In a blog post published at the end of last week, the CFPB announced that its payday lending rule (Rule) would go into effect on March 30, 2025.  Because the Rule’s ability to pay requirements were rescinded, the only remaining provisions of the Rule are its “payment provisions.”  Those provisions:

  • Prohibit lenders from attempting to withdraw payment for a covered loan from a borrower’s account after two consecutive attempts have failed due to lack of sufficient funds, unless the borrower specifically provides new authorization to do so; and
  • Require lenders to give consumers certain notices, such as advance notice before attempting to withdraw a payment for the first time and notice of the consumer’s rights when two consecutive payment attempts fail.
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The U.S. Department of the Treasury (“Treasury”) has released a Request for Information on the Uses, Opportunities, and Risks of Artificial Intelligence (“AI”) in the Financial Services Sector (“RFI”).  Written comments are due by August 12, 2024. 

AI is a broad topic and the term is sometimes used indiscriminately; as the RFI suggests, most AI systems being used or contemplated in the financial services sector involve machine learning, which is a subset of AI. … Continue Reading

The steady drumbeat of steps during Rohit Chopra’s tenure as CFPB Director to call into question the reliability and predictability of medical debt information in credit underwriting reached a crescendo last week with the CFPB’s issuance of a proposed rule to eliminate the exception in Regulation V (which implements the Fair Credit Reporting Act) that currently allows creditors to obtain and use medical debt information in connection with credit eligibility determinations. … Continue Reading

On June 13, 2024, CFPB Director Rohit Chopra appeared before the House Financial Services Committee for a hearing, “The Semi-Annual Report of the Bureau of Consumer Financial Protection.” As we expected, the House Financial Services Committee also tackled the earnings issue raised by Senator John Kennedy (R-LA). We previously blogged that CFPB Director Rohit Chopra was dismissive of the argument that the CFPB was unlawfully funded out of losses of the Federal Reserve Banks.… Continue Reading

On June 4, 2024, the CFPB issued its Semi-Annual Report to Congress covering the period beginning April 1, 2023 and ending September 30, 2023. On June 12, 2024, CFPB Director Chopra appeared before the Senate Banking Committee for a hearing, “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.” On June 13, 2024, Director Chopra appeared before the House Financial Services Committee for a hearing, “The Semi-Annual Report of the Bureau of Consumer Financial Protection.”… Continue Reading

Buyer-Broker Commissions

In connection with its guaranteed home loan program, the Department of Veterans Affairs (VA) recently adopted a temporary local variance allowing veterans to pay the commission of the real estate broker or agent assisting them (a “buyer-broker”). VA also recently urged servicers to implement a targeted foreclosure moratorium through year end, which would extend, with modifications, a previously announced moratorium.… Continue Reading

On May 16, 2024, the U.S. Supreme Court ruled that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. This two-part episode repurposes a recent webinar. In Part I, we first discuss the SCOTUS decision, the status of the CFPB’s payday lending rule that was at issue in the underlying case, and a potential new challenge to the CFPB’s funding that has been the focus of recent attention.… Continue Reading

It took about an hour for someone on the Senate Finance Committee during its hearing today to mention the “elephant in the room” — namely, the fact that the CFPB is only allowed under Dodd-Frank to be funded out of “combined earnings of the Federal Reserve System” and that there has been no combined earnings of the Federal Reserve System beginning in September, 2022.… Continue Reading

I am pleased to report that Ballard Spahr’s Consumer Financial Services Group was once again ranked nationally by Chambers USA: America’s Leading Lawyers for Business in all three national consumer finance categories: Compliance, Enforcement and Investigations, and Litigation.  Chambers has consistently ranked our Consumer Financial Services Group ever since it began ranking firms in the U.S. … Continue Reading

As we recently reported, the CFPB issued its final rule, titled the Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders Final Rule on June 3, 2024. The CFPB touts the registry as something that will help detect and deter repeat offenders of consumer financial protection laws, even though the registration requirements apply to an entity subject to a single consent order and in full compliance with the order.… Continue Reading