Thought Leadership

Regulatory Highlights

Read highlights about the key regulatory updates and explore more information on each.

Regulation CC Quinquennial Inflation Adjustments for Funds Availability

The Federal Reserve Board and the CFPB have issued the second quinquennial set of inflation adjustments for Regulation CC funds availability thresholds, effective July 1, 2025. These adjustments reflect a 21.8% increase in the CPI-W from July 2018 to July 2023. The new amounts are as follows:

  • "Next day" minimum availability amount increases from $225 to $275
  • Cash withdrawal amount in § 229.12(d) increases from $450 to $550
  • New account, large deposit, and repeatedly overdrawn thresholds in §229.13 increase from $5,525 to $6,725
  • Civil liability minimum and maximum for individual actions in §229.21(a)(2)(i) increase from $100 and $1,100 to $125 and $1,350
  • Civil liability maximum for class actions in § 229.21(a)(2)(ii)(B) increases from $552,500 to $672,950 or 1% of the bank's worth, whichever is less

These changes require (per § 229.18(e)) banks to notify affected consumer account holders within 30 days of the effective date, even though the changes are mandated by regulation.

For more information, visit:

CFPB Distributes $384 Million to Victims of Think Finance's Illegal Lending Practices

The CFPB announced it has distributed over $384 million to approximately 191,000 consumers harmed by Think Finance, an online lender based in Texas. Think Finance deceived borrowers into repaying loans they did not owe, violating state laws on interest rate caps and lender licensing. The funds were sourced from the CFPB's victims relief fund, which has now distributed over $1 billion to consumers affected by scams, fraud, and illegal practices.

For more information, visit:

Judge Temporarily Halts CFPB Rule Lowering Credit Card Late Fees

A federal judge in Texas has issued a temporary nationwide injunction delaying the CFPB's rule reducing the maximum late fee on credit card accounts. The rule was set to take effect on May 14, 2024, but will now be postponed due to the injunction.

For more information, visit:

CFPB Report Highlights Consumer Frustrations with Credit Card Rewards Programs

The CFPB has released an Issue Spotlight report titled "Credit Card Rewards," highlighting numerous consumer frustrations with credit card rewards programs. The report details complaints that rewards are frequently devalued or denied despite consumers meeting program terms. Additionally, credit card companies are criticized for focusing marketing on rewards rather than low interest rates and fees. Consumers carrying revolving balances often pay more in interest and fees than they receive in rewards. The report also notes that rewards programs are sometimes used as a "bait and switch," with vague terms, fine print, and changing reward values. The rise of co-brand credit cards and transferable rewards has further complicated issues.

For more information, visit:

Fed Summary of Pilot Climate Scenario Analysis Exercise

The Federal Reserve Board has released a summary of its exploratory pilot Climate Scenario Analysis (“CSA”) exercise with six of the nation’s largest banks: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. The summary outlines how these banks are using CSA to assess their business models' resilience to climate-related financial risks, considering various physical and transition risk scenarios. The exercise revealed data gaps and modeling challenges in estimating financial impacts of complex and uncertain risks over different time horizons. The exercise was exploratory and has no capital consequences. The Board will continue to engage with these banks to enhance their capacity to measure and manage climate-related financial risks.

For more information, visit:

Financial Stability Oversight Council (“FSOC”) Releases Report on Nonbank Mortgage Servicing

FSOC has released its Report on Nonbank Mortgage Servicing, detailing the sector's growth and its vital role in the mortgage market. The report highlights key vulnerabilities that could hinder nonbank mortgage servicers' operations and amplify shocks to the mortgage market, posing risks to financial stability. The FSOC offers recommendations to enhance the sector's resilience, leveraging existing state and federal regulatory authorities, and calls on Congress to address identified risks. The report, coordinated with Ginnie Mae, underscores that current regulatory measures are insufficient to mitigate these risks comprehensively.

For more information, visit:

HUD and Rocket Mortgage Settle Fair Lending Complaint

HUD has announced a Conciliation Agreement with Rocket Mortgage, LLC, resolving allegations of racial discrimination in mortgage lending. The complaint involved a couple who were denied a mortgage loan for a home within the Flathead Indian Reservation in Montana. As part of the settlement, Rocket Mortgage will compensate the complainants with $65,000, provide fair lending training to employees, and adhere to fair lending standards for applicants on Native American reservations. Rocket Mortgage will also invest $30,000 in programs to improve housing conditions and financial literacy for Native Americans and conduct outreach about financing options for properties on reservations.

For more information, visit:

CFPB Study Reveals Higher Costs with Complex Pricing

CFPB has found that complex pricing structures lead consumers to pay more. Research involving simulated market experiments showed that when prices are split into multiple components, it becomes harder for consumers to compare options effectively, resulting in higher overall costs. While not expected to exactly mirror real-world transactions, the CFPB found in these experiments that more complex pricing generally led to more detrimental outcomes for consumers:

  • Higher total prices: Sellers' total asking prices were 60 percent higher in markets with 16 sub-prices than in those with one price.
  • Comparing prices was more difficult: Buyers were 15 times more likely to select a higher-priced option in markets with 16 sub-prices than in those with one price.
  • Consumers paid more overall: Transaction prices were 70 percent higher in markets with 16 sub-prices than in those with one price, on average. The CFPB has previously highlighted how the use of complex terms and pricing can pose challenges for consumers. In many instances, consumers face complex pricing when shopping for financial products and services including credit cards, checking and savings accounts, mortgages, and auto loans.

For more information, visit:

Pennsylvania Bank Closed and Assets Assumed by Fulton Bank

The Pennsylvania Department of Banking and Securities has closed Philadelphia-based Republic First Bank (doing business as Republic Bank), appointing the FDIC as the receiver. In response, the FDIC arranged for Fulton Bank, National Association, from Lancaster, Pennsylvania, to assume nearly all deposits and purchase most assets of the troubled bank. As of January 31, Republic Bank reported assets of approximately $6 billion and deposits totaling $4 billion. The closure's estimated cost to the Deposit Insurance Fund is $667 million, with Fulton Bank’s acquisition deemed the least costly resolution. This marks the first U.S. bank failure of the year, following the last closure of Citizens Bank in Iowa in November 2023.

For more information, visit:

Consumer Compliance Outlook: First 2024 Issue Now Available

The Federal Reserve System has released the first 2024 issue of Consumer Compliance Outlook, now accessible on their official webpage. This issue encompasses a range of topics critical to compliance officers, including:

  • An overview of Private Flood Insurance Compliance Requirements
  • Consumer Compliance Requirements for Commercial Products and Services
  • Compliance Spotlight: Resources to Combat Increased Check Fraud
  • Recent Supervisory Data for Institutions the Federal Reserve Supervises and more

For more information, visit:

FHFA Releases Final Fair Lending Rule

FHFA has issued its Fair Lending, Fair Housing, and Equitable Housing Finance Plans Final Rule, including updates for 2024 and performance reports for 2023 from Fannie Mae and Freddie Mac. This rule formalizes FHFA’s fair lending oversight for these entities and the Federal Home Loan Banks, integrating requirements for collecting detailed consumer information and introducing new reporting standards for the Federal Home Loan Banks.
The regulation takes effect 60 days post-publication in the Federal Register, exceptfor subpart D of the regulation, which becomes effective February 15, 2026.Additionally, the FHFA plans to gather public input through a Request for Input anda listening session scheduled for June 2024, aiming to refine the next three-yearEquitable Housing Finance Plans set for release in January 2025.

For more information, visit:

CFPB Releases Supervisory Highlights on Mortgage Servicing

CFPB has published the 33rd issue of its Supervisory Highlights, focusing on examinations of mortgage servicing practices from April to December 2023. The report uncovers ongoing issues with mortgage servicers, including the assessment of junk fees such as unnecessary property inspection fees and improper late fees. Additionally, the findings reveal practices that fall under unfair, deceptive, or abusive acts or practices (“UDAAP”), including deceptive notices about loss mitigation eligibility. The report also notes several violations of Regulation X’s loss mitigation rules by mortgage servicers.

For more information, visit:

Bureau Updates Procedure for Nonbank Designations for Supervision

The CFPB has announced an update to its procedural rule on how the agency designates a nonbank for supervision. The updates will streamline the designation proceedings for both the CFPB and nonbanks. The updated process reflects changes to the CFPB’s organizational structure and is informed by the CFPB’s experience with the first round of supervisory designation proceedings under procedures issued in 2013. CFPB is seeking comments on its updated procedures and the comments will be accepted through May 23, 2024.

