John D. Socknat

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If there was any doubt about how the Consumer Financial Protection Bureau (“CFPB”) (under current leadership) feels about what it calls “home equity contracts” (also known as shared appreciation agreements, shared equity agreements, home equity investments, among other names) its actions last week make it clear. 

Among the flurry of issuances, enforcement actions and guidance coming out of the CFPB in the lead up to January 20, the bureau took aim at home contracts with i) the issuance of a Consumer Advisory warning consumers about the risks of these types of agreements, ii) the issuance of an Issue Spotlight, which similarly addressed potential risks to homeowners and provided a detailed summary of how these types of products typically work and how their features compare other home equity products, and iii) the filing of an amicus brief in Roberts v.… Continue Reading

In the wake of the Office of Administrative Law’s approval of its registration and reporting requirements for providers of income-based advances, private postsecondary education financing, debt settlement services, and student debt relief services, California’s Department of Financial Protection and Innovation (“DFPI”) has issued an invitation for comment on “what other industries…the DFPI should establish registration and reporting requirements for under the [California Consumer Financial Protection Law].”… Continue Reading

On October 11, California’s Office of Administrative Law (“OAL”) approved the Department of Financial Protection and Innovation’s (“DFPI’s”) registration rulemaking for providers of the following products:

  • Income-Based Advances (more commonly known as earned wage access (“EWA”) products);
  • Private Postsecondary Education Financing (including income share agreements (“ISAs”);
  • Debt Settlement Services; and
  • Student Debt Relief Services.
… Continue Reading

The CFPB has scheduled two sessions to provide a preview of its nonbank enforcement order registry. The virtual-only discussions are scheduled for September 30 and October 9. Both sessions will feature the same content.

The bureau said that the events are intended for compliance staff that will be registering covered orders with the CFPB’s nonbank enforcement order registry.… Continue Reading

The Conference of State Bank Supervisors (CSBS) will release the first phase of major enhancements to the Nationwide Multistate Licensing System & Registry (NMLS) on July 20.

The updates are intended to address certain issues industry users have raised, including allowing users to create a username and password without having to contact the NMLS Call Center, and allowing users who have multiple NMLS accounts to access their accounts using one username and password.… Continue Reading

On April 20, 2024, the Pennsylvania Department of Banking and Securities (“DoBS”) issued a policy statement (“Policy Statement”) to “clarify” that the Department’s interpretation of the term “money” in the Pennsylvania Money Transmitter Act (“MTA”) includes “virtual currency, such as Bitcoin.”  The MTA provides in part that “[n]o person shall engage in the business of transmitting money by means of a transmittal instrument for a fee or other consideration with or on behalf of an individual without first having obtained a license from the department.’”… Continue Reading

In April 2024, Wisconsin and Maine enacted the Model Money Transmission Modernization Law (“MTML”) to implement the Conference of State Bank Supervisors’ Model Money Transmission Modernization Act.  As of April 22, 2024, twenty-one states have fully or partially enacted the model act, and eight additional states having legislation pending.

On April 4, 2024, Wisconsin enacted the MTML, which becomes effective January 1, 2025. … Continue Reading

The South Dakota Division of Banking issued a Memorandum notifying all licensed money lenders and non-residential mortgage lenders of their Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) obligations under a 2020 Final Rule published by the Financial Crimes Enforcement Network (“FinCEN”). The final rule became effective in 2020, and the Memorandum requires licensees to comply by March 31, 2024.… Continue Reading

Maryland has joined the ranks of states considering legislation that would codify elements of “true lender” theory in an effort to impose federally preempted state licensing requirements and rate caps on loans to Maryland residents.

House Bill 254 (HB 254), introduced on January 10, 2024 in the Maryland House of Delegates, would add Subtitle 15 – the “True Lender Act” – to Title 12 (Credit Regulations) of the Maryland Commercial Law.… Continue Reading