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MoFo Reenforcement

The Enforcement Blog

CFPB Releases Final Payday Lending Rule

Posted in CFPB, Payday Lending, Regulatory Developments

On October 5, 2017, the CFPB released its final rule for short-term loans. The nearly 1,700 page rule appears to follow the proposed short-term lending rule with several notable changes. Most notably, the CFPB did not finalize rules relating to underwriting requirements for long-term loans that do not have balloon payments.

Read our client alert.

OCC Acting Comptroller Woos Fintech Companies with Remarks on Online Lending

Posted in Regulatory Developments

On September 25, 2017, Acting Comptroller of the Currency Keith Noreika discussed online lending and innovation in his keynote remarks prepared for delivery to the Online Lending Policy Summit in Washington, D.C. Consistent with his previous remarks, the Acting Comptroller expressed his support for a regulatory environment that fosters responsible innovation and touted the growth of online and marketplace lending as “the natural evolution of banking itself.”

Read our client alert.

Equifax Fallout: NYDFS Acts Again

Posted in Privacy, State Regulators

The massive Equifax breach continues to prompt responses from a wide-range of regulators. While this is not surprising in light of the scale and nature of the incident, a number of regulators are taking more aggressive and more public actions in just a short time following public announcement of the breach. While there is a long history of various regulators taking action following high-profile breaches, the speed of the regulatory response has been unique when compared with other high-profile breaches that have occurred in the past five years. For example, while multistate Attorney General (“AG”) investigations and settlements are becoming the norm, the Massachusetts AG has already filed suit against Equifax.

Read our client alert.

EVENT: PLI Webinar – Shadow-Boxing in 2017: An Update on Shadow Banking Reform

Posted in Events

Tuesday, September 26, 2017
12:00 p.m. – 1:00 p.m. EDT
5:00 p.m. – 6:00 p.m. BST

The Financial Stability Board has been spearheading a review of “shadow banking” entities and activities since the onset of the financial crisis. Pursuant to the FSB’s work, many regulatory reforms have been introduced at both national and international level in a wide-range of different areas. At the recent G-20 meeting in Germany, the FSB published an assessment of present shadow banking activities and the adequacy of reforms and policy tools that have been introduced since the financial crisis. Issues to be covered during the presentation include:

  • Current aspects of shadow banking giving most concern to the G20;
  • Money market fund regulation and recent MMF Regulation finalized by the European Union;
  • Repos and effect of recent reforms;
  • Investment funds exposed to shadow banking risks; and
  • Impact of crowdfunding and peer to peer lending growth.


PLI will provide CLE credit.

For more information, or to register, please click here.

Leading on Leads? CFPB Takes Action Against Online Lead Aggregators

Posted in CFPB, Enforcement Actions, Payday Lending, Privacy, UDAAP

On September 6, 2017, the CFPB announced that it has taken action against an online lead aggregator. The allegations revolved around the company’s selling personal information of consumers who were interested in small-dollar or installment loans to online lenders. It was alleged that the loans ultimately offered to consumers were, or were likely to be, void in a consumer’s state of residence, meaning that the lender had no legal right to collect the loans. According to the CFPB’s consent order, the loans were void in whole or in part because of licensing requirements or interest rate limitations in the consumer’s state.

Read our client alert.

CFPB Makes HMDA Data Sharing Proposal

Posted in CFPB, Mortgage

The CFPB announced on Wednesday, September 20th, 2017, proposed guidance to limit the Home Mortgage Disclosure Act (HMDA) data it shares publicly. The Bureau’s 2015 HMDA amendments (discussed in our alerts here and here) revamped HMDA’s coverage and processes, including requiring lenders to report vast swaths of new data about mortgage applicants and their loans. At the time, the Bureau said that it was still considering what portion of that data it would share with the public. It expressed sensitivity to the privacy and data security concerns implicated by gathering and maintaining such large amounts of personal data, which include applicant and borrower addresses, loan amounts, and credit scores, and sought public comment. In response, many consumer advocates and lenders expressed concern with sharing such sensitive information and urged the CFPB to limit the public sharing of that data.

Now, almost two years later, the CFPB has made its proposal. The Bureau would eliminate more than a dozen data and text fields—including the applicant or borrower’s property address, credit score(s), and race and ethnicity—from the HMDA data it publicly discloses. It is proposing a compromise on other data fields by making them less precise. For example, rather than publishing a borrower’s loan amount and property value, it would “disclose the midpoint for the $10,000 interval into which the reported value falls.” And rather than disclosing the borrower’s age, the Bureau would publish a range (under 25, 25 to 34, 35 to 44, etc…).

The comment period ends 60 days after the proposal is published in the Federal Register, and the update will take effect on January 1, 2018.

A First Time for Everything—CFPB Issues Its First No-Action Letter

Posted in CFPB, Disparate Impact, Fair Lending

The CFPB recently announced the issuance of its first no-action letter (“NAL”) to Upstart Network, Inc., an online lending platform that uses alternative data to model consumer credit decisioning and pricing. The letter signifies that the CFPB has no present intention to recommend an enforcement or supervisory action against Upstart for violation of the Equal Credit Opportunity Act. This NAL comes as the Bureau “continues to explore the use of alternative data to help make credit more accessible and affordable for consumers who are credit invisible or lack sufficient credit history.” In addition, the NAL is issued in the midst of heightened regulatory interest in and scrutiny of alternative credit data and modeling techniques. The Bureau issued two related requests for information, one in November 2016 on data aggregation services and the other in February 2017 on the use of alternative data, modeling techniques, and machine learning techniques in consumer lending. The NAL tends to suggest that companies may have some flexibility in the use of alternative underwriting modeling to offer consumer credit; however, as noted in this alert, the practical utility of such NALs may be limited.

Read our client alert.

Financial Services Report – Fall 2017

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

Through hurricanes, wild fires, the publication of Hillary Clinton’s book, the birth of Amal and George Clooney’s twins, and the Dodgers’ historic losing streak, Director Richard Cordray and the CFPB’s Final Arbitration Rule are still standing. As my colleague Ollie Ireland explained, these days, it’s easier to predict the weather than it is to predict what will happen in Congress. So we wait.

To provide some distraction, focus on this: September is National Mortgage Professional Month. So say hello to your friendly neighborhood mortgage professional. For further distraction, we’ve packed this Report with all the blockbusters from the last quarter — read on for the latest in Privacy, Preemption, Arbitration, Mortgage, the CFPB, etc.

Read our newsletter.

EVENT: American Bar Association’s Eighth Annual National Institute on Consumer Financial Services Basics

Posted in Events

October 19-20, 2017
Waterview Conference Center
1919 N Lynn St.
Arlington, VA 22209

This educational institute is designed to expose practitioners to key areas of consumer financial services law. Key topics covered at the conference will include:

  • History and development of federal and state consumer financial services laws
  • Truth in lending and disclosure requirements
  • Fair lending
  • Financial privacy and credit reporting
  • Data security, fraud prevention, and identity theft protection
  • Consumer communications: FDCPA, TCPA, TSR, Can-Spam, and others
  • Asset account regulation
  • Mortgage origination and servicing
  • Litigation and enforcement actions

Senior Partner Rick Fischer will speak on the “Financial Privacy, Data Security and Cybersecurity” panel on Thursday, October 19.

Click here for more information and to register.