Read highlights about the key regulatory updates and explore more information on each.
The OCC, Federal Reserve, DOJ, and FinCEN have announced coordinated enforcement actions against Toronto-Dominion Bank and its affiliates, resulting in a $3 billion settlement for failures in its BSA/AML compliance programs. Regulators found significant deficiencies in the bank’s risk management, customer due diligence, and suspicious activity monitoring. TD Bank also faced systemic breakdowns in its transaction monitoring system, leading to violations related to money laundering and terrorist financing risks. The penalties include a $450 million fine from the OCC, $1.3 billion from FinCEN, $123.5 million from the Federal Reserve, and $1.8 billion from the Department of Justice.
For more information, visit:
https://www.federalreserve.gov/newsevents/pressreleases/enforcement20241010a.htm
The CFPB has released a beta version of the 2025 HMDA Platform, allowing financial institutions and vendors to test their loan/application register (“LAR”) data for compliance with 2025 reporting requirements. The beta platform, accessible at https://ffiec.beta.cfpb.gov/filing/ , enables institutions to upload sample 2025 HMDA files for validation. Financial institutions must have a Legal Entity Identifier (“LEI”) to file data, and those without an LEI are directed to the Global LEI Foundation for registration.
For more information, visit:
https://ffiec.beta.cfpb.gov/filing/2025/
The CFPB and DOJ have taken action against Fairway Independent Mortgage Corporation for discriminatory mortgage lending practices in majority-Black neighborhoods in the Birmingham, Alabama area. Fairway is accused of redlining and discouraging loan applications from Black communities. If the settlement is approved, Fairway will pay a $1.9 million civil penalty to the CFPB’s victims relief fund, provide $7 million for a loan subsidy program, and invest at least $1 million in underserved neighborhoods.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-and-justice-department-take-action-against-fairway-for-redlining-black-neighborhoods-in-birmingham-alabama/
The CFPB, FRB, and OCC have announced an increase in the 2025 threshold for higher-priced mortgage loans (“HPMLs”) subject to special appraisal requirements, rising from $32,400 to $33,500, effective January 1, 2025, based on a 3.4% increase in the CPI-W. Additionally, the CFPB and FRB have updated the dollar thresholds for Regulation Z and Regulation M, setting the threshold at $71,900 or less for consumer credit and lease transactions in 2025.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/agencies-announce-dollar-thresholds-for-smaller-loan-exemption-from-appraisal-requirements-for-higher-priced-mortgage-loans-2024/
The CFPB released a new edition of its Supervisory Highlights, detailing illegal practices in auto finance observed between November 2023 and August 2024. The report highlights wrongful repossessions despite timely payments or loan extensions, inaccurate disclosures, misapplied loan payments, and erroneous credit reporting. It also reveals issues with auto loan add-on products that increase loan costs and are not properly refunded when loans are terminated early.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-wrongful-auto-repossessions-and-loan-servicing-breakdowns/
The CFPB has released a Nonbank Registration: Orders Rule Coverage Chart to help entities determine if they are required to register under the Nonbank Registration Orders Rule. The chart is available in the Resources for Filers section of the Bureau’s nonbank registry portal and public database webpage.
For more information, visit:
https://www.consumerfinance.gov/data-research/nbr-submission/
The CFPB took action against Apple and Goldman Sachs for mishandling Apple Card customer disputes, resulting in delays and incorrect negative credit reports for consumers. The CFPB found Apple failed to send many disputes to Goldman, and Goldman did not follow federal requirements when disputes were received. As a result, Goldman Sachs must pay over $19.8 million in redress and a $45 million penalty, while Apple will pay a $25 million penalty. Goldman Sachs is also banned from launching new credit cards without regulatory approval.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-apple-and-goldman-sachs-to-pay-over-89-million-for-apple-card-failures/
The CFPB finalized a rule giving consumers more control over their personal financial data, requiring financial institutions to transfer data to another provider at the consumer's request for free. The rule promotes competition, lowers prices on loans, and improves customer service. It also includes strong privacy protections, limiting data usage to consumer-approved purposes and moving the industry away from risky “screen scraping” practices. Compliance will be phased in, with large banks required to comply by April 1, 2026, and smaller ones by April 1, 2030.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-finalizes-personal-financial-data-rights-rule-to-boost-competition-protect-privacy-and-give-families-more-choice-in-financial-services/
The CFPB announced it has started distributing refunds totaling over $191 million to more than 250,000 consumers harmed by Tempoe, LLC, a leasing company accused of deceptive practices. Tempoe misled consumers into costly leasing agreements by obscuring contract terms, leaving many unable to afford or return the merchandise. In response to the CFPB’s action, Tempoe was banned from offering consumer leases, required to close existing agreements, and had to release affected customers from further payments.
For more information, visit:
https://www.consumerfinance.gov/about-us/blog/cfpb-to-distribute-over-191-million-to-consumers-harmed-by-tempoe/
The CFPB issued guidance clarifying that employers using third-party consumer reports, such as background dossiers or algorithmic scores, for employment decisions must comply with the FCRA. This requires employers to obtain worker consent, disclose data used in adverse decisions, and provide workers the opportunity to dispute inaccuracies. The guidance emphasizes the applicability of FCRA to AI-generated “black box” scores and other third-party assessments in hiring and promotion processes.
For more information, visit:
https://www.consumerfinance.gov/compliance/circulars/consumer-financial-protection-circular-2024-06-background-dossiers-and-algorithmic-scores-for-hiring-promotion-and-other-employment-decisions/
The Federal Reserve Board announced a written agreement involving U & I Financial Corp, UniBank, the Federal Reserve Bank of San Francisco, and the Washington Department of Financial Institutions. The agreement addresses specific deficiencies at UniBank, particularly within its consumer compliance risk management program.
For more information, visit:
https://www.federalreserve.gov/newsevents/pressreleases/enforcement20241024a.htm
The OCC, Federal Reserve, FDIC, NCUA, CFPB, FHFA, CFTC, SEC, and Treasury Department have issued a notice of proposed rulemaking to establish data standards aimed at enhancing the interoperability of financial regulatory data across these agencies. These standards, mandated by the Financial Data Transparency Act of 2022, will be adopted for certain information collections in future rulemakings or other agency actions. Public comments on the proposal are invited until October 21, 2024.
For more information, visit:
https://www.federalregister.gov/documents/2024/08/22/2024-18415/financial-data-transparency-act-joint-data-standards
The CFPB has released the 2025 Small Business Lending Filing Instructions Guide, which aligns the filing instructions with the new compliance dates for the rule. Updates include revised examples for the Action Taken Date and Application Date data points to reflect the new compliance timelines, using the year 2025. Other Small Business Lending reporting resources have also been updated to reflect these extended compliance dates.
