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Category Archives: Regulatory Developments

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CFPB Requests Comment on Overdraft Rule

Posted in CFPB, Electronic Payments, Regulatory Developments

On May 15, 2019, the CFPB published a Request for Comment on the Regulation E provisions that require consumers to opt in to overdraft fees on one-time debit card and ATM transactions. The Request for Comment is made under the Regulatory Flexibility Act, which requires an agency to review rules within 10 years after their adoption…. Read More

CFPB Proposes New Rules to Modernize Debt Collection

Posted in CFPB, Regulatory Developments

On May 7, 2019, the Consumer Financial Protection Bureau (CFPB) issued proposed rules (“Proposed Rules”) under the Fair Debt Collection Practices Act (FDCPA) and its authority under the Dodd-Frank Act. If finalized, the Proposed Rules will be the first substantive regulations for debt collection practices since the FDCPA was enacted in 1977. The Proposed Rules would clarify the… Read More

Home Mortgage Disclosure Act Amendments: CFPB Issues Two Regulation C Releases

Posted in Fair Lending, Mortgage, Regulatory Developments

On May 2, 2019, the CFPB issued two releases related to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The CFPB released a notice of proposed rulemaking (NPRM) to adjust Regulation C’s loan volume thresholds that trigger HMDA and to make other changes. Comments are due 30 days after publication in the Federal… Read More

Could Strong Consumer Authentication Weaken Consumer Demand?

Posted in Electronic Payments, Regulatory Developments

From 14 September 2019, certain electronic and remote payments must be subjected to two-factor, or “strong customer authentication”, under regulatory standards covering the European Economic Area relating to the second EU Payment Services Directive, which took effect in January 2018. Retailers are uncertain whether these new European anti-fraud measures will cause consumers to abandon online… Read More

In a First, FinCEN Assesses Civil Money Penalty Against Peer-to-Peer Virtual Currency Exchanger

Posted in Enforcement Actions, Regulatory Developments

The Financial Crimes Enforcement Network (“FinCEN”) issued a press release announcing a civil money penalty for violations of the Bank Secrecy Act against Eric Powers, an individual who acted as a peer-to-peer virtual currency exchanger. The enforcement action is the first-ever penalty assessed by FinCEN against a peer-to-peer virtual currency exchanger. Our alert discusses this recent… Read More

Federal Reserve Proposes New Control Regulations

Posted in Regulatory Developments

The Board of Governors of the Federal Reserve System  released a proposed rule to revise regulations related to the determination of “control” under the Bank Holding Company Act (“BHC Act”) and the Home Owners’ Loan Act. The Proposed Rule would incorporate existing interpretations under the “controlling influence” prong of the control definition into Federal Reserve regulations and… Read More

Banking Agencies Propose a More Tiered Approach to Large Foreign Bank Supervision

Posted in Regulatory Developments

On April 8, 2019, the federal banking agencies released two proposals which, if adopted, would further tailor the approach to supervision of large foreign banking organizations (FBOs). For FBOs with a more significant U.S. presence, the proposals would establish categories for the application of requirements based on size and certain other risk-based indicators. These categories would… Read More

Federal Reserve and FDIC Issue Proposed Changes to Resolution Plan Requirements for Foreign and Domestic Banking Organizations

Posted in Regulatory Developments

On April 8 and 16, 2019, the Federal Reserve and the FDIC published proposed changes to resolution plan (or “living will”) requirements applicable to U.S. and foreign banking organizations. The regulatory changes are necessary because the 2018 Regulatory Relief Act raised the asset thresholds for applicability of the living will requirements. The proposal would apply different… Read More

Unanimous but Narrow SCOTUS Ruling on Fair Debt Collection Practices Act

Posted in Foreclosure, Mortgage, Regulatory Developments

On March 20, 2019, the Supreme Court unanimously ruled in Obduskey v. McCarthy & Holthus LLP that a business engaged in non-judicial foreclosure is not subject to all of the requirements and prohibitions applicable to “debt collectors” under the Fair Debt Collections Practices Act. We discuss The Supreme Court’s decision and how this ruling is… Read More

Financial Services Report – Spring 2019

Posted in Arbitration, 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

In the words of Willie Wonka: “Wait a minute — strike that, reverse it!” As loyal readers will recall, in our last issue, we tried to stay current in referring to the CFPB by what Mick Mulvaney declared would be its new name: the Bureau of Consumer Financial Protection. Well, what a difference a director… Read More

California Invites Comments on Agent of a Payee Exemption—Rulemaking to Follow

Posted in Regulatory Developments

The California Department of Business Oversight (“DBO”) has issued an Invitation for Comments relating to the scope of the “agent of a payee” exemption under the Money Transmission Act, Cal. Fin. Code § 2000 et seq. Comments are due on April 9. According to the DBO, it is seeking comments because it intends to develop… Read More

CFPB Proposes Revisions to Small-Dollar Loan Rule

Posted in CFPB, Regulatory Developments

On February 6, 2019, amidst strong opposition from representatives of consumer groups and some members of Congress, the Consumer Financial Protection Bureau (CFPB) issued a proposed rule to revise its controversial November 2017 small-dollar loan rule (2017 Rule). The proposed rule would effectively rescind the 2017 Rule’s requirement that lenders determine a borrower’s ability to… Read More

CFPB Issues FAQs for the TRID Rule

Posted in CFPB, Regulatory Developments

The Consumer Financial Protection Bureau (CFPB) recently posted a new compliance tool on its website – answers to frequently asked questions (FAQs) about the TILA-RESPA Integrated Disclosure Rule (“TRID Rule”). The FAQs were posted without advance notice or comment, signaling that perhaps the CFPB will dispense with lengthy processes when providing written guidance. What follows is a… Read More

CFPB Initiates Fourth Review of the Consumer Credit Card Market

Posted in CFPB, Credit Cards, Regulatory Developments

On January 31, 2019, the Consumer Financial Protection Bureau published a Request for Information regarding the consumer credit card market. In accordance with Section 502(a) of the CARD Act, the Bureau conducts a biennial review of the consumer credit card market by soliciting public comment and feedback. In the past, the Bureau has used these… Read More

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… Read More

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… Read More

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… Read More

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… Read More

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… Read More

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… Read More

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… Read More

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… Read More

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… Read More

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… Read More