For more information, visit:

FinCEN Calls for Increased Vigilance Against Environmental Crimes

FinCEN has urged financial institutions to intensify their efforts to identify and report environmental crimes, particularly around Earth Day. Highlighting the relationship between these crimes and issues like corruption and human trafficking, FinCEN emphasizes the need for robust Anti-Money Laundering (“AML”) and Countering the Financing of Terrorism measures. The agency has provided guidelines and resources, including specific Suspicious Activity Report filing instructions, to help institutions combat environmental crimes such as wildlife trafficking and illegal resource extraction.

For more information, visit:

FinCEN Issues Analysis on Elder Financial Exploitation (“EFE”)

FinCEN has released a Financial Trend Analysis identifying patterns in EFE using data from Bank Secrecy Act (“BSA”) reports filed between June 15, 2022, and June 15, 2023. During this period, 155,415 filings noted approximately $27 billion in EFE-related suspicious activities. The analysis categorized EFE into elder scams and elder theft, with scams making up about 80% of cases, often involving money transfers to imposters, and theft about 20%, typically committed by trusted individuals like family members. The findings underscore the prevalence and methods of financial abuse targeting older adults.

For more information, visit:

FinCEN Updates Beneficial Ownership Information (“BOI”) FAQs

FinCEN has updated its BOI FAQs, adding new questions and information on topics such as reporting companies and trusts. The updates expand on several key areas including the specifics of reporting for companies, the intricacies of beneficial ownership through trusts, and the protocols for accessing beneficial ownership data. These enhancements aim to clarify compliance expectations and provide detailed guidance for entities required to navigate the complexities of beneficial ownership reporting.

For more information, visit:

FDIC Strategy for GSIB Resolution

The FDIC has released a new report that explains how it will manage the resolution of a global systemically important bank, should the situation arise. The paper stresses that the FDIC will hold management responsible for the failure, allocate losses to shareholders and creditors, and return assets and viable operations to private sector control as soon as possible. The report also states that consistent with statutory obligations, all losses would be borne by the private sector, primarily the GSIB’s former shareholders and unsecured creditors, and not taxpayers.

For more information, visit:

AI-Fueled Cyber Threats

A new 51-page Treasury Department report based on interviews with banking industry experts and, including an overview of current use cases, best practices recommendations, challenges and opportunities given the current environment. Section 5.5 of the report includes a list of questions that banks should consider asking their vendors that offer AI systems, or products and services relying on AI systems.

For more information, visit:

Federal Court Issues Last-Minute Stay on CRA Rewrite

A Texas federal judge has halted the enforcement of the revised Community Reinvestment Act (“CRA”) regulations, delaying their implementation which was scheduled for April 1, 2024. The ruling by Judge Matthew J. Kacsmaryk asserts that the Federal Reserve, FDIC, and OCC exceeded their authority with the October final rules, challenging the 1977 CRA's framework. This decision comes in response to a lawsuit filed by the ABA, the U.S. Chamber of Commerce, and other associations, effectively pausing all related regulatory changes until the lawsuit's conclusion.

For more information, visit:

CFPB Issues Consumer Response Annual Report

The CFPB's 2023 Consumer Response Annual Report reveals that over 1.3 million complaints were forwarded to more than 3,400 companies for resolution last year. A significant portion of these complaints, exceeding one million, targeted the three major consumer reporting agencies: Equifax, Experian, and TransUnion, highlighting ongoing concerns with credit or consumer reporting. Additionally, the report notes a rise in complaints across various product categories, including fraudulent activities related to debt collection, banking, and credit cards.

For more information, visit:

FinCEN Requests Comments on the Customer Identification Program (“CIP”) Rule's TIN Collection Requirement

FinCEN is seeking public input on the CIP Rule's requirement for banks to collect a taxpayer identification number (“TIN”) from U.S. persons before account opening. This inquiry, published in the Federal Register, focuses on the feasibility and implications of allowing banks to collect partial Social Security numbers (“SSNs”) from U.S. individuals, then using third-party sources to complete the SSN information. The aim is to understand the potential risks and benefits of modifying the TIN collection process under the CIP Rule. Comments will be accepted for 60 days, through May 28, 2024.

For more information, visit:

FDIC Releases Spring 2024 Supervisory Highlights

The FDIC has published its Spring 2024 Consumer Compliance Supervisory Highlights, detailing consumer compliance issues observed in 2023 among state non-member banks and thrifts. The report outlines the most common violations, regulatory developments, available compliance resources, and consumer complaint trends. Key findings include frequent violations related to TILA, FDPA, EFTA, TISA, and the FTC Act, with a notable shift in the frequency of FTC Act violations compared to the previous year.

For more information, visit:

FDIC Advisory on Customer Identification Program (“CIP”) Rule

The FDIC has issued an advisory through Financial Institution Letter FIL-15-2024, in conjunction with FinCEN's request for comments, to underscore the longstanding requirements of the CIP Rule. This rule mandates banks to collect specific identifying information from customers before opening an account, aiming to verify the customer's true identity. The advisory reiterates the necessity of gathering a customer's name, date of birth, address, and identification number, including a taxpayer identification number (“TIN”) for U.S. persons, as part of the bank's risk-based verification procedures.

For more information, visit:

Consumer Compliance Outlook: Combating Check Fraud

The first 2024 issue of Consumer Compliance Outlook focuses on combating check fraud, highlighting resources from the Federal Reserve System, FinCEN, the U.S. Postal Inspection Service, the ABA, and check service providers. This Compliance Spotlight aims to address the growing concern of check fraud through collaborative efforts and available resources.

For more information, visit:

Acting Comptroller Discusses Elevating Fairness in Banking

The OCC's Acting Comptroller of the Currency emphasized the significance of fairness in the banking sector at the National Community Reinvestment Coalition Just Economy Conference 2024. Mr. Hsu commended banks for their advancements in overdraft protection programs following last April's OCC guidance and updated on Project REACh's success in addressing credit invisibles, supporting minority depository institutions, and promoting affordable housing. He also stressed the critical need for fairness concerning artificial intelligence and fraud prevention.

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Appraisal Subcommittee (“ASC”) Hearing Tackles Appraisal Bias and Foundation's Shortcomings

The CFPB highlights ongoing appraisal bias against minority homebuyers, criticizing The Appraisal Foundation's ability to address these issues. CFPB Director Rohit Chopra expressed concerns about the Foundation's conflict of interest policies, governance structure, and lack of transparency, questioning its effectiveness in combating discrimination in the appraisal process.

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FDIC Demands Three Companies Cease Misleading Statements About Deposit Insurance

The FDIC has issued cease and desist letters to PrizePool, Inc., AmeriStar, LLC, and HighLine Gold, LLC for making false claims about FDIC deposit insurance. These companies are accused of suggesting they are FDICinsured, misusing the FDIC name or logo, and misrepresenting the nature of deposit insurance, potentially harming consumers. AmeriStar and HighLine Gold, believed to be related entities, received a joint letter due to shared principals and addresses.

For more information, visit:

FinCEN Clarifies Customer Identification Program (“CIP”)/Customer Due Diligence (“CDD”) Requirements for IRA's Charitable Beneficiaries

FinCEN has issued a ruling on the CIP and CDD requirements for legal entity customers, specifically addressing the obligations of broker-dealers when opening new accounts for charitable beneficiaries of individual retirement accounts.

For more information, visit:

CFPB Shifts 'Junk Fees' Focus to Residential Mortgage Loans

The CFPB has signaled that it is extending its "junk fees" initiative to scrutinize the closing costs of residential real estate loans. Highlighting the disproportionate impact of fixed loan costs on borrowers with smaller mortgages, the Bureau notes that in 2022, the median total loan cost was nearly $6,000. This includes origination, appraisal, title insurance, and other fees, which notably affect lower income, first-time, and minority homebuyers. The Bureau is particularly concerned about the rise in discount points, with a significant increase in borrowers paying these fees in 2022 to lower interest rates. The CFPB suggests that lack of competition contributes to high and rising closing costs, pointing out that borrowers often have no choice in selecting service providers for certain fees, such as lender's title insurance and credit reports.