For more information, visit:
https://www.consumerfinance.gov/data-research/small-business-lending/filing-instructions-guide/2025-guide/
The CFPB has launched a beta platform for testing data submission under the small business lending data collection rule, also known as the '1071' rule under the Dodd-Frank Act. Financial institutions and their technology partners are invited to participate, test the platform, and provide feedback. Participants can create a http://Login.gov account, upload sample data files, review validation results, and explore the platform’s features. The beta program aims to gather feedback to improve the final data filing process. It is strictly for testing purposes, and data submitted during this phase will not fulfill compliance requirements.
For more information, visit:
https://files.consumerfinance.gov/f/documents/cfpb_sblbetaplatformlaunch-gettingstarted.pdf
The CFPB has fined Fay Servicing LLC $2 million for violations of mortgage servicing laws and a 2017 order related to illegal foreclosure practices. The company took prohibited foreclosure actions against borrowers seeking mortgage assistance, failed to offer available options, and overcharged for private mortgage insurance. In addition to the penalty, Fay Servicing must pay $3 million in consumer redress and invest $2 million to upgrade its servicing technology and compliance systems. The order also imposes compensation limits on CEO Edward Fay if compliance is not ensured.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-fay-servicing-for-illegal-foreclosure-actions-and-violating-law-enforcement-order/
FinCEN has issued two final rules to strengthen safeguards against illicit finance in the residential real estate and investment adviser sectors.
For more information, visit:
https://www.fincen.gov/news/news-releases/fincen-issues-final-rules-safeguard-residential-real-estate-investment-adviser
The CFPB has ordered NewDay USA to pay a $2.25 million civil penalty for misleading veterans and military families in North Carolina, Maine, and Minnesota with deceptive cost comparisons on cash-out refinance loans. The company made its loans seem less expensive by excluding taxes and insurance from the "new loan" payment, while including those costs in comparisons to borrowers’ existing mortgages. NewDay USA, a repeat offender, previously faced action in 2015 for illegal kickbacks and misleading endorsements.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-newday-usa-to-pay-2-25-million-for-illegally-luring-veterans-and-military-families-into-cash-out-refinance-loans/
The FFIEC announced it will retire its Cybersecurity Assessment Tool on August 31, 2025. The tool, used by financial institutions for self-assessment, will no longer be supported. The FFIEC has provided links to alternative resources to assist institutions in continuing their cybersecurity self-assessments.
For more information, visit:
https://www.ffiec.gov/press/an082924.htm
The FFIEC has released a new "Development, Acquisition, and Maintenance" booklet to guide examiners in evaluating information technology practices. The booklet covers governance, risk management, third-party service providers, and compliance with laws and regulations. It updates the 2004 "Development and Acquisition" booklet and reflects the evolving technological landscape, focusing on security and resilience.
For more information, visit:
https://www.ffiec.gov/press/pr082924.htm
The CFPB has ordered TD Bank, N.A. to pay $7.76 million in consumer redress and a $20 million civil money penalty for its illegal credit reporting actions. TD Bank shared inaccurate, negative credit information, including systemic errors on delinquencies and bankruptcies, and failed to correct them. The CFPB also found that the bank shared fraudulent account opening data with consumer reporting agencies and failed to resolve consumer disputes.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-td-bank-to-pay-28-million-for-breakdowns-that-illegally-tarnished-consumer-credit-reports/
The FDIC, OCC, and Federal Reserve Board have announced an extension of the comment period for their RFI on bank-fintech arrangements involving banking products and services. The new deadline for submitting comments is now October 30, 2024, providing additional time for the public to consider the RFI, prepare responses, and address the questions posed by the agencies. The original comment deadline was September 30, 2024.
For more information, visit:
https://www.occ.gov/news-issuances/news-releases/2024/nr-ia-2024-100.html
The CFPB has issued Consumer Financial Protection Circular 2024-05 on improper overdraft opt-in practices, addressing whether banks can violate the law if they lack proof of consumers' affirmative consent before charging overdraft fees for ATM and one-time debit card transactions. CFPB Director Rohit Chopra highlighted that "No Americans should be hit with bank account fees that they never agreed to." The Bureau has observed financial institutions creating obstacles to prevent consumers from avoiding overdraft fees and has taken enforcement actions against banks failing to comply with Regulation E’s opt-in requirements. The Circular outlines several examples of acceptable forms of records banks might use to prove consumer consent, depending on the method used for opting in, such as signed forms, recorded phone calls, or securely stored electronic signatures.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-to-stop-banks-from-harvesting-overdraft-fees-without-consumers-consent/
The CFPB has filed a lawsuit against Horizon Card Services and its CEO, Robert Kane, for allegedly deceiving consumers into enrolling in its costly membership credit card. The Horizon credit card, which includes nearly $300 in annual fees on a $500 credit limit, was restricted to purchases from the company’s overpriced online store. The CFPB claims Horizon misled consumers through deceptive marketing, imposed excessive fees, and made it difficult to cancel memberships or obtain refunds. The Bureau is seeking an end to Horizon’s practices and demands fines and redress for affected consumers.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-horizon-card-services-and-ceo-robert-kane-for-illegally-baiting-gouging-and-trapping-families-in-high-fee-credit-cards/
The FDIC’s Board of Directors has approved a final SOP on Bank Merger Transactions. The SOP outlines the FDIC’s process for evaluating merger applications and the principles that guide its review under the Bank Merger Act. Key updates include considerations beyond deposit concentrations, such as loan originations, expectations for reduced financial risk post-merger, and enhanced scrutiny for mergers involving institutions with over $100 billion in assets. Additionally, public hearings will be held for mergers resulting in institutions with over $50 billion in assets. This updated policy replaces the prior SOP from 2008.
For more information, visit:
https://www.fdic.gov/news/press-releases/2024/fdic-board-directors-approves-final-statement-policy-bank-merger
The OCC has entered into a Formal Agreement with Wells Fargo Bank, N.A., citing deficiencies in the bank’s financial crimes risk management practices and anti-money laundering (“AML”) internal controls. The issues identified include shortcomings in suspicious activity and currency transaction reporting, customer due diligence, and the bank’s customer identification and beneficial ownership programs. The agreement mandates that Wells Fargo take comprehensive corrective actions to improve its Bank Secrecy Act (“BSA”), AML, and U.S. sanctions compliance programs.
For more information, visit:
https://www.occ.gov/news-issuances/news-releases/2024/nr-occ-2024-99.html
The CFPB has launched a webpage for public comments on applications to become recognized standard setters under the Personal Financial Data Rights Rule. Following the final rule published in June 2024, the webpage features the first application from Financial Data Exchange for review. Public comments will be accepted until October 16, 2024, allowing stakeholders to provide input on whether an application meets the necessary criteria. Applicants may revise their submissions in response to public comments or the CFPB’s own analysis.
