No-Action Letters and create a new “Product Sandbox” policy in an effort to encourage banks and financial services providers to test new financial products.

The alert discusses the Proposed Policy’s intention to fix several shortcomings of the 2016 Policy and encourage companies to test new financial products and services.

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Agencies Issue Further Guidance Regarding Emerging Approaches to BSA/AML Compliance

Posted in Regulatory Developments

On December 3, 2018, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, National Credit Union Administration, and Office of the Comptroller of the Currency (collectively, the “Agencies”) issued a joint statement regarding “innovative approaches” to Bank Secrecy Act/anti-money laundering compliance. This is the second joint statement issued this year by the Agencies addressing approaches to BSA/AML compliance.

This alert discusses those statements along with the broader effort by the Agencies to enhance the efficiency and effectiveness of the BSA, and continued Congressional interest in BSA-related legislative reform.

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Financial Services Report – Winter 2018

Posted in Arbitration, CFPB, Credit Cards, Credit Reports, Electronic Payments, Enforcement Actions, Fair Lending, Foreclosure, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators

In between holiday shopping and merriment, we here at the Financial Services Report are pondering what’s in a name. Not much, said Shakespeare. Isaac Asimov begged to differ in a mystery story about who killed one of the library twins (we won’t give away the twist that hinges on a name). So do companies that spend millions of dollars identifying names to reflect their brands, and parents-to-be who spend countless hours poring over baby-naming books in search of the perfect name.

While he was the acting Director of the agency originally called the Consumer Financial Protection Bureau, Mick Mulvaney waded into this debate when he announced in March that the agency name would change to the Bureau of Consumer Financial Protection. “We changed the name because it’s the name in the statute,” acting Director Mulvaney explained, in what he described as a “good, small way” to signal that the agency would “follow the statute.”

Since then, it’s been a bit of a mixed message from the Bureau — at least on branding — with a new seal reflecting the new name, but a website reflecting the old name. On substance, has the Bureau followed the statute under acting Director Mulvaney? And how will Kathy Kraninger put her mark on the agency as she becomes its second director?

To mark the change in command, we here at the Financial Services Report are adopting the new name for the Bureau with this issue.  Let us know if you feel strongly — about our branding or our substance! Either way, we hope you keep reading for all the updates on the Beltway, the Bureau (aka the BCFP), Privacy, Mortgage, Preemption, BSA/AML, TCPA, and more. We wish you Happy Holidays and all the best in the New Year!

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California Enacts a First-of-Its-Kind Commercial Financing Disclosure Law

Posted in Regulatory Developments, State Regulators

On September 30, 2018, California Governor Jerry Brown signed into law SB 1235, which requires disclosures of key terms in connection with certain commercial financing by non-banks and could impact bank/non-bank arrangements as well.

With the passage of the Act, California became the first state to require consumer-style disclosures for commercial financing. The Act is intended to facilitate comparisons of financing options by recipients of covered financing offers. It establishes a general framework for the disclosure requirements, but requires the California Department of Business Oversight to establish the details through the adoption of implementing regulations. The Act becomes effective once the DBO issues final regulations.

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Federal Agencies Reaffirm that Supervisory Guidance Is Not Law – Who Knew?

Posted in CFPB, Regulatory Developments

Yesterday, five federal agencies – the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Bureau of Consumer Financial Protection – issued a two-page, joint statement on the role of supervisory guidance for regulated institutions. Although brief, the joint statement is significant.

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Financial Services Report – Fall 2018

Posted in Arbitration, Auto Lending, CFPB, Credit Cards, Credit Reports, Electronic Payments, Enforcement Actions, Fair Lending, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, Student Lending, UDAAP

So much for the lazy days of summer. It’s been a busy couple of months on both coasts. In a case of déjà vu all over again, a New York federal court found that the CFPB structure is unconstitutional and that the defects infected Title X of the Dodd-Frank Act as a whole. The Judge rejected the D.C. Circuit’s conclusion otherwise in PHH Corp. v. CFPB, and granted the CFPB’s request to enter final judgment so it can appeal the ruling to the Second Circuit. Another round of appellate court watching and reading of tea leaves anyone?

Meanwhile, on the Left Coast, the California Legislature is at it again. The Legislature broke all speed records by passing the California Consumer Privacy Act only one week after the proposed legislation was introduced. The landmark law creates significant privacy rights for California residents and enormous operational and compliance challenges for impacted businesses. Not surprisingly given the speedy work, amendments are already on the Governor’s desk for signature.

Taking its time in the spotlight, the Senate Banking Committee narrowly approved Kathy Kraninger’s nomination to head the CFPB. The nomination now moves on to the full Senate for a vote.

If you missed these or any of the other developments during your well-deserved vacation, read on for news on the Beltway, the Bureau, mortgage, privacy, TCPA, and more.

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