For more information, visit:

Trade Groups Sue CFPB to Stop Credit Card Late Fees Rule

The U.S. Chamber of Commerce, along with several trade groups, has filed a lawsuit against the CFPB to halt the implementation of its rule limiting credit card late fees. Filed in the Northern District of Texas, the lawsuit argues the CFPB exceeded its authority and misused confidential data, violating the CARD Act, Administrative Procedures Act (“APA”), and the Constitution's Appropriations Clause. The plaintiffs, including the American Bankers Association and Consumer Bankers Association, seek a preliminary injunction to prevent the rule's enforcement.

For more information, visit:

Fed Finalizes Rule for Financial Market Utilities (“FMUs”)

The Federal Reserve Board has finalized a rule updating risk management standards for key FMUs it oversees. These FMUs are crucial for the clearing and settlement of financial transactions, supporting both financial markets and the economy. The rule enhancements focus on operational risk management, including incident management, business continuity, third-party risk management, and operational risk measure testing. The aim is to clarify and specify existing protocols, with a notable emphasis on cyber resilience. FMUs have a timeline of 90 to 180 days post-publication in the Federal Register to comply with these updates.

For more information, visit:

CFPB/FTC Submit Amicus Brief Against Illegal Mortgage Fees

On February 27, 2024, the CFPB announced its collaboration with the Federal Trade Commission in submitting an amicus brief to the U.S. Court of Appeals for the Eleventh Circuit in the case of Glover and Booze v. Ocwen Loan Servicing, LLC. This legal action addresses Ocwen's practice of imposing fees for online or telephone payments that are not stipulated in the original debt agreement nor authorized by law. Glover and Booze, having successfully challenged these fees in a lower court, face Ocwen's appeal. The joint brief by the FTC and CFPB supports the plaintiffs, advocating for the appellate court to uphold the lower court's decision against the unlawful fee practice.

For more information, visit:

FinCEN Proposes Renewal of Information Collection Requirements

On February 26, 2024, FinCEN announced its intention to renew existing information collection requirements through two recent publications in the Federal Register without implementing any changes. On February 23, FinCEN sought to extend its authority on geographic targeting orders (GTOs) [89 FR 13802], crucial for the ongoing renewal of GTOs amidst deliberations on mandating nationwide Real Estate Reports for non-financed residential real estate transfers. Public comments for this notice are requested by April 23, 2024. Subsequently, on February 26, FinCEN proposed the continued enforcement of beneficial ownership requirements for legal entity customers [89 FR 14148] as outlined in 31 CFR 1010.230. This measure ensures banks maintain the practice of obtaining beneficial ownership certifications from entity customers until potential amendments are finalized, anticipated by the end of 2024. Stakeholders are invited to comment on this proposal by April 26, 2024.

For more information, visit:

1071 Compliance Costs Survey Reveals High Implementation Expenses

On February 26, 2024, a recent American Bankers Association (ABA) survey highlighted the significant costs associated with implementing section 1071 of the Dodd-Frank Act*, increasing the data reporting requirements for banks from 13 to 81 fields. Contrary to the CFPB's initial cost estimates of $44,800 to $77,800 for system development and process implementation, banks have reported one-time costs ranging from $112,685 to $7,474,186, with ongoing compliance costs between $71,944 and $2,010,125. These figures substantially exceed the CFPB's projections of $8,349 to $278,618, especially impacting smaller banks disproportionately. The discrepancy in cost estimates arises from the CFPB's survey, which focuses only on the one-time costs for reporting the originally mandated 13 data points.

For more information, visit:

*The implementation of the 1071 rule is on hold due to a nationwide injunction, awaiting a Supreme Court decision on the constitutionality of the CFPB's funding structure.

CFPB Orders Supervision for Installment Lender World Acceptance Corporation

On February 23, 2024, the CFPB issued a supervisory designation order to World Acceptance Corporation, marking the first time the Bureau has done so in a contested case. This decision follows the CFPB's determination that the installment lender meets the criteria for federal supervision. The process involved issuing a notice to World Acceptance Corporation, which had the option to consent to or contest the supervision. The CFPB's action is based on consumer complaints and other risk indicators but does not imply any wrongdoing by the company.

For more information, visit:

Bureau Proposes Limiting Overdraft Fees at Very Large Banks

On February 23, 2024, the CFPB officially published its proposal to regulate overdraft fees at very large financial institutions. Detailed in the Federal Register [89 FR 13852], the proposed rule aims to address and potentially limit these banks' overdraft lending practices. Stakeholders and the public are invited to submit their comments on the proposal by April 1, 2024.

For more information, visit:

FinCEN Issues Small Entity Compliance Guide for Beneficial Ownership Information (BOI) Access

On February 21, 2024, FinCEN released a Small Entity Compliance Guide to assist small entities, including financial institutions, understand the Beneficial Ownership Information Access and Safeguards Rule (Access Rule) requirements. This guide aims to provide a clear overview of how to access BOI from FinCEN, emphasizing that it is explanatory, does not alter statutory or regulatory obligations, and does not override more recent FinCEN guidance. FinCEN's BOI Reference Materials webpage provides the guide and additional resources on the Beneficial Ownership Information Reporting rules.

For more information, visit:

The FCC Clarifies TCPA Opt-Out Rules

On February 20, 2024, the FCC Introduced new rules to empower consumers to revoke consent from unwanted robocalls and robotexts more easily. These regulations require that such communications honor do-not-call and consent revocation requests within ten business days.

Echoing the FCC's 2015 decision, consumers can now revoke consent through any reasonable means, including replying with terms like "stop," "quit," or "unsubscribe." The FCC's ruling also reaffirms its 2012 decision that a one-time confirmation text message following an opt-out request is compliant, provided it contains no marketing content. Additionally, the FCC is seeking public input on the application of the TCPA to communications from wireless providers to their subscribers and the ability for consumers to revoke consent for these messages.

The new order will take effect 30 days after its publication in the Federal Register, with some exceptions.

For more information, visit:

Court Bans Mortgage Relief Scam Operators

On February 16, 2024, the FTC announced that a federal court issued a ban against the operators of the Home Matters U.S.A. mortgage relief scam from engaging in telemarketing and debt relief businesses. This comes after a FTC and the California Department of Financial Protection and Innovation (DFPI) lawsuit, which also mandates the operators to pay $19 million. The lawsuit targeted companies like Home Matters U.S.A., Academy Home Services, and others, led by Michael R. Nabati, Armando Solis Barron, Dominic Ahiga, and Roger S. Dyer, for defrauding homeowners with false promises of mortgage payment reductions and foreclosure prevention. The scam affected over 3,000 individuals nationwide, including many elderly and veterans.

For more information, visit:

Agencies Issue Shared National Credit (SNC) Program Report

On February 16, 2024, The Federal Reserve Board, OCC, and FDIC released the 2023 SNC Report, indicating that the credit quality of large, syndicated bank loans is moderate but showing signs of decline due to higher interest rates and tighter operating margins in specific sectors. Leveraged loan risks are highlighted as high, with specific industries such as technology, telecom and media, health care and pharmaceuticals, and transportation services facing elevated risks. The real estate and construction sector shows mixed trends, with some sub-sectors experiencing deterioration while others see stability or improvement. Industries previously impacted by the pandemic, like transportation services and entertainment/recreation, are noted for their significant recovery. The review, covering loans originated by June 30, 2023, concentrated on leveraged loans and borrowers under stress across various sectors.

For more information, visit:

CFPB Report: Large Banks Charge Higher Credit Card Rates Than Small Institutions

On February 16, 2024, CFPB published a report from its updated Terms of Credit Card Plans survey, indicating that large banks impose higher credit card interest rates compared to small banks and credit unions, irrespective of credit risk. According to the CFPB, the top 25 credit card issuers apply rates 8 to 10 points higher than those of smaller institutions, potentially costing the average cardholder an additional $400 to $500 in annual interest. The survey encompasses data from all general-purpose credit cards issued by the largest 25 credit card issuers in the U.S. and a sample from small- and medium-sized banks and credit unions nationwide.

For more information, visit:

CFPB Revises Supervisory Appeals Process

On February 16, 2024, the CFPB updated its procedural rule for the supervisory appeals process, allowing financial institutions to contest supervisory findings more effectively. The revision expands the pool of CFPB officials who can review appeals, introduces more resolution options, and broadens the scope of appealable matters.

Here are the key changes:

  • The formation of an appeals committee by the supervision director, consisting of three CFPB managers with relevant expertise who were not involved in the original matter, was supported by attorneys from the general counsel's office.
  • This appeals committee can now remand matters to reconsider findings alongside the existing options of upholding or rescinding them.
  • Financial institutions can appeal any compliance rating or finding, not just adverse ones, enhancing the fairness and transparency of the supervisory process.