For more information, visit:
https://www.consumerfinance.gov/personal-financial-data-rights/applications-for-open-banking-standard-setter-recognition/
The CFPB has published the Office of Servicemembers Affairs’ annual report, highlighting the financial issues servicemembers, veterans, and military families face. A significant concern raised is the difficulty in contacting or receiving assistance from federal student loan servicers. Other issues include transcript withholding and vulnerability to fraud and scams in student lending.
For more information, visit:
https://files.consumerfinance.gov/f/documents/cfpb_osa-annual-report-cy2023_2024-09.pdf
The CFPB has released the 2025 HMDA Filing Instruction Guide (“FIG”) to assist lenders in preparing and submitting their annual HMDA data for 2025, which is due in 2026. Additionally, the Bureau published the Online Supplemental Guide for Quarterly Filers, detailing quarterly deadlines for institutions that file HMDA data quarterly. Both resources are available on the CFPB's HMDA filing website.
For more information, visit:
https://ffiec.cfpb.gov/documentation/fig/2025/overview
The CFPB has proposed a narrow amendment to the disclosure requirements for international money transfers (“remittances”). The amendment aims to provide consumers with clearer guidance on which types of inquiries are best addressed by their remittance provider rather than the CFPB or state regulators. This change is intended to help consumers resolve issues more efficiently and reduce the number of misdirected inquiries to regulatory agencies. Comments on the proposal will be accepted until November 4, 2024.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-amendment-to-remittance-transfer-rule/
The CFPB has issued new Frequently Asked Questions (“FAQs”) regarding BNPL products. The guidance explains how Regulation Z applies to BNPL offerings, including the application of credit card periodic statement requirements to Pay-in-Four BNPL plans accessed through digital accounts. The FAQs are also available for download as a PDF.
For more information, visit:
https://www.consumerfinance.gov/compliance/compliance-resources/consumer-cards-resources/buy-now-pay-later-bnpl-products/buy-now-pay-later-product-faqs/
HUD announced a settlement with OceanFirst Bank over redlining allegations in Black, Hispanic, and Asian neighborhoods in New Brunswick, NJ. The bank agreed to invest $14 million in a loan fund, spend $400,000 on credit services, and allocate $700,000 for outreach and education. OceanFirst will also maintain a branch, open a loan office, hire dedicated loan officers, and offer financial education in these communities.
For more information, visit:
https://www.hud.gov/press/press_releases_media_advisories/HUD_No_24_239
The CFPB announced proposed amendments to Regulation X aimed at making it easier for homeowners struggling to pay their mortgages to get assistance. The changes would require mortgage servicers to focus on helping borrowers rather than foreclosing when assistance is requested. The proposal includes reducing paperwork requirements, improving communication with borrowers, and ensuring information is provided in languages borrowers understand. The CFPB is also seeking comments on ensuring accurate and consistent credit reporting for borrowers undergoing review for assistance.
The proposal aims to:
The new provisions would not apply to small servicers. Comments on the proposal must be received by September 9, 2024.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-rules-to-help-homeowners-avoid-foreclosure/
The CFPB announced actions against Fifth Third Bank for illegal activities, resulting in $20 million in penalties and redress to about 35,000 harmed consumers, including 1,000 who had their cars wrongfully repossessed. The bank must pay a $5 million penalty for forcing vehicle insurance on borrowers who already had coverage and a $15 million penalty for opening fake accounts. The proposed court order bans the bank from setting sales goals that incentivize fraudulent account openings.
Previously, in 2015, the CFPB and DOJ took action against Fifth Third Bank for discriminatory auto loan pricing and illegal credit card practices.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-fifth-third-for-wrongfully-triggering-auto-repossessions-and-opening-fake-bank-accounts/
The OCC issued an amendment to its October 7, 2020, Cease and Desist Order against Citibank, N.A., Sioux Falls, SD, due to deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls. The amendment addresses Citibank's failure to meet remediation milestones and ensure sufficient and sustainable progress towards compliance. Citibank must prioritize remediation work and allocate sufficient resources. Additionally, the OCC assessed a $75 million civil money penalty for violations of the 2020 Order and data quality concerns impacting regulatory reporting.
For more information, visit:
https://occ.gov/news-issuances/news-releases/2024/nr-occ-2024-76.html
The White House’s Office of Information and Regulatory Affairs has released its Spring 2024 Unified Agenda of Regulatory and Deregulatory Actions (“URA”), outlining upcoming plans for federal regulations.
For more information, visit:
https://www.reginfo.gov/public/do/eAgendaMain
The FFIEC announced the release of data on 2023 mortgage lending transactions reported under the HMDA by 5,113 U.S. financial institutions, including banks, savings associations, credit unions, and mortgage companies.
For more information, visit:
https://www.ffiec.gov/press/pr071124.htm
The OCC reported that Acting Comptroller of the Currency Michael J. Hsu discussed three long-term trends reshaping banking during remarks at the Exchequer Club. Hsu highlighted the increasing number and size of large banks, the complexity of bank-nonbank relationships, and the rise in polarization. He emphasized how the OCC is uniquely positioned to address each trend.
For more information, visit:
https://www.occ.gov/news-issuances/news-releases/2024/nr-occ-2024-79.html
The FDIC, Federal Reserve Board, NCUA, and OCC are requesting comments on a proposal to update requirements for supervised institutions to establish, implement, and maintain effective, risk-based AML/CFT programs. These updates align with changes proposed by FinCEN, stemming from the Anti-Money Laundering Act of 2020 (“AML Act”). The amendments would require institutions to identify and document risks related to money laundering, terrorist financing, and other illicit activities while considering FinCEN’s national AML/CFT priorities. The responsibility for AML/CFT programs must be held by individuals in the U.S., ensuring oversight and supervision by the relevant agency. The proposal encourages innovative compliance approaches.
Comments are due 60 days after publication in the Federal Register.
For more information, visit:
https://www.fdic.gov/news/press-releases/2024/agencies-request-comment-anti-money-launderingcountering-financing
Five federal agencies — CFPB, FDIC, Federal Reserve, NCUA, and OCC — have jointly announced final guidance addressing reconsiderations of value (“ROVs”) for residential real estate transactions. This guidance advises financial institutions on implementing policies and procedures that allow consumers to provide additional information for appraisals or address deficiencies in original appraisals.
