Thought Leadership

Regulatory Highlights

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

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

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

For more information, visit:

FDIC Targets Five Entities for False Statements About Deposit Insurance

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

For more information, visit:

CFPB Unveils Proposal on Overdraft Fees of Large Banks

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

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

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

For more information, visit:

Fed and FDIC Extend Resolution Plan Submission Deadline

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

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

For more information, visit:

FinCEN Updates FAQ on Beneficial Ownership Information Reporting

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

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

To view the revised FAQ, visit:

FDIC Updates Consumer Compliance Examination Manual

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

For more information, visit:

FHFA Adjusts Asset Cap for Community Financial Institutions

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

For more information, visit:

CFPB Issues Guidance to Consumer Reporting Companies

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

The advisory opinion on Fair Credit Reporting:

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

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

For more information, visit:

Agencies Release Video on CRA Regulation Update

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

For more information, watch the video:

'1071' Rule Remains in Limbo as Veto Override Fails

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

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FinCEN Analysis of ID-Related Suspicious Activity

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

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

For more information, visit:

Appraisal Subcommittee to Meet on Appraisal Bias

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

For more information, visit:

Yellen Remarks at FinCEN on Beneficial Ownership Reporting

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

For more information, visit:

CFPB Amicus Brief in Debt Collection Suit

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

For more information, visit:

The HMDA filing period for 2023 data has begun

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

FinCEN Opens Beneficial Ownership Information (BOI) Registry

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

For more information, visit:

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

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

For more information, visit:

FTC Extends Comment Period on Proposed Ban on Junk Fees

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

For more information, visit:

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

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

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

OCC Identifies Key Risks Facing Federal Banking System

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

For more information, visit:

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

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

For more information, visit:

FDIC Extends Comment Period for Large Bank Guidelines Proposal

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

For more information, visit:

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

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

For more information, visit:

CFPB Orders Toyota Motor Credit to Pay $60M

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

For more information, visit:

CFPB Releases Report to Congress

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

For more information, visit:

The Federal Board Releases November 2023 Supervision and Regulation Report

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

For more information, visit:

CFPB Proposes Oversight of Large Nonbank Financial Companies

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

For more information, visit:

Consumer Compliance Outlook Released

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

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

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

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

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

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

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

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

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

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

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

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

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

The key points from the article on Compliance Risk Assessments:

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

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

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

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

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

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

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

For more information, visit:

OCC Urges Caution with Venture Loans

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

For more information, visit:

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

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

For more information, visit:

President Biden Issues Long-Awaited Artificial Intelligence Executive Order

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

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

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

For more information, visit:

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

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

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

For more information, visit:

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

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

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

For more information, visit:

FDIC Proposes Corporate Governance and Risk Management Guidelines for Large Banks

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

For more information, visit:

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

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

For more information, visit:

CFPB and DoJ Warn Against Immigration Status Discrimination in Credit Applications

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

For more information, visit:

FTC and CFPB Act Against TransUnion for Tenant Screening Report Failures

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

For more information, visit:

CFPB Issues Guidance on AI Credit Denials

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

For more information, visit:

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

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

For more information, visit:

CFPB Initiates Rulemaking to Eliminate Medical Bills from Credit Reports

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

For more information, visit:

CFPB Finalized Amendments To Federal Mortgage Servicing Regulations

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

For more information, visit:

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

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

For more information, visit:

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

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

The complete FFIEC Information Technology Examination Handbook is available here:

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

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

For more information, visit:

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

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

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

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

For more information, visit:

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

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

For more information, visit:

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