For more information, visit:

FTC Finalizes Rule on Impersonation, Proposes AI Protections

On February 15, 2024, the FTC finalized the Trade Regulation Rule on Impersonation of Government and Businesses (16 CFR Part 461), outlawing the impersonation of government entities, businesses, and their representatives in interstate commerce as deceptive acts. Set to take effect 30 days post-publication in the Federal Register, this rule aims to curb deceptive practices. Additionally, the FTC introduced a supplemental notice of proposed rulemaking to expand the rule, proposing to ban the impersonation of individuals and to hold liable those providing goods or services used in such impersonations. This amendment, motivated by rising impersonation fraud and the potential misuse of AI technology like deepfakes, seeks to protect consumers and individuals from harm. Public comments on the proposed amendments are invited for 60 days after publication in the Federal Register.

For more information, visit:

FinCEN Proposes AML/CFT Requirements for Investment Advisers

On February 15, 2024, FinCEN announced a Notice of Proposed Rulemaking (NPRM) that will require certain investment advisers to adhere to Anti-Money Laundering and Countering the Financing of Terrorism ("AML/CFT") protocols under the Bank Secrecy Act ("BSA"). This rule mandates registered investment advisers and exempt reporting advisers to the SEC to establish risk-based AML/CFT programs, report suspicious activities, and comply with recordkeeping obligations. By classifying these advisers as "financial institutions" under the BSA, the rule aims to close gaps in AML/CFT coverage across the sector, preventing illicit finance practices. FinCEN also proposes delegating examination authority to the SEC, leveraging its regulatory expertise. This move follows a Treasury risk assessment highlighting the sector's vulnerabilities to illicit finance.

Public feedback is invited until April 15, 2025.

For more information, visit:

FinCEN Proposes AML Regulations for Residential Real Estate Transfers

On February 15, 2024, FinCEN announced a proposed rule in the Federal Register mandating reporting and recordkeeping for non-financed residential real estate transfers to legal entities and trusts. This rule aims to combat money laundering by requiring Real Estate Reports for certain transactions, excluding direct transfers to individuals. The initiative is designed to enhance the Treasury and law enforcement's ability to address illicit finance vulnerabilities in the residential real estate sector. The proposed rule exempts involved parties from the Bank Secrecy Act's anti-money laundering program requirements, except for financial institutions obligated to establish such programs.

Public comments are invited until April 16, 2024.

For more information, visit:

OCC Announces 2024 Workshops for Bank Directors and Senior Managers

On February 14, 2024, the OCC opened registration for its 2024 in-person workshops for directors and senior management of national community banks and federal savings associations. These examiner-led sessions are designed to enhance community-based financial institutions' operational safety and soundness through practical training and guidance. The OCC's curriculum includes five daylong workshops on management development, risk governance, compliance, credit risk, operational risk, and a half-day workshop on capital markets. Each workshop, capped at 35 participants, offers attendees comprehensive course materials, supervisory publications, and lunch.

Details on schedules, locations, registration fees, and fee waivers are accessible on the OCC's website:

Treasury Enhances Financial Transparency

On February 14, 2024, the Treasury Department announced initiatives to boost financial transparency and combat illicit finance, focusing on the implementation of the Anti-Money Laundering Act and Corporate Transparency Act. Efforts include:

  • Beneficial ownership reporting.
  • A rulemaking notice to increase transparency in real estate transactions.
  • New AML/CFT requirements for investment advisers.

These measures, part of the Administration's anti-corruption strategy, are supported by the 2024 National Risk Assessments on Money Laundering and Terrorist Financing.

For more information, visit:

FFIEC Issues Statement on Valuation Bias in Residential Lending

On February 12, 2024, the FFIEC, representing the Federal Reserve Board, FDIC, OCC, CFPB, NCUA, and the State Liaison Committee, released a Statement on Examination Principles Related to Valuation Discrimination and Bias in Residential Lending. Aimed at mitigating risks of discrimination or bias and ensuring credible valuations in residential real estate lending, the statement emphasizes the importance of real estate valuations in underwriting and the potential for valuation discrimination or bias to harm consumers and communities. It outlines the role of examiners in assessing compliance and risk management practices to identify and mitigate such biases. Institutions are encouraged to establish formal valuation review programs to detect and address deficiencies, supported by the Interagency Appraisal and Evaluation Guidelines.

The statement clarifies that it is not new guidance but provides transparency into the examination process and supports risk-focused examination work.

For more information, visit:

CFPB Secures $12M from Foreclosure Relief Scam Leaders

On February 8, 2024, the CFPB successfully concluded an enforcement action against the operators of a foreclosure relief scam, securing $12 million for consumer redress and penalties. The scam, led by Consumer First Legal Group, LLC and attorneys Thomas G. Macey, Jeffrey J. Aleman, Jason Searns, and Harold E. Stafford, involved charging illegal advance fees to homeowners in financial distress for unprovided legal services. This resolution is the culmination of a multi-agency crackdown initiated in 2014 involving the CFPB, FTC, and 15 states. The settlement includes $10.9 million for consumer redress and a $1.1 million penalty, with the defendants also facing industry bans of 8 or 5 years.

For more information, visit:

NCUA to Review CU Overdraft (OD) and Non-Sufficient Funds (NSF) Fee Income and More

On February 7, 2024, NCUA Chairman Todd M. Harper announced at the Brookings Institution that the NCUA will scrutinize credit union compliance with consumer protection laws, focusing on OD and NSF fees. The 2024 review will assess overdraft programs, advertising, balance calculation, and settlement processes, targeting fees that are not reasonable or proportional, systems that authorize overdrafts but settle accounts with insufficient funds, and the imposition of multiple fees in a single day. Additionally, the NCUA plans to increase fair lending examinations, ensure non-discriminatory policies, review flood insurance compliance, and emphasize Bank Secrecy Act compliance and support for small and minority depository institutions.

For more information, visit:

Banking Groups File Lawsuit Against CRA Reforms

On February 5, 2024, several banking associations, including the ABA and U.S. Chamber of Commerce, sued the OCC, Federal Reserve, and FDIC to block the new CRA regulations, arguing the agencies exceeded their authority with the October 2023 amendments. The lawsuit, filed in the Northern District of Texas, seeks to pause the implementation of these rules, claiming they unlawfully alter a system that has supported lending in underserved areas for decades.

For more information, visit:

January 2024 Senior Loan Officer Opinion Survey (SLOOS) Highlights

On February 5, 2024, The Federal Reserve's January Senior Loan Officer Opinion Survey (SLOOS) for Q4 2023 shows a tightening in bank lending standards and reduced demand across commercial, industrial, and real estate loans. While residential real estate lending standards remained stable for government and GSE-eligible mortgages, demand fell in all residential categories, including home equity lines of credit and consumer loans. Despite an overall tightening, the extent was less than in the previous quarter. Looking ahead to 2024, banks expect lending standards to stay the same for commercial and residential loans but to tighten for commercial real estate, credit card, and auto loans. Demand is anticipated to rise across all loan types, with a forecasted decline in loan quality.

For more information, visit:

FinCEN Proposes AML Rules for Real Estate

On February 7, 2024, FinCEN announces a proposed rule to combat money laundering in the U.S. residential real estate sector, targeting non-financed property transfers to legal entities and trusts. Set for publication on February 16, 2024, the rule outlines reporting and record-keeping requirements for real estate closings and settlements, excluding direct transfers to individuals. Aimed at closing illicit finance gaps, the rule supports Treasury and law enforcement efforts against money laundering through property purchases. Public feedback is invited until April 16, 2024.

For more information, visit:

FinCEN Requests Comments on Currency Transaction Reports (CTR) Renewal

On February 5, 2024, FinCEN announced a request for comments on renewing Currency Transaction Reports ("CTRs") requirements without changes [89 FR 7767]. Public feedback is invited until April 5, 2024.

For more information, visit:

Agencies Publish CRA Regulations Update

On February 1, 2024, the Federal Reserve Board, OCC, and FDIC published [89 FR 6574] the previously announced joint final rule updating their Community Reinvestment Act regulations.

On October 24, 2023, the Board of Governors of the Federal Reserve System (FRB), OCC, and FDIC approved revisions to the CRA regulations. The changes update the criteria for CRA activities' qualification, evaluation, and location. The rule tailors the CRA framework based on bank size and business model, classifying banks as large, intermediate, small, or limited purpose. Asset size thresholds will adjust annually for inflation. Key regulation objectives include:

  • Promoting credit access in low-to-moderate income areas.
  • Adapting to banking industry changes.
  • Ensuring clarity.
  • Tailoring evaluations to bank size/type.