ROVs involve requests to reassess the value of residential real estate when deficiencies are identified or additional consumer-provided information warrants a re-evaluation. The guidance includes examples of ROV policies and procedures, aims to help institutions mitigate discrimination risks, and integrates ROV processes into risk management functions. The final guidance includes clarifying edits based on public comments received since the proposed guidance was published in July 2023.
For more information, visit:
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240718a.htm
Six federal agencies — CFPB, FDIC, FHFA, Federal Reserve Board, NCUA, and OCC — have issued a final rule under the Dodd-Frank Act to ensure the credibility and integrity of AVMs for certain mortgages. The final rule is substantially similar to the proposal issued in June 2023. The rule mandates that institutions adopt policies and controls to:
Effective October 1, 2025, the rule aims to enhance AVM reliability while adhering to nondiscrimination standards.
For more information, visit:
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240717a.htm
The CFPB announced it is distributing 122,507 payments totaling $53,885,244 to consumers harmed by BrightSpeed Solutions and its founder, Keven Howard. In 2021, the CFPB sued the third-party payment processor for facilitating payments for companies that misled consumers into purchasing unnecessary antivirus software or services. Many affected consumers were older adults who were unaware that these services were available for free. The payments, distributed through Epiq Systems, come from the CFPB's Civil Penalty Fund.
For more information, visit:
https://www.consumerfinance.gov/about-us/blog/cfpb-to-distribute-more-than-53-million-to-consumers-harmed-by-brightspeed-solutions/
The CFPB announced a proposed interpretive rule stating that many paycheck advance products, often marketed as “earned wage” products, are consumer loans subject to the Truth in Lending Act (“TILA” or implementing Regulation Z). This guidance aims to ensure lenders disclose the costs and fees of these products to workers. The CFPB also released a report on employer-sponsored paycheck advance loans, revealing that workers take out an average of 27 loans per year, with typical APRs exceeding 100%.
The proposed rule clarifies the application of existing law to paycheck advance products, replacing a 2020 advisory opinion. It emphasizes that many such products, whether through employer partnerships or marketed directly, have obligations under the Truth in Lending Act. Key points include:
The CFPB invites public comments on the interpretive rule until August 30, 2024.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-interpretive-rule-to-ensure-workers-know-the-costs-and-fees-of-paycheck-advance-products/
The Federal Reserve Board has fined Green Dot $44 million for numerous unfair and deceptive practices and violations of the Bank Secrecy Act (“BSA”). The fine addresses Green Dot's consumer compliance breakdowns in marketing, selling, and servicing prepaid debit card products, and offering tax return preparation payment services. The firm failed to adequately disclose tax refund processing fees and improperly blocked legitimate customers' accounts receiving unemployment benefits. Additionally, Green Dot did not maintain effective consumer compliance risk management and anti-money laundering programs.
For more information, visit:
https://www.federalreserve.gov/newsevents/pressreleases/enforcement20240719b.htm
The FDIC, Federal Reserve Board, and OCC have issued their second notice requesting public comments on reducing regulatory burden as part of their decennial review under the Economic Growth and Regulatory Paperwork Reduction Act of 1996. The agencies are seeking input on regulations in three categories: Consumer Protection; Directors, Officers, and Employees; and Money Laundering. Comments are open for 90 days from the notice's publication in the Federal Register.
A virtual public outreach meeting will be held on September 25, 2024, allowing stakeholders to present their views. Registration for providing oral comments is open until August 9, 2024.
For more information, visit:
https://www.fdic.gov/news/press-releases/2024/federal-bank-regulatory-agencies-seek-comment-interagency-effort-reduce
The FDIC, OCC, and Federal Reserve issued a statement reminding banks of potential risks related to third-party arrangements for delivering deposit products and services. While supporting responsible innovation, the agencies highlighted safety, soundness, compliance, and consumer-related concerns. The statement details effective risk management practices and reiterates existing legal requirements and guidance without establishing new expectations. Additionally, the agencies are seeking input on bank-fintech arrangements, including deposit, payment, and lending products and services. Comments are open for 60 days following the publication of the request for information in the Federal Register.
For more information, visit:
https://www.fdic.gov/news/press-releases/2024/agencies-remind-banks-potential-risks-associated-third-party-deposit
The FDIC Board of Directors approved several actions:
For more information, visit:
https://www.fdic.gov/news/board-matters/2024/board-meeting-2024-07-30-1open
The Federal Reserve has released the second 2024 issue of Consumer Compliance Outlook, focusing on consumer complaints. This issue includes the following articles:
For more information, visit:
https://www.consumercomplianceoutlook.org/-/media/cco/2024/second-issue/CCOI22024.pdf
The CFPB announced the release of an advisory opinion and a research report on contract-for-deed home financing, a form of seller financing where the seller retains the deed until the buyer completes payments. These contracts, often lacking oversight, can result in buyers being responsible for homeownership duties such as repairs and taxes, while remaining at risk of losing their investment if they default. The CFPB affirmed that contracts for deed are subject to federal home lending laws, including the Truth in Lending Act, which mandates that sellers assess the borrower’s ability to repay, provide accurate disclosures, and avoid balloon payments. The opinion is particularly aimed at protecting marginalized communities often targeted by these contracts.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-to-stop-contract-for-deed-investors-from-setting-borrowers-up-to-fail/
The CFPB announced a proposed order to settle its lawsuit against Credit Repair Cloud and its CEO, Daniel A. Rosen, for assisting credit repair companies that charged illegal advance fees. If approved, the order would impose a $2 million civil penalty on Rosen and a $1 million penalty on Credit Repair Cloud. The company and Rosen would also be required to ensure that credit repair businesses using their platform cease charging unlawful fees. The lawsuit, filed in 2021 and amended in 2022, alleged that Credit Repair Cloud violated the Telemarketing Sales Rule by encouraging illegal practices and knowingly supporting these businesses.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-credit-repair-cloud-and-ceo-daniel-rosen-for-enabling-credit-repair-companies-that-harvest-illegal-fees/
The Federal Reserve Board, in collaboration with the FDIC, has issued final guidance to help certain large banks develop their resolution plans, or "living wills." This guidance applies to domestic and foreign banks with more than $250 billion in assets, excluding the largest and most complex banks. It addresses the specific characteristics and risks of this group, providing expectations for single point of entry and multiple point of entry resolution strategies. The guidance also includes directives for foreign banks on aligning their global and U.S. resolution plans.
The submission deadline for resolution plans has been extended to October 1, 2025. The guidance becomes effective upon publication in the Federal Register.
