On January 21, 2020, twenty-two State Attorneys General and the Hawaii Office of Consumer Protection submitted a comment letter to the Office of the Comptroller of the Currency in opposition to its proposed rulemaking to resolve the “confusion” stemming from the Second Circuit’s 2015 decision in Madden v. Midland Funding LLC. Read our client alert.
In two recent actions, the California Department of Business Oversight (DBO) addressed whether companies that purchase retail installment contracts should be considered bona fide purchasers of credit sales or whether those transactions should be considered loans subject to the California Financing Law (CFL). In doing so, the DBO reiterates existing case law and sets forth… Read More
As we enter 2020, the payments and money transmission regulatory landscape continues to evolve on a state-by-state basis. Newly adopted regulations in Massachusetts affirm that “agent of a payee” transactions meeting certain criteria, as well as funds transfer services provided to business customers, are not subject to regulation under the state’s money transmission law. Additionally,… Read More
The California Department of Business Oversight (DBO) has issued a Release that summarizes the provisions of California Assembly Bill 539 and addresses some implementation issues. This bill was chaptered as Chapter 708 of the 2019 Statutes and is effective January 1, 2020. Our earlier Client Alert discussed the new law in detail. Read our client alert.
According to new guidance released on December 3, 2019, banks are not required to file suspicious activity reports on customers solely because they are engaged in the legal growth or cultivation of hemp. The guidance was issued by the federal banking agencies and the Financial Crimes Enforcement Network in consultation with the Conference of State… Read More
On November 19, 2019, the federal banking agencies issued a final rule that incorporates a new definition of an “HVCRE exposure” into the U.S. regulatory capital rules. The new definition is substantially that of an “HVCRE ADC loan” from Section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, enacted into law on… Read More
The Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation have taken steps to reaffirm the “valid when made” doctrine in response to Madden. We discuss the key takeaways from the agencies’ proposed rules and how this will affect all national banks and state banks. Read our client alert.
It seems like a natural progression for a company that provides any sort of payments-related information processing to migrate from handling data about payments to seeking to handle the payments themselves. But it can be a challenge for any company, particularly a younger one, to determine whether a payments-related service it wishes to offer —… Read More
As expected, California has enacted legislation imposing interest rate caps on larger consumer loans. The new law, AB 539, imposes other requirements relating to credit reporting, consumer education, maximum loan repayment periods, and prepayment penalties. The law applies only to loans made under the California Financing Law (CFL). Governor Newsom signed the bill into law on… Read More
On July 26, the California Department of Business Oversight (DBO) issued a draft regulation and draft disclosures to implement the state’s first-of-its-kind commercial financing disclosure law enacted last year. With this draft regulation, the DBO wades into uncharted waters in implementing the first law requiring disclosures of key terms in connection with certain commercial financings by non-banks. Read our client… Read More
We start this issue with a feeling of déjà vu all over again. Decisions made during the mortgage crisis are back in the news with a powerhouse legal ruling and the Treasury’s initial thinking on how to turn back time. First, the Fifth Circuit issued an en banc decision finding the Federal Housing Finance Agency… Read More
On August 20, 2019, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) approved a final rule which will amend the Volcker Rule to simplify and tailor compliance with Section 13 of the Bank Holding Company Act’s restrictions on a bank’s ability to engage in proprietary trading and… Read More
On August 20, 2019, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation approved significant amendments to the Volcker Rule regulations. These amendments address to some extent industry concerns about the complexity of the existing regulations and certain other aspects that have been seen as disruptive of markets. On the whole, the amendments… Read More
On August 16, the Federal Housing Finance Agency issued a final rule on validation and approval of third-party credit score models that Fannie Mae and Freddie Mac use in deciding whether to purchase residential mortgage loans. The FHFA is the GSEs’ prudential regulator and, since 2008, has served as their conservator. In doing so, the… Read More
At the direction of the Federal Housing Finance Agency (FHFA), government sponsored enterprises Fannie Mae and Freddie Mac (the GSEs) announced in June 2019 that the optional use period for the redesigned Uniform Residential Loan Application (URLA) and automated underwriting system (AUS) implementations would be postponed. FHFA has now directed the GSEs to make specific… Read More
On August 5, the Board of Governors of the Federal Reserve System issued a notice and request for comment on its determination that the Federal Reserve Banks should develop a new interbank faster payments system. The Reserve Banks’ new system — the “FedNow” service — would have a targeted launch date in 2023 or 2024…. Read More
On July 25, 2019, the CFPB issued an Advance Notice of Proposed Rulemaking on the definition of a “qualified mortgage” under its ability-to-repay/qualified mortgage rule. The ANPR states that the Bureau does not intend to extend the temporary qualified mortgage (QM) classification for loans eligible to be purchased or guaranteed by Fannie Mae or Freddie… Read More
On July 22, 2019, the five federal agencies tasked with the supervision, examination, and enforcement of Bank Secrecy Act and anti-money laundering requirements for banks issued a joint statement clarifying their risk-based approach to BSA/AML examinations. Our alert discusses the key implications of the Statement. Read our client alert.
On July 22, 2019, a final rule conforming the Volcker Rule regulations to Sections 203 and 204 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (“Regulatory Relief Act”) was published in the Federal Register. The final rule, and the provisions of the Regulatory Relief Act upon which it is based, exclude certain community banks… Read More
On July 11, Fannie Mae and Freddie Mac (the GSEs) announced their plans to develop new adjustable rate mortgage products that would rely on the Secured Overnight Financing Rate (SOFR) instead of LIBOR. Given the GSEs’ dominance in the mortgage market, their re-designed ARMs will undoubtedly have a significant impact on hybrid ARMs of the future…. Read More
The federal banking agencies released a notice of proposed rulemaking on July 12, 2019 which expands upon a previous notice of proposed rulemaking regarding the capital treatment of acquisition, development and construction loans. The new proposal addresses the capital treatment of certain loans that finance land improvements but do not finance the construction of residential… Read More
The California legislature is poised to cap rates on larger consumer installment loans. Assembly Bill 539 has passed the state Assembly and the state Senate Committee on Banking and Financial Institutions. Although directed only to California Financing Law (CFL) licensees, the bill has broader implications for consumer installment lending in California. Read our client alert.
The CFPB extended the deadline for public comments on its advance notice of proposed rulemaking (ANPR) relating to the Bureau’s 2015 Rule addressing the Home Mortgage Disclosure Act (HMDA). The ANPR, issued on May 2, requested comments by July 8, 2019, on whether the CFPB should revise the data points lenders must report under the… Read More
Recent Congressional activity reflects increasing concern in the fair lending implications of artificial intelligence (AI) in credit underwriting. Congress and regulatory agencies are likely to press financial services providers to better understand the AI they use and to ensure that its use does not result in unfair treatment of minorities and other protected groups through the… Read More