The rule takes effect on April 1, 2024, with some provisions having specific applicability dates in 2026 and 2027. Banks will follow current CRA regulations until the new ones apply.

For more information, visit:

CFPB Proposes Rule to Prohibit Potential New Nonsufficient Funds (NSF) Fees

On January 24, 2024, CFPB proposed a new rule to prevent NSF fees on transactions declined in real-time, such as debit card purchases, ATM withdrawals, and some peer-to-peer payments. This rule covers banks, credit unions, and certain peer-to-peer payment companies. The CFPB is taking this step in anticipation of potential new NSF fees due to technological advancements enabling financial institutions to decline transactions instantly. The proposed rule, adding new Part 1042, "Nonsufficient Funds Fees," to Chapter X of Title 12 of the Code of Federal Regulations, deems such fees for real-time declined transactions abusive and unlawful under the Consumer Financial Protection Act.

Public comments are invited until March 25, 2024. The rule was published in the Federal Register [89 FR 6031] on January 31, 2024.

For more information, visit:

Latest Consumer Compliance Outlook Available

On February 01, 2024, the Federal Reserve announced the availability of the latest issue of "Consumer Compliance Outlook." The fourth issue of 2023 includes the following articles and features:

  • Top Federal Reserve Compliance Violations in 2022 Under the Fair Credit
  • Reporting Act and the Equal Credit Opportunity Act
  • Top Federal Reserve System Violations in 2022: Regulation E Error
  • Resolution Requirements and Regulation X Escrow Account Requirements
  • Interagency Overview of the Community Reinvestment Act Final Rule
  • Regulatory Calendar
  • Calendar of Events

For more information, visit:

FRB Financial Services Adds ACH Risk Management Service

On January 25, 2024, the Federal Reserve Financial Services introduced FedDetect Anomaly Notification for FedACH Services, a novel risk management service designed to assist financial institutions in detecting unusual activities. This service enhances fraud detection capabilities by providing secure email notifications when anomalous FedACH activity is identified. It aids financial institutions in identifying potential fraud attempts through account verification processes, including micro-entry return and forward-entry monitoring. Additionally, the service supports originating financial institutions in complying with Nacha rules regarding change notifications, thereby helping to prevent future rule violations.

For more information, visit:

FinCEN Seeks Comment on Info to Be Collected for BOI Data Response

On January 30, 2024, FinCEN issued a Notice and Request for Comments in the Federal Register [89 FR 5995] regarding the proposed information collection for beneficial ownership information requests. This aligns with the Beneficial Ownership Information Access and Safeguards final rule. The notice includes FinCEN's burden estimates for state, local, and tribal law enforcement agencies and financial institutions. The proposed data fields for authorized recipients include the reporting company's name, Tax Identification Number (TIN) type, TIN, and compliance certification.

Comments on this proposal are open until April 1, 2024.

For more information, visit:

CFPB Proposes Rule to Nip Potential New Nonsufficient Funds ("NSF") Fees in the Bud

On January 24, 2024, the CFPB proposed a new rule to prevent NSF fees on transactions that financial institutions decline in real-time, such as declined debit card purchases, ATM withdrawals, and some peer-to-peer payments. This rule would apply to banks, credit unions, and certain peer-to-peer payment companies. The CFPB's action is proactive, addressing concerns that technological advancements could lead to more transactions being declined instantly at the point of sale, potentially resulting in new NSF fees. The proposed rule, which would add new Part 1042, "Nonsufficient Funds Fees," to Chapter X of Title 12 of the Code of Federal Regulations, is seen as a measure to protect consumers from fees for transactions declined due to insufficient funds, which the CFPB considers unlawful under the Consumer Financial Protection Act. Public comments on the proposal are open until March 25, 2024.

For more information, visit:

FDIC Targets Five Entities for False Statements About Deposit Insurance

On January 19, 2024, the FDIC issued cease and desist letters to five entities for making false and misleading statements about FDIC deposit insurance. The targeted entities are Atmos Financial, PBC ("Atmos"); BybitcoinEx, Inc. ("BybitcoinEx"); ORGANO Payments, Inc. and its subsidiary OGPay ("OGPay"); Horizon Globex GmbH ("Horizon"), operating Upstream Exchange; and Zil Money Corporation ("Zil"). The FDIC's investigation found these companies and associated parties falsely represented themselves as FDIC-insured, misused the FDIC name or logo, misrepresented the nature of deposit insurance, or failed to clearly identify their relationships with insured depository institutions. These actions, deemed false and potentially harmful to consumers, violate the FDIC's regulations. This follows the FDIC Board of Directors adopting a final rule on December 20, 2023, amending regulations to prevent false advertising and misuse of the FDIC name and logo.

For more information, visit:

CFPB Unveils Proposal on Overdraft Fees of Large Banks

On January 17, 2024, CFPB announced a proposed rule to limit overdraft fees charged by insured financial institutions with assets over $10 billion. The proposal seeks to amend Regulation Z by removing the exclusion of certain overdraft fees from the "finance charge" definition. These large institutions must treat overdraft loans similarly to credit cards and other loans, provide clear disclosures and protections, and establish a separate credit account from the consumer's deposit account.

The proposal aims to amend Regulation E to prevent these institutions from requiring repayment of overdraft credit via preauthorized electronic fund transfers.

Public comments are open until April 1, 2024. The CFPB anticipates an effective date of October 1 for the final rule, at least six months post-publication in the Federal Register.

For more information, visit:

Fed and FDIC Extend Resolution Plan Submission Deadline

On January 17, 2024, the FDIC announced that the Federal Reserve Board and the FDIC have extended the deadline for certain large financial institutions to submit their resolution plans.

Initially set for July 1, 2024, the new deadline is now March 31, 2025. This extension follows a period of public comment initiated in August last year on proposed guidance for addressing critical challenges in the resolution plans of these institutions. The agencies are finalizing this guidance following the closure of the public comment period on November 30, 2023.

For more information, visit:

FinCEN Updates FAQ on Beneficial Ownership Information Reporting

On January 16, 2024, FinCen revised its Frequently Asked Questions regarding Beneficial Ownership Information Reporting. The latest updates, dated January 12, 2024, encompass various sections:

  • C (Reporting Company)
  • D (Beneficial Owner)
  • E (Company Applicant)
  • F (Reporting Requirements)
  • L (Reporting Company Exemptions)
  • M (FinCEN Identifier)

To view the revised FAQ, visit:

FDIC Updates Consumer Compliance Examination Manual

On January 12, 2024, The FDIC released the January 2024 update of its Consumer Compliance Examination Manual. This update includes modifications to two chapters: Fair Lending Scope and Conclusions Memo (IV-3.1), which underwent technical and formatting changes due to the FDIC's transition from SOURCE to FOCUS, and Expedited Funds Availability Act (VI-1.1), which received technical updates related to regulatory dollar-amount thresholds.

For more information, visit:

FHFA Adjusts Asset Cap for Community Financial Institutions

On January 12, 2024, the FHFA announced in the Federal Register [89 FR 2225] an adjustment to the cap on average total assets for defining a "community financial institution" (CFI) under the Federal Home Loan Bank (Bank) system. The new cap is set at $1,461,000,000, effective as of January 1, 2024. This adjustment is based on the annual percentage increase in the Consumer Price Index for all urban consumers (CPI–U), published by the Department of Labor. The Federal Home Loan Bank Act (Bank Act) provides certain advantages to insured depository institutions that qualify as CFIs, including eligibility for Bank membership and specific benefits regarding long-term advances.

For more information, visit:

CFPB Issues Guidance to Consumer Reporting Companies

On January 11, 2024, CFPB issued guidance to consumer reporting companies focusing on improving the accuracy of background check reports and addressing sloppy credit file-sharing practices. The guidance, presented in two advisory opinions, aims to ensure the consumer reporting system provides accurate, reliable information and facilitates access to personal data for individuals.

The advisory opinion on Fair Credit Reporting:

  • Background Screening mandates that these reports be complete, accurate, and devoid of duplicative, outdated, expunged, sealed, or legally restricted information.
  • File Disclosure asserts that individuals are entitled to all information in their consumer file at their request, including the sources of this information, both original and intermediary or vendor sources.

These advisory opinions will take effect upon their publication in the Federal Register.