For more information, visit:
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240805a.htm
The CFPB announced updates to its Small Business Lending rule under the Dodd-Frank Act’s Section 1071, initially effective August 23, 2023. Legal challenges led to a stay by a Texas federal court, which was extended pending the Supreme Court's decision in CFPB v. CFSA. Following the court's mandate, the CFPB will extend compliance deadlines for lenders. The new deadlines are:
For more information, visit:
https://www.consumerfinance.gov/1071-rule/
Commentary: This announcement was made soon after the U.S. Supreme Court ruled 7 to 2 that the CFPB’s funding mechanism, as prescribed in the Dodd-Frank Act, does not violate the Constitution.
The case, brought by payday lenders objecting to a Bureau rule on fund withdrawals from borrowers' bank accounts, challenged the CFPB's direct funding by the Federal Reserve. The decision reverses a
lower court ruling that had found the funding method unconstitutional. Justice Clarence Thomas wrote the majority opinion, while justices Samuel Alito and Neil Gorsuch dissented.
o Source: Associated Press, “Supreme Court sides with the Consumer Financial Protection Bureau, spurning a conservative attack,” (May 16, 2024)
For more information, visit:
https://apnews.com/article/supreme-court-cfpbconsumer-protection-9f30de9bbfa5b25a47804b101fb998e8
https://www.bankersonline.com/sites/default/files/22-448_o7jp.pdf (PDF Download, 59 Pages)
The CFPB issued a proposed interpretive rule confirming that BNPL lenders are credit card providers, thereby subjecting them to key legal protections and rights applicable to conventional credit cards. These include the rights to dispute charges and demand refunds from lenders for returned products or canceled services. BNPL lenders will be required to investigate disputes, refund returned products or canceled services, and provide periodic billing statements. The rule will take effect 60 days after publication in the Federal Register, with comments accepted through August 1, 2024.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-to-ensure-consumers-can-dispute-charges-and-obtain-refunds-on-buy-now-pay-later-loans/
The FDIC Chairman Martin J. Gruenberg announced his intention to resign once a successor is nominated and confirmed. He stated that he will continue to fulfill his responsibilities as chairman, including overseeing the transformation of the FDIC's workplace culture, until his successor is in place.
For more information, visit:
https://www.fdic.gov/news/press-releases/statement-fdic-chairman-martin-j-gruenberg
Acting Comptroller of the Currency Michael J. Hsu testified before the House Committee on Financial Services, highlighting the OCC’s priorities. Hsu addressed efforts to prevent complacency, adapt to digitalization, manage climate related financial risks, and ensure fairness in banking. He also provided an overview of the federal banking system's current state and recent regulatory developments.
For more information, visit (Oral Statement):
https://www.occ.gov/newsissuances/congressional-testimony/2024/ct-occ-2024-51-oral.pdf (PDF Download, 2 Pages)
For more information, visit (Written Statement):
https://www.occ.gov/newsissuances/congressional-testimony/2024/ct-occ-2024-51-written.pdf (PDF Download, 10 Pages)
The CFPB announced a public inquiry into rising fees in mortgage closing costs. The agency seeks to understand why these costs have increased by over 36% from 2021 to 2023, who benefits, and how these costs might be reduced for borrowers and lenders. Median closing costs reached $6,000 in 2022, straining household budgets and affecting mortgage competitiveness. The CFPB requests public input on competition in fees, fee-setting processes, profit beneficiaries, and the impact of these costs on consumers. Comments are due within 60 days of the Federal Register publication.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-launches-inquiry-into-junk-fees-in-mortgage-closing-costs/
In a CFPB Blog article titled "Banks' responsibility for scams," General Counsel Seth Frotman discusses a case where Citibank is sued by New York for inadequate responses to wire transfer fraud. The state alleges Citibank failed to comply with the Electronic Fund Transfer Act (“EFTA”, implementing Regulation E) after scammers stole money via wire transfers from consumers' accounts. Citibank claims EFTA does not apply due to an exemption for wire transfers, but the CFPB disagrees, asserting EFTA applies to transactions initiated through online consumer banking platforms.
For more information, visit:
https://www.consumerfinance.gov/about-us/blog/banks-responsibility-for-scams/
Commentary: CFPB Blog articles are not official interpretations of law or regulations.
The FTC staff provided its annual report to the CFPB on its 2023 enforcement and related activities under the Truth in Lending Act (“TILA”), Consumer Leasing Act (“CLA”), and Electronic Fund Transfer Act (“EFTA”). The report highlights the FTC’s enforcement actions and initiatives in areas such as automobile financing and leasing, payday lending, other credit and leasing, and electronic fund transfers.
For more information, visit:
https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-staff-provides-annual-report-cfpb-2023-activities-regarding-financial-acts
Acting Comptroller of the Currency Michael J. Hsu discussed recovery planning via livestream at the Entrepreneurship, Markets and Technology: Regulation's Challenges in a Changing World Conference in Zurich, Switzerland. Hsu emphasized the importance of recovery planning in mitigating the too-big-tofail problem, especially for large banks, referencing the bank failures in March 2023. He suggested expanding recovery planning guidelines to banks with at least $100 billion in assets.
For more information, visit:
https://www.occ.gov/news-issuances/speeches/2024/pub-speech-2024-54.pdf (PDF Download, 6 Pages)
The CFPB has finalized a rule outlining the qualifications for becoming a recognized industry standard setting body for open banking. This new rule specifies the attributes required for standard setting bodies to be recognized and provides a step-by-step guide for applying and evaluation criteria. This initiative aims to implement personal financial data rights for consumers, facilitating opportunities for smaller financial institutions and startups. The rule will become effective 30 days after publication in the Federal Register.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-launches-process-to-recognize-open-banking-standards/
The CFPB has issued Consumer Financial Protection Circular 2024-03, addressing the use of unlawful or unenforceable terms and conditions in contracts for consumer financial products and services, which may violate the CFPA's prohibition on deceptive acts or practices. "Covered persons" and "service providers" under the CFPA must adhere to this prohibition. Contractual terms that are unlawful or unenforceable under federal or state law, including those that waive consumer rights, may be considered deceptive practices.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-warns-against-deception-in-contract-fine-print/
The CFPB has finalized the "Nonbank Registration" rule, establishing a registry to detect and deter corporate offenders that have violated consumer laws and are under government or court orders. The registry will help identify repeat offenders and trends in recidivism, and will be useful for state attorneys general, state regulators, law enforcement agencies, investors, creditors, and the public. Covered nonbank companies must register with the CFPB when caught violating consumer law and provide an attestation from a senior executive confirming compliance with relevant orders. The rule becomes effective on September 16, 2024, with phased implementation dates.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-creates-registry-to-detect-corporate-repeat-offenders/
The CFPB announced a proposed rule to remove medical bills from most credit reports, aiming to enhance privacy protections, boost credit scores, and prevent coercive debt collection practices. The rule would stop credit reporting companies from sharing medical debts with lenders and ban lenders from making lending decisions based on medical information. This proposal seeks to address the burden of medical debt and close a regulatory loophole that allows creditors to use medical debts in credit decisions.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-to-ban-medical-bills-from-credit-reports/
The Treasury Department has released a Request for Information (“RFI”) on the Uses, Opportunities, and Risks of Artificial Intelligence (“AI”) in the Financial Services Sector. This RFI aims to understand AI's application, potential benefits, and risks in financial services, including its impact on consumers, investors, institutions, and regulators. Treasury is also interested in how AI can promote inclusive and equitable access to financial services. Comments are due by August 12, 2024.
