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Tag Archives: Financial Services Regulatory

Attorneys General Push Against OCC’s Attempts to Codify “Valid When Made” Rule

Posted in Credit Cards, Regulatory Developments

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.

California Regulator Reiterates that Credit Sales Cannot be Used to Evade Financing Law

Posted in Regulatory Developments

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

The DBO Notifies CFL Lenders of New Rate and Other Limitations Imposed by AB 539

Posted in Regulatory Developments

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.

Federal Regulators Issue Joint Guidance on Banking Hemp-Related Businesses

Posted in Regulatory Developments

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

After Madden, OCC and FDIC Propose to Reaffirm “Valid When Made” Rule

Posted in Regulatory Developments

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.

Is Payroll Processing Money Transmission? New York May Be Weighing In

Posted in Electronic Payments, Regulatory Developments, State Regulators

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

California Enacts Interest Rate and Other Restrictions on Consumer Loans

Posted in Credit Reports, Regulatory Developments

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

Amendments to Volcker Rule Regulations

Posted in Regulatory Developments

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

FHFA Publishes Final Rule on Validation and Approval of Credit Score Models

Posted in Mortgage, Regulatory Developments

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

On Again, Off Again: Fannie and Freddie Drop the Applicant’s Language Preference Question from the Revised Uniform Residential Loan Application Form

Posted in Mortgage, Regulatory Developments

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

Federal Reserve to Create Faster Payments System

Posted in Electronic Payments, Regulatory Developments

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

CFPB ANPR on Qualified Mortgage Rule

Posted in Mortgage, Regulatory Developments

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

Another Joint Statement from the Federal Anti-money Laundering Working Group: Improving Transparency of Risk-Focused BSA/AML Supervision

Posted in Regulatory Developments

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.

Agencies Issue Final Rule Conforming Volcker Rule Regulations to 2018 Regulatory Relief Act

Posted in Regulatory Developments

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

Secured Overnight Financing Rate and the Future of the Mortgage Market

Posted in Mortgage, Regulatory Developments

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

Federal Banking Agencies Release New NPR Expanding HVCRE Proposed Rule

Posted in Mortgage, Regulatory Developments

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

Assembly Bill 539 and the Future of Consumer Loans in California

Posted in Regulatory Developments

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.

CFPB Announces Public Comment Extension on HMDA Reconsideration

Posted in CFPB, Mortgage, Regulatory Developments

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

Policy Makers Examine the Disparate Impact Risk of Artificial Intelligence and Underwriting

Posted in Fair Lending, Regulatory Developments

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

Take Two: Are You a Money Transmitter in Vermont?

Posted in Electronic Payments, Regulatory Developments

Last year, we noted that the Banking Department of the Vermont Department of Financial Regulation had taken the position that its money transmission law “does not exempt a payment processor or an agent of a payee from [money transmission] licensure.” Vermont’s Governor now has signed legislation that creates a statutory exemption from the money transmission… Read More

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

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