For more information, visit:

Agencies Release Video on CRA Regulation Update

On January 10, 2024, the FRB, FDIC, and OCC released a video detailing the final rule for the CRA, issued on October 24, 2023. This video, available on their YouTube channels, offers an in-depth look at the updated CRA regulations, covering assessment areas, community development, evaluation frameworks, performance tests, ratings, and data collection and reporting. It also discusses the applicability dates of these new rules.

For more information, watch the video:

'1071' Rule Remains in Limbo as Veto Override Fails

On January 10, 2024, The U.S. Senate could not override President Biden's veto of a Congressional Review Act resolution to overturn the CFPB's Small Business Lending reporting rule, as mandated by section 1071 of the Dodd-Frank Act. The override required a two-thirds majority in both the House and Senate, but the Senate vote fell short at 54-45. Despite this, the future of the CFPB rule is uncertain, pending a decision by the U.S. Supreme Court on the constitutionality of the Bureau's funding mechanism.

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FinCEN Analysis of ID-Related Suspicious Activity

On January 9, 2024, FinCEN published a Financial Trend Analysis (FTA) titled "Identity-Related Suspicious Activity: 2021 Threads and Trends," based on 2021 Bank Secrecy Act ("BSA") Reports. The analysis revealed that about 1.6 million reports, or 42% of the total filed in 2021, were related to identity issues involving suspicious activities amounting to $212 billion.

The report, part of FinCEN's Identity Project, examines how malicious entities exploit identity processes in transaction processing and account operations. It identified over 14 common typologies in identity-related BSA reports, with fraud, false records, identity theft, third-party money laundering, and evasion of verification standards being the most frequent. These five typologies represented 88% of the identity-related reports and 74% of the total reported suspicious activity. Key trends include the predominant impact on depository institutions and the notable financial impact of compromised credentials.

For more information, visit:

Appraisal Subcommittee to Meet on Appraisal Bias

On January 9, 2024, the OCC announced a public hearing on appraisal bias by the Federal Financial Institutions Examination Council (FFIEC) Appraisal Subcommittee. Scheduled for February 13, 2024, from 10:00 a.m. to 1:00 p.m. ET at the OCC headquarters in Washington, D.C., the meeting will feature representatives from the FFIEC regulatory agencies, the U.S. Department of Housing and Urban Development, and the Federal Housing Finance Agency. Witnesses will include members from the Appraisal Foundation, state appraiser licensing bodies, and practicing appraisers. The meeting is open to the public, with registration required by February 9 for in-person and virtual attendance.

For more information, visit:

Yellen Remarks at FinCEN on Beneficial Ownership Reporting

On January 8, 2024, the Secretary of the Treasury Janet L. Yellen discussed the progress of the Beneficial Ownership Information Reporting initiative at FinCEN. Highlighting over 100,000 filings in the first week, she emphasized the initiative's ease for small businesses, underscoring that the process is simple, quick, and free and doesn't require professional assistance. The Treasury is actively disseminating information through various channels and languages, and a Contact Center is available for inquiries. Additionally, Secretary Yellen addressed efforts to increase transparency in real estate and investment advising, mentioning an upcoming notice of proposed rulemaking for residential real estate transactions and considerations for the commercial real estate sector.

For more information, visit:

CFPB Amicus Brief in Debt Collection Suit

On January 02, 2024, CFPB filed an amicus brief in the U.S. Court of Appeals for the First Circuit, emphasizing consumer rights in debt collection disputes. The brief supports holding debt collectors accountable for false statements, as in the case of Carrasquillo v. CICA Collection Agency, where a collector falsely threatened legal action against a bankrupt consumer. The CFPB argues that ignorance is not a defense for debt collectors under the Fair Debt Collection Practices Act, and they can be liable even without intent if they lack procedures to prevent such errors.

For more information, visit:

The HMDA filing period for 2023 data has begun

On January 1, 2024, CFPB opened the filing period for HMDA data collected in 2023 on January 1, 2024. Submissions will be considered timely if received on or before Friday, March 1, 2024.

FinCEN Opens Beneficial Ownership Information (BOI) Registry

On January 01, 2024, FinCEN has started accepting BOI reports. Existing reporting companies are required to register by January 1, 2025. New companies established or registered in 2024 must submit their reports within 90 days of notification of their company's creation or registration.

For more information, visit:

OCC Revises Small and Intermediate Small Community Reinvestment Act (CRA) Asset Thresholds

On December 26, 2023, the OCC updated the asset-size thresholds defining “small bank or savings association” and “intermediate small bank or savings association” under the CRA. Effective January 1, 2024, a bank with assets under $1.564 billion is classified as “small,” while those with assets between $391 million and $1.564 billion qualify as “intermediate small.” Based on the Consumer Price Index, this adjustment aligns with similar revisions announced by the FDIC and Federal Reserve System.

For more information, visit:

FTC Extends Comment Period on Proposed Ban on Junk Fees

On December 21, 2023, the FTC extended the public comment period for its proposed rule to ban junk fees by an additional 30 days. Initially set to close earlier, the new deadline for submitting comments is now February 7, 2024.

For more information, visit:

Overdraft and Non-Sufficient Funds (NSF) Fee Rule Proposals on CFPB's Agenda

On December 8, 2023, the CFPB's Fall 2023 Regulatory Agenda included a proposed rule to revise the Regulation Z exemption for overdraft (OD) fees from the finance charge definition. A Notice of Proposed Rulemaking (NPRM) is anticipated in December 2023. The Bureau is also considering amendments to Regulation Z regarding OD fees, originally defined in 1969 by the Federal Reserve Board. Additionally, the agenda features a December 2023 NPRM on Fees for Insufficient Funds.

For more information, visit:¤tPub=true&agencyCode=&showStage=active&agencyCd=3170&csrf_token=7DC0B331837779E506229731F9ED09653CAE6AE41CD811DFD5B70F01068D2CCC91EF12AC713B8B87E4A7A3C1D96C643C32C8

OCC Identifies Key Risks Facing Federal Banking System

On December 7, 2023, the OCC reported the key issues facing the federal banking system in its Semiannual Risk Perspective for Fall 2023. The OCC highlighted credit, market, operational, and compliance risks as the key risk themes in the report. The report also highlights artificial intelligence in banking as an emerging risk.

For more information, visit:

CFPB Orders Atlantic Union Bank to Pay $6.2M for Overdraft Fee Violations

On December 7, 2023, the CFPB mandated Atlantic Union Bank to pay $6.2 million for illegal practices related to its overdraft service. The bank enrolled thousands of customers in overdraft programs without proper consent and failed to provide clear disclosures, violating the Electronic Fund Transfer Act. Atlantic Union Bank must refund at least $5 million in illegal fees and pay a $1.2 million penalty. The bank's misconduct included charging overdraft fees without proper written consent and misleading customers about service terms and costs, particularly in telephonic enrollments.

For more information, visit:

FDIC Extends Comment Period for Large Bank Guidelines Proposal

On November 30, 2023, the FDIC announced the extension of the comment period for its proposed guidelines, to be added as Appendix C to its safety and soundness regulations. The guidelines, aimed at insured state nonmember banks, state-licensed insured branches of foreign banks, and insured state savings associations with assets of $10 billion or more, initially had a comment deadline of December 11, 2023. This deadline has now been extended to February 9, 2024, allowing further input on the guidelines, which will implement Section 39 of the Federal Deposit Insurance Act.

For more information, visit:

Bank of America Fined $12 Million for False Home Mortgage Disclosure Act (“HMDA”) Data

On November 28, the CFPB fined Bank of America $12 million for submitting inaccurate mortgage lending information under the HMDA. The bank's loan officers failed to collect demographic data from applicants as mandated and falsely reported non-responses. This violation of HMDA and Regulation C, as well as the Consumer Financial Protection Act, resulted from the bank's inadequate oversight in data collection and reporting processes.

For more information, visit:

CFPB Orders Toyota Motor Credit to Pay $60M

On November 20, 2023, the CFPB has ordered Toyota Motor Credit Corporation to pay $60 million for illegal lending and credit reporting practices. The company is accused of hindering borrowers from canceling bundled products in their car loan contracts, leading to overcharging and misreporting credit information. Toyota Motor Credit must cease these practices, refund $48 million to affected consumers, and pay a $12 million penalty.

For more information, visit:

CFPB Releases Report to Congress

On November 17, 2023, the CFPB has issued its Semi-Annual Report to Congress, covering activities and initiatives from October 1, 2022, to March 31, 2023. The report provides insight into the Bureau's efforts and achievements in consumer financial protection during this period.