For more information, visit:
https://home.treasury.gov/news/press-releases/jy2393
https://www.federalregister.gov/documents/2024/06/12/2024-12336/request-for-information-on-uses-opportunities-and-risks-ofartificial-intelligence-in-the-financial
The OCC has issued Bulletin 2024-13 announcing version 2.0 of the "Retail Nondeposit Investment Products" booklet of the Comptroller's Handbook. This updated booklet discusses risks and risk management practices related to the recommendation or sale of NDIP to retail customers. It also provides examiners with a framework for evaluating a bank’s retail NDIP program. The revised booklet incorporates significant regulatory changes from the SEC’s Regulation Best Interest, reflects OCC and interagency issuances since January 2015, and includes updates for clarity.
For more information, visit:
https://www.occ.gov/news-issuances/bulletins/2024/bulletin-2024-13.html
Acting Comptroller of the Currency Michael J. Hsu discussed improving customer financial health during a presentation at the Emerge Financial Health conference in Chicago. Hsu’s remarks covered the OCC’s efforts to define and measure financial health, encouraging banks to use these measures to support their customers' financial stability and resilience. He also announced the publication of an OCC report outlining three Financial Health Vital Signs that banks can use to assess customers' financial health.
For more information, visit:
https://www.occ.gov/news-issuances/speeches/2024/pub-speech-2024-60.pdf
https://www.occ.gov/publications-and-resources/publications/community-affairs/community-developments-insights/ca-insights-jun-2024.html
FinCEN has updated its Beneficial Ownership Information FAQs. These updates include new FAQs about reporting companies, exemptions, and beneficial owners. Updates also clarify how the Corporate Transparency Act applies to Indian Tribes and entities formed under tribal law.
For more information, visit:
https://www.fincen.gov/boi-faqs
FinCEN has released its Year in Review for Fiscal Year 2023, offering stakeholders insights into the collection and use of Bank Secrecy Act (”BSA”) data. The report includes statistics on BSA reporting, how it is queried and used by law enforcement agencies, and how FinCEN uses and analyzes BSA reporting to support alerts, trend analyses, and regulatory actions. The review highlights FinCEN's efforts to support law enforcement and national security agencies.
For more information, visit:
https://www.fincen.gov/news/news-releases/fincen-year-review-fiscal-year-2023
The CFPB announced a proposed stipulated order against Freedom Mortgage, requiring the company to audit, test, and correct its Home Mortgage Disclosure Act (“HMDA”) data regularly. The order, if entered by the court, also mandates a $3.95 million civil penalty. This action follows an October 2023 lawsuit where Freedom Mortgage was found to have violated the HMDA and a 2019 CFPB order. Freedom Mortgage, headquartered in Boca Raton, Florida, submitted incorrect mortgage data for 2020 due to systemic compliance management issues, violating HMDA, the 2019 order, and the Consumer Financial Protection Act.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-repeat-offender-freedom-mortgage-corporation-for-violating-law-enforcement-order-and-for-housing-data-errors/
The CFPB issued orders against Sutherland Global and NOVAD Management Consulting for inadequate servicing of reverse mortgages, harming older homeowners. According to the CFPB, Sutherland and NOVAD failed to manage up to 150,000 borrowers, ignoring thousands of homeowner assistance requests, leading to financial harm and unnecessary costs.
The Orders:
Violations:
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-sutherland-global-and-novad-management-consulting-for-reverse-mortgage-servicing-failures/
The Federal Reserve Board issued a Consent Cease and Desist Order against Evolve Bancorp, Inc., and Evolve Bank & Trust for deficiencies in their anti-money laundering, risk management, and consumer compliance programs. Examinations in 2023 revealed unsafe practices and ineffective risk management frameworks, especially in partnerships with financial technology companies. The order requires Evolve to enhance its policies, oversight, and monitoring to address compliance and fraud risks. This action is independent of the Synapse Financial Technologies, Inc. bankruptcy proceedings.
For more information, visit:
https://www.federalreserve.gov/newsevents/pressreleases/enforcement20240614a.htm
The OCC released its Semiannual Risk Perspective for Spring 2024, highlighting key risks in the federal banking system.
Key Highlights:
For more information, visit:
https://www.occ.gov/news-issuances/news-releases/2024/nr-occ-2024-64.html
https://www.occ.gov/publications-and-resources/publications/semiannual-risk-perspective/files/pub-semiannual-risk-perspective-spring-2024.pdf
The White House announced the nomination of Christy Goldsmith Romero to be a member of the FDIC Board of Directors for the remainder of the term expiring December 21, 2028, currently held by Martin J. Gruenberg. She has also been nominated to be Chairperson of the FDIC for a term of five years.
For more information, visit:
https://www.whitehouse.gov/briefing-room/presidentialactions/2024/06/13/nominations-sent-to-the-senate-149/
The FDIC has updated its Consumer Compliance Examination Manual. The June 2024 updates include revisions to.
For more information, visit:
https://www.fdic.gov/resources/supervision-and-examinations/consumer-compliance-examination-manual/index.html
FinCEN recently issued a report of its May 2024 efforts to educate small businesses and other key stakeholders about new beneficial ownership reporting requirements. The report also included a list of upcoming events where FinCEN representatives will provide information on the regulation.
For more information, visit:
https://www.fincen.gov/news/news-releases/monthly-roundup-beneficial-ownership-reporting-outreach-activities-and-preview
The CFPB issued an interim final rule to officiate the extension of compliance dates for its 2023 Small Business Lending rule under Regulation B. The extension accounts for a 290-day delay due to a Texas court stay and the Supreme Court's recent decision in CFPB v. CFSA.
Key Adjustments:
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-extends-compliance-dates-for-small-business-lending-rule/
Commentary: This is an issuance of an interim final rule to seek public comments and to officiate the announcement made on May 17, 2024 when the CFPB first announced updates to its Small Business Lending rule soon after the Supreme Court ruling on the CFPB’s mechanism. No significant changes or additional updates were made to the Small Business Lending rule since the May 17, 2024 announcement.