For more information, visit:

The Federal Board Releases November 2023 Supervision and Regulation Report

On November 9, 2023, the Federal Reserve Board published its semiannual Supervision and Regulation Report. The report details current banking conditions and its supervisory and regulatory activities. It accompanies the semiannual testimony before Congress by the Board's Vice Chair for Supervision.

For more information, visit:

CFPB Proposes Oversight of Large Nonbank Financial Companies

On November 07, 2023, the CFPB proposed a rule to supervise large nonbank financial companies, particularly those providing digital consumer payment applications. This rule targets companies with over five million annual transactions, aiming to enforce adherence to consumer protection laws and to level the playing field with banks and credit unions.

For more information, visit:

Consumer Compliance Outlook Released

On November 1, 2023, The Federal Reserve published the Second/Third issue of Consumer Compliance Outlook for 2023. The key articles covered notable compliance violations in 2022, guidance on compliance risk assessments, and supervisory observations regarding re-presentment fees.

Here are the top 5 compliance violations for State Member Banks in 2022:

Regulation C (Home Mortgage Disclosure Act): 239 violations, 59.4% of all violations.

  • Violations largely revolved around failure to correctly collect and report the HMDA data fields for "covered loans" as required by §1003.4(a) of Regulation C. Specifically; there were citations for errors in reporting the "Loan Purpose" field. Institutions were cited for selecting the wrong "loan purpose" field when the purpose was a refinancing or a cash-out refinancing.

    Weak compliance training was commonly cited as the core cause of these HMDA violations.

Regulation BB (Community Reinvestment Act): 29 violations, 7.2% of all violations.

  • The most common types of violations involved failure to collect and maintain specific data for each small business or small farm loan originated or purchased by the banks.

Regulation E (Electronic Fund Transfers), Section 1005.11(c): 9 violations, 2.2% of all violations.

  • A violation of this specific provision involved the banks' failure to perform an investigation and determine whether an error occurred within ten business days of receiving a notice of error.

Regulation E, Section 1005.11(d): 6 violations, 1.5% of all violations.

  • A violation of this specific provision involved the banks' failure to respond to a consumer's notice of error in writing if it determines no error occurred or an error occurred in a manner or amount different from the one the consumer described.

Fair Credit Reporting Act: 5 violations, 1.2% of all violations.

  • Specifically, the violations involved banks taking adverse action against a consumer based in whole or in part on information in a consumer report but failure to provide an adverse action notice.

The key points from the article on Compliance Risk Assessments:

  • Financial institutions should utilize Compliance Risk Assessments to identify, understand, and manage consumer compliance risks.
  • Although not mandated by the Federal Reserve, these assessments are beneficial when scaled to the institution's size and complexity.
  • The process involves assessing inherent risks, evaluating risk management practices, and determining residual risks.
  • A formal risk assessment should be quantitative and qualitative, involving various stakeholders, including business line management, compliance staff, and the board of directors.
  • Factors like product complexity, regulatory changes, and third-party involvement affect the inherent risk levels.

These points provide a structured approach for institutions to manage compliance risks and ensure adherence to consumer protection laws and regulations.

The article on supervisory observations regarding representment fees revealed several instances where supervised institutions-imposed fees on represented transactions, which are transactions presented again to the bank for payment after an initial decline due to insufficient funds. Key observations include:

  • In some cases, institutions charged a nonsufficient funds ("NSF") fee on the initial presentation and decline of the transaction. Then, they levied additional NSF fees each time the same transaction was represented and declined.
  • The practice of assessing NSF fees on represented transactions was cited as an unfair practice under Section 5 of the Federal Trade Commission ("FTC") Act, which disallows unfair or deceptive acts or practices ("UDAP").This was based on:

    • The substantial monetary injury to a vast number of consumers due to NSF fees on represented transactions.
    • The inability of consumers to reasonably avoid this harm since the merchant controlled the re-presentment's number and timing, and the bank decided on payment or decline of the represented transaction and whether to assess an NSF fee.
    • The retention of NSF fees on represented transactions by the bank didn't provide any benefits to consumers or competition to outweigh the consumer harm.

To manage the risks associated with NSF fees on represented transactions, examiners observed effective methods employed by institutions:

  • Some institutions refrained from assessing an NSF fee on a represented transaction after an NSF fee was assessed on the initial presentation and decline.
  • Institutions relying on third-party systems monitored those systems for compliance with applicable laws and regulations, including the prohibition on UDAPs. It was also beneficial when institutions informed their Federal Reserve contact if a third party was unable to comply with their directions relating to representments.
  • Steps were taken to ensure that the information provided to consumers about represented transactions was accurate and consistent with the bank's policy and any system limitations.

For more information, visit:

OCC Urges Caution with Venture Loans

On November 1, 2023, OCC released Bulletin 2023-34, advising OCC-regulated institutions on managing risks associated with venture loans. These loans, given to early, expansion, and late- stage companies, carry a higher probability of failure. The OCC emphasizes safe, law-abiding lending practices backed by robust risk management systems. Key points include scrutinizing loans lacking adequate borrower repayment capacity assessments, re-evaluating weak venture loan underwriting standards' impact on loan loss reserve calculations, and guidance on risk rating venture loans and evaluating repayment capacity.

For more information, visit:

OCC Adopts Revised Telephone Consumer Protection Act ("TCPA") Exam Procedures

On November 1, 2023, OCC released Bulletin 2023, unveiling updated interagency examination processes for the TCPA. This initiative – collaborated with the Federal Deposit Insurance Corporation and the National Credit Union Administration – aligned the examination procedures with the TCPA amendments that took effect on October 25, 2021. Consequently, the "Telephone Consumer Protection Act and Junk Fax Protection Act" section from the "Other Consumer Protection Laws and Regulations" booklet of the Comptroller's Handbook has been annulled, directing OCC examiners to adhere to the revised interagency procedures henceforth.

For more information, visit:

President Biden Issues Long-Awaited Artificial Intelligence Executive Order

On October 30, 2023, The Biden-Harris Administration issued its long-awaited Executive order regulating artificial intelligence ("AI"). The order issues directives to over twenty federal agencies, with the deadline for implementation spanning between 30 and 365 days—just ahead of the 2024 election.

The directives regarding consumer financial markets, specifically towards the CFPB, in the executive order are aimed at addressing discrimination and biases against protected groups. The directors of the Federal Housing Finance Agency("FHFA") and the CFPB are encouraged to:

  • Evaluate underwriting models for bias or disparities affecting protected groups
  • Evaluate automated collateral valuation and appraisal processes to minimize bias
  • Issue guidance on tenant screening systems and advertising through digital platforms to avoid violations of federal laws like the Fair Housing Act, the Fair Credit Reporting Act, the Consumer Financial Protection Act of 2010, and the Equal Credit Opportunity Act

For more information, visit:

Update on the CFPB's Proposed Personal Financial Data Rights Rule

On October 19, 2023, the CFPB announced a proposed Personal Financial Data Rights Rule, later published in the Federal Register on October 31, 2023, under 88 FR 74796. The public comment period for this proposal is set to end on December 29, 2023.

In addition to the proposal, the CFPB released a 9-page PDF titled "Fast Facts: Personal Financial Data Rights Proposed Rule" to provide an overview of the topics covered in the proposed rule.

For more information, visit:

For a more detailed insight into the key points covered in the proposed rule, refer to the Fast Facts PDF.

CFPB Returns $140M to Consumers Due to "Junk" Fees

On October 11, 2023, the CFPB released a special edition of its Supervisory Highlights during a White House event tackling "junk" fees. Through CFPB oversight, companies are refunding $140 million to consumers, with $120 million for surprise overdraft and non-sufficient funds fees. This edition focuses on fees in bank account deposits, auto loan servicing, and remittances found during examinations conducted from February to August 2023. Notably, most financial institutions have eliminated non-sufficient funds fees, saving consumers around $2 billion yearly.

For more information, visit:

FDIC Proposes Corporate Governance and Risk Management Guidelines for Large Banks

On October 5, 2023, the FDIC announced plans to propose new corporate governance and risk management guidelines for banks with total consolidated assets exceeding $10 billion. The proposed guidelines, described in FIL-55-2023, aim to enhance corporate governance and risk management at these institutions. They detail the responsibilities of boards of directors and individual directors, emphasize the importance of ethical standards and committee structures, and call for establishing effective risk management programs, among other provisions. The FDIC is inviting public comments on this proposal, with a 60-day comment period after its publication in the Federal Register.