The CFPB announced the approval of a new rule to ensure accuracy and accountability in the use of algorithms and artificial intelligence in home appraisals. Approved by the OCC and reportedly by the FDIC, the rule will be jointly issued by the OCC, Federal Reserve Board, FDIC, NCUA, CFPB, and FHFA once approved by all agencies.
Key Points:
For more information, visit:
https://www.consumerfinance.gov/about-us/blog/cfpb-approves-rule-to-ensure-accuracy-and-accountability-in-the-use-of-ai-and-algorithms-in-home-appraisals/
The FDIC Board has approved a final rule to strengthen resolution planning for insured depository institutions (“IDIs”) with at least $50 billion in total assets. After reviewing comments on the proposed rule from September 2023, the FDIC incorporated several changes into the final rule.
Key Points:
For more information, visit:
https://www.fdic.gov/news/press-releases/fdic-board-directors-approves-final-revised-rule-strengthen-resolution-planning
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:
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:
https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20240513a1.pdf
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-distributes-384m-to-191k-victims-of-think-finances-illegal-lending-practices/
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:
https://apnews.com/article/credit-card-late-fees-banks-cfpb-biden-85e1b89c16670c28c3ec311e8519547c
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-highlights-consumer-frustrations-with-credit-card-rewards-programs/
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:
https://www.federalreserve.gov/newsevents/pressreleases/other20240509a.htm
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:
https://home.treasury.gov/news/press-releases/jy2331
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:
https://www.hud.gov/press/press_releases_media_advisories/HUD_No_24_111
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:
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-publishes-research-finding-higher-price-complexity-leads-consumers-to-pay-more/
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:
https://www.fdic.gov/news/press-releases/fulton-bank-na-lancaster-pennsylvania-assumes-substantially-all-deposits
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:
For more information, visit:
https://www.consumercomplianceoutlook.org/
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:
https://www.fhfa.gov/regulation/federal-register/final-rule/fair-lending-fair-housing-and-equitable-housing-finance-plans-final-rule
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:
https://files.consumerfinance.gov/f/documents/cfpb_supervisory-highlights_issue-33_2024-04.pdf
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:
https://www.federalregister.gov/documents/2024/04/23/2024-08430/procedures-for-supervisory-designation-proceedings
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:
https://www.fincen.gov/news/news-releases/fincen-reminds-financial-institutions-remain-vigilant-environmental-crimes
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:
https://www.fincen.gov/news/news-releases/fincen-issues-analysis-elder-financial-exploitation
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:
https://www.fincen.gov/boi-faqs
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:
https://www.fdic.gov/sites/default/files/2024-04/spapr1024b_0.pdf
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:
https://home.treasury.gov/system/files/136/Managing-Artificial-Intelligence-Specific-Cybersecurity-Risks-In-The-Financial-Services-Sector.pdf
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:
https://news.bloomberglaw.com/banking-law/anti-redlining-overhaul-for-banks-paused-by-texas-federal-judge
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:
https://files.consumerfinance.gov/f/documents/cfpb_cr-annual-report_2023-03.pdf
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:
https://www.federalregister.gov/documents/2024/03/29/2024-06763/request-for-information-and-comment-on-customeridentification-program-rule-taxpayer-identification
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:
https://www.fdic.gov/news/financial-institution-letters/2024/fil24016.html
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:
https://www.fdic.gov/news/financial-institution-letters/2024/fil24015.html
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:
https://www.consumercomplianceoutlook.org/2024/first-issue/compliance-spotlight/
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.
For more information, visit:
https://www.occ.gov/news-issuances/news-releases/2024/nr-occ-2024-48.html
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.
For more information, visit:
https://www.consumerfinance.gov/about-us/blog/asc-hearing-addresses-appraisal-bias-highlights-deficiencies-with-the-appraisal-foundation/
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:
https://www.fdic.gov/news/press-releases/2024/pr24016.html
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:
https://www.fincen.gov/resources/statutes-regulations/administrative-rulings/fincen-publishes-administrative-ruling
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:
https://www.consumerfinance.gov/about-us/blog/junk-fees-are-driving-up-housing-costs-the-cfpb-wants-to-hear-from-you/
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:
https://www.uschamber.com/finance/u-s-chamber-files-lawsuit-against-consumer-financial-protection-bureau-to-protect-credit-card-users
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:
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240308a.htm
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:
https://www.consumerfinance.gov/about-us/blog/unlawful-fees-in-the-mortgage-market/
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:
https://www.federalregister.gov/documents/2024/02/23/2024-03681/agency-information-collection-activities-proposed-renewal-comment-request-renewal-without-change-of
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:
https://bankingjournal.aba.com/2024/02/the-true-cost-of-too-much-data/
*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.
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-federal-supervision-for-installment-lender-following-contested-designation/
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:
https://www.federalregister.gov/documents/2024/02/23/2024-01095/overdraft-lending-very-large-financial-institutions
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:
https://www.fincen.gov/sites/default/files/shared/BOI_Access_and_Safeguards_SECG_508C.pdf
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:
https://docs.fcc.gov/public/attachments/DOC-400522A1.pdf
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:
https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-california-dfpi-case-leads-ban-against-operators-mortgage-relief-scam-home-matters-usa
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:
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240216a.htm
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-finds-large-banks-charge-higher-credit-card-interest-rates-than-small-banks-and-credit-unions/
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:
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-revised-supervisory-appeals-process/
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:
https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-proposes-new-protections-combat-ai-impersonation-individuals
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:
https://www.federalregister.gov/documents/2024/02/15/2024-02854/financial-crimes-enforcement-network-anti-money-launderingcountering-the-financing-of-terrorism
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:
https://public-inspection.federalregister.gov/2024-02565.pdf
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:
https://www.occ.gov/publications-and-resources/information-for/bankers/community-bank-director-workshops/index-community-bank-director-workshops.html
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:
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:
https://home.treasury.gov/news/press-releases/jy2097
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:
https://files.consumerfinance.gov/f/documents/cfpb_ffiec-statement-on-exam-principles_2024-02.pdf
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-secures-12-million-from-ringleaders-of-foreclosure-relief-scam/
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:
https://ncua.gov/newsroom/speech/2024/ncua-chairman-todd-m-harpers-remarks-brookings-institution-agenda-credit-union-regulation
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:
https://www.americanbanker.com/news/banking-groups-sue-regulators-to-block-cra-revamp
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:
https://www.federalreserve.gov/data/sloos/sloos-202401.htm
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:
https://public-inspection.federalregister.gov/2024-02565.pdf
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:
https://www.federalregister.gov/documents/2024/02/05/2024-02186/agency-information-collection-activities-proposed-renewal-comment-request-renewal-without-change-of
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:
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:
https://www.federalregister.gov/documents/2024/02/01/2023-25797/community-reinvestment-act
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-rule-to-stop-new-junk-fees-on-bank-accounts/
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:
For more information, visit:
https://t.e2ma.net/click/c4doqg/cgvld/80ci1t
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:
https://www.frbservices.org/news/press-releases/012524-new-ach-risk-management-service
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:
https://www.federalregister.gov/documents/2024/01/30/2024-01828/agency-information-collection-activities-proposed-collection-comment-request-beneficial-ownership
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-rule-to-stop-new-junk-fees-on-bank-accounts/
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:
https://www.fdic.gov/news/press-releases/2024/pr24003.html
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-rule-to-close-bank-overdraft-loophole-that-costs-americans-billions-each-year-in-junk-fees/
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:
https://www.fdic.gov/news/press-releases/2024/pr24002.html
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:
To view the revised FAQ, visit:
https://www.fincen.gov/boi-faqs
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:
https://www.fdic.gov/resources/supervision-and-examinations/consumer-compliance-examination-manual/index.html
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:
https://www.federalregister.gov/documents/2024/01/12/2024-00491/notice-of-annual-adjustment-of-the-cap-on-average-total-assets-that-defines-community-financial
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:
These advisory opinions will take effect upon their publication in the Federal Register.