For more information, visit:

Chime Ordered to Refund Fees and Pay $1.5M Penalty by CFPB

On October 17, 2023, the CFPB took action against Chime Inc., which operates under Sendwave, accusing the fintech firm of deceptive practices regarding its international remittance transfers. The agency claims that Chime misled users about the transfer speeds and costs and compelled them to forgo their legal rights. Chime also failed to provide necessary legal disclosures, properly investigate consumer issues, and furnish transaction receipts in a timely manner. As a result, the CFPB is demanding Chime to reimburse nearly $1.5 million in fees to affected users and pay an additional $1.5 million fine to the CFPB's victims relief fund.

For more information, visit:

CFPB and DoJ Warn Against Immigration Status Discrimination in Credit Applications

On October 12, 2023, the CFPB and Justice Department jointly emphasized that financial institutions cannot discriminate against credit applicants based on their immigration status. This advisory follows reports of individuals being denied credit cards, auto loans, student loans, and other credit forms despite having solid credit histories and U.S. connections. Although the Equal Credit Opportunity Act permits consideration of immigration status for assessing repayment rights, it may be illegal if excessively or broadly relied upon. The Act prohibits discrimination based on national origin, race, and other listed factors. The statement further clarifies that the Act does not grant immunity from other laws that forbid discrimination on immigration status grounds.

For more information, visit:

FTC and CFPB Act Against TransUnion for Tenant Screening Report Failures

On October 12, 2023, the FTC and CFPB settled with credit reporting agency TransUnion and its subsidiary, requiring them to pay $15 million over inaccurate tenant screening reports. TransUnion and its Colorado-based subsidiary, TransUnion Rental Screening Solutions, Inc. ("TURSS"), allegedly breached the Fair Credit Reporting Act (FCRA) by not ensuring the accuracy of eviction records in their reports. These inaccuracies, sourced from third-party provider LexisNexis Risk and Information Analytics Group, Inc., made it difficult for consumers to obtain housing. The settlement includes a $4 million civil penalty and $11 million for consumer compensation. This case marks the highest recovery in an FTC tenant screening matter. The companies must also address the complaint's allegations and facilitate future consumer disputes over inaccuracies.

For more information, visit:

CFPB Issues Guidance on AI Credit Denials

On September 19, the CFPB unveiled guidance for lenders using artificial intelligence in credit decisions. Lenders must provide precise reasons for adverse credit actions, going beyond generic explanations. This ensures clarity in credit decisions, assisting consumers in improving their credit potential and defending them against illegal discrimination.

For more information, visit:

Rise In Mortgage Closing Costs and Income-Related Denials: CFPB Report

On September 27, the CFPB annual report on residential mortgage lending revealed a considerable decline in mortgage applications and originations in 2022, coupled with a surge in rates, fees, and other costs. Borrowers were found to be allocating a larger portion of their income toward mortgage payments, leading to increased instances of denials due to insufficient income. The report disclosed a growing preference for cash-out refinances, with the median credit score of refinance borrowers falling below that of purchase borrowers. The data also indicated a disparity in loan outcomes between Hispanic and Black borrowers compared to their White and Asian counterparts, with the former experiencing higher denial rates and more unfavorable loan conditions.

For more information, visit:

CFPB Initiates Rulemaking to Eliminate Medical Bills from Credit Reports

On September 21, the CFPB initiated a rulemaking process aimed at removing medical bills from the credit reports of Americans. The proposed rules, currently under review by its Small Business Advisory Review Panel, intend to aid families in financial recovery from medical crises, hinder debt collectors from enforcing payment of potentially unowed bills, and ensure that creditors do not rely on frequently inaccurate data. The rules, if finalized, will prohibit creditors from considering medical bills during underwriting decisions and limit coercive collection practices, though creditors can still acquire medical bill information for other purposes, such as assessing loan applications for medical services or verifying the need for medical forbearances.

For more information, visit:

CFPB Finalized Amendments To Federal Mortgage Servicing Regulations

On June 28, the CFPB finalized amendments to the agency's mortgage servicing regulations. The CFPB's new rules establish temporary safeguards designed to ensure borrowers have more time to explore options before a potential foreclosure. This includes new loan options and home sales. The rules also allow servicers to offer streamlined loan modifications and require them to communicate certain loan options to borrowers. The rules exclude small loan servicers and will take effect on August 31, 2021.

For more information, visit:

CFPB Confirmed Effective Date Of November 30, 2021, For FDCPA Final Rules

On July 30, the CFPB announced that two final rules issued under the Fair Debt Collection Practices Act will take effect on November 30, 2021. The two rules at issue are the October 2020 Debt Collection Rule, which focuses on the use of communications related to debt collection, and the December 2020 Debt Collection Rule, which clarifies the disclosures that debt collectors must provide to consumers. The CFPB previously issued a proposal in April 2021 that would have extended the effective dates to January 29, 2022, to give parties more time to comply as a result of the COVID-19 pandemic. The CFPB has now determined that such an extension is unnecessary.

For more information, visit:

FFIEC Issued New Guidance On Financial Information Technology, Infrastructure, And Operations

On June 30, the Federal Financial Institutions Examination Council ("FFIEC") issued a new guidance booklet titled "Architecture, Infrastructure, and Operations." The FFIEC booklet may have implications for financial institutions' cybersecurity compliance. It provides financial institution examiners, such as the CFPB, guidance for evaluating the risk profile of a company's information technology infrastructure and operations. Specifically, the booklet acknowledges the changing technological landscape and increasing need for security in architectural design, infrastructure implementation, and operation of information technology.

The complete FFIEC Information Technology Examination Handbook is available here:

CFPB Confirmed Effective Date Of November 30, 2021, For FDCPA Final Rules

On July 30, the CFPB announced that two final rules issued under the Fair Debt Collection Practices Act will take effect on November 30, 2021. The two rules at issue are the October 2020 Debt Collection Rule, which focuses on the use of communications related to debt collection, and the December 2020 Debt Collection Rule, which clarifies the disclosures that debt collectors must provide to consumers. The CFPB previously issued a proposal in April 2021 that would have extended the effective dates to January 29, 2022, to give parties more time to comply as a result of the COVID-19 pandemic. The CFPB has now determined that such an extension is unnecessary.

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CFPB Issued Interpretive Rule On Mortgage and Disclosure Timing Requirements For Juneteenth Federal Holiday.

On August 5, the CFPB released an Interpretive Rule to assist the mortgage industry in determining whether to treat June 19, 2021, as a federal holiday or a business day for compliance purposes with time-sensitive borrower protections. Regulation Z of the CFPB's mortgage rules establishes timing requirements, calculated in business days, for when borrowers must receive certain disclosures and when borrowers have the right to cancel some mortgages. For rescission of certain mortgages, whether June 19, 2021, counts as a federal holiday or a business day depends on when the relevant time period for the mortgage began. Specifically, if the period began on or before June 17, 2021, then June 19 was a business day. If the period began after June 17, 2021, then June 19, 2021, was a federal holiday.

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FFIEC Guidance For Financial Institutions On Consumer Employee, And Third-Party Access To Digital Banking And Information Services

On August 11, the FFIEC issued guidance that provides financial institutions with examples of risk management principles and practices for access and authentication. Specifically, it supports a financial institution's adoption of layered security, highlights the weaknesses of single-factor authentication and includes examples of authentication controls, and provides a list of government and industry resources and references to assist financial institutions. The guidance also notes the need for strong risk management controls for third parties, such as data aggregators and consumer permissioned entities, to access business and consumer financial information.

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FTC Asks Federal Reserve Board To Modify EFTA Requirements Related To Debit Card Networks

On August 12, the FTC submitted a comment on the Board of Governors of the Federal Reserve System's (Federal Reserve Board) proposed rulemaking on Regulation II. The proposed rulemaking would clarify that Regulation II applies to both transactions in which a credit card is present and transactions in which it is not, such as pay-by-phone or other electronic payment options. Regulation II implemented changes made to the EFTA under the Dodd-Frank Wall Street Reform Act of 2010. Specifically, those changes required debit card issuers to enable at least two unaffiliated debit card networks to permit merchants an option for routing electronic debit card transactions. The FTC's comments also asked the Federal Reserve Board to prevent debit card networks from paying incentives to debit card issuers for routing electronic transactions in a manner favorable to the particular debit card network.

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