For more information, visit:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-addresses-inaccurate-background-check-reports-and-sloppy-credit-file-sharing-practices/
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:
https://www.youtube.com/watch?v=wRUo-aehv5I
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.
For more information, visit:
https://www.banking.senate.gov/newsroom/majority/brown-applauds-affirmation-of-1071-rule
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:
https://www.fincen.gov/sites/default/files/shared/FTA_Identity_Final508.pdf
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:
https://www.occ.gov/news-issuances/news-releases/2024/nr-occ-2024-2.html
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:
https://home.treasury.gov/news/press-releases/jy2017
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:
https://www.consumerfinance.gov/about-us/blog/holding-debt-collectors-responsible-for-false-statements/
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.
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:
https://www.fincen.gov/news/news-releases/us-beneficial-ownership-information-registry-now-accepting-reports
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:
https://www.occ.gov/news-issuances/bulletins/2023/bulletin-2023-40.html
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:
https://www.ftc.gov/news-events/news/press-releases/2023/12/federal-trade-commission-extends-public-comment-period-proposed-rule-prohibiting-junk-fees-30-days
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:
https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPub=true&agencyCode=&showStage=active&agencyCd=3170&csrf_token=7DC0B331837779E506229731F9ED09653CAE6AE41CD811DFD5B70F01068D2CCC91EF12AC713B8B87E4A7A3C1D96C643C32C8
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:
https://www.occ.gov/news-issuances/news-releases/2023/nr-occ-2023-135.html
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-atlantic-union-bank-to-pay-6-2-million-for-illegal-overdraft-fee-harvesting/
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:
https://www.fdic.gov/news/financial-institution-letters/2023/fil23060.html
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-bank-of-america-to-pay-12-million-for-reporting-false-mortgage-data/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-toyota-motor-credit-to-pay-60-million-for-illegal-lending-and-credit-reporting-misconduct/
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:
https://www.consumerfinance.gov/data-research/research-reports/semi-annual-report-of-the-bureau-of-consumer-financial-protection/
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:
https://www.federalreserve.gov/publications/files/202311-supervision-and-regulation-report.pdf
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-new-federal-oversight-of-big-tech-companies-and-other-providers-of-digital-wallets-and-payment-apps/
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.
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.
Regulation E (Electronic Fund Transfers), Section 1005.11(c): 9 violations, 2.2% of all violations.
Regulation E, Section 1005.11(d): 6 violations, 1.5% of all violations.
Fair Credit Reporting Act: 5 violations, 1.2% of all violations.
The key points from the article on Compliance Risk Assessments:
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:
To manage the risks associated with NSF fees on represented transactions, examiners observed effective methods employed by institutions:
For more information, visit:
https://www.consumercomplianceoutlook.org/2023/second-third-issue/top-compliance-violations/
https://www.consumercomplianceoutlook.org/2023/second-third-issue/compliance-risk-assessment/
https://www.consumercomplianceoutlook.org/2023/second-issue/compliance-spotlight/
https://t.e2ma.net/click/sgaakg/cgvld/wnaypt
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:
https://www.occ.gov/news-issuances/bulletins/2023/bulletin-2023-34.html
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:
https://www.occ.gov/news-issuances/bulletins/2023/bulletin-2023-35.html
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:
For more information, visit:
https://www.whitehouse.gov/briefing-room/presidential-actions/2023/10/30/executive-order-on-the-safe-secure-and-trustworthy-development-and-use-of-artificial-intelligence/
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:
https://www.federalregister.gov/documents/2023/10/31/2023-23576/required-rulemaking-on-personal-financial-data-rights
For a more detailed insight into the key points covered in the proposed rule, refer to the Fast Facts PDF.
https://files.consumerfinance.gov/f/documents/cfpb_personal-financial-data-rights_fast-facts-of-proposed-rule_2023-10.pdf
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-exams-return-140-million-to-consumers-hit-by-illegal-junk-fees-in-banking-auto-loans-and-remittances/
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:
https://www.fdic.gov/news/financial-institution-letters/2023/fil23055.html
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-operator-of-sendwave-app-for-illegally-cheating-people-on-international-money-transfers/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-and-justice-department-issue-joint-statement-cautioning-that-financial-institutions-may-not-use-immigration-status-to-illegally-discriminate-against-credit-applicants/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-ftc-take-actions-against-transunion-illegal-rental-background-check-and-credit-reporting-practices/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-guidance-on-credit-denials-by-lenders-using-artificial-intelligence/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-mortgage-report-finds-jumps-in-closing-costs-and-denials-for-insufficient-income-growing-proportion-of-cash-out-refinances/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-kicks-off-rulemaking-to-remove-medical-bills-from-credit-reports/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-rules-to-facilitate-smooth-transition-as-federal-foreclosure-protections-expire/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-confirms-effective-date-for-debt-collection-final-rules/
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:
http://ithandbook.ffiec.gov/
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:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-confirms-effective-date-for-debt-collection-final-rules/
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.
For more information, visit:
https://files.consumerfinance.gov/f/documents/cfpb_juneteenth-holiday_interpretive-rule_2021-08.pdf
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.
For more information, visit:
https://files.consumerfinance.gov/f/documents/cfpb_authentication-access-financial-institution-services-systems_guidance_2021-08.pdf
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.
For more information, visit:
https://www.ftc.gov/policy/advocacy/advocacy-filings/2021/08/ftc-staff-comment-board-governors-federal-reserve-system
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