CFPB, Federal Agencies, State Agencies, and Attorneys General
The CFPB has taken action against Global Tel Link Corporation (GTL) over allegations that the company took millions of dollars from a half-million accounts and blocked money transfers to consumers who are incarcerated. Those prisoners relied on those funds for food, medicine and clothing.
The CFPB is ordering GTL and its subsidiaries to stop the allegedly illegal activity, pay at least $2 million in redress to victims and pay $1 million civil monetary penalty.… Continue Reading
The CFPB has issued a final rule to supervise large nonbank financial services providers that offer general-use digital consumer payment applications such as digital wallets and peer-to-peer payment apps.
Many of those apps are owned by large technology companies. While banks and credit unions are subject to CFPB supervisory examinations, many of the largest technology firms offering consumer payment services have not been subject to that scrutiny, according to the CFPB.… Continue Reading
On November 13, 2024, the Financial Crimes Enforcement Network (FinCEN) issued FIN-2024-Alert004 to help financial institutions identify fraud schemes associated with the use of deepfake media created with generative artificial intelligence (GenAI) in response to increased suspicious activity reporting. “Deepfake media” are a type of synthetic content that use artificial intelligence/machine learning to create realistic but inauthentic videos, pictures, audio, and text to circumvent identity verification and authentication methods.… Continue Reading
On October 16, 2024, the Bank Policy Institute and the Clearing House Association filed a motion to intervene in Corner Post, Inc. v Board of Governors of the Federal Reserve System. On July 1, 2024, the Supreme Court sided with Corner Post in holding that a Section 702 claim under the Administrative Procedure Act (APA) to challenge a final agency action first accrues when the plaintiff is injured by final agency action and has the right to assert it in court.… Continue Reading
An Illinois federal judge has dismissed a proposed class action lawsuit that alleged that two Midwestern banks failed to provide repayment disclosures to borrowers, in a case that was unique because the CFPB came to the defense of the financial institutions.
U.S. District Judge Manish Shah of the Northern District of Illinois, had asked the bureau to comment on whether the Bank of Orrick violated federal requirements to provide borrower Jose Lopez with disclosures, including how long it would take for him to repay his loan if he only paid the monthly minimum payment.… Continue Reading
The CFPB has issued a proposed rule with a small amendment to disclosure requirements for certain international remittances and money transfers.
The bureau is seeking public comments on a proposed amendment that is intended to provide clearer information about the types of inquiries that might be better addressed by remittance companies before contacting the bureau or relevant state regulator.… Continue Reading
On September 17, 2024, the FDIC board approved a notice of proposed rulemaking that would increase recordkeeping obligations for bank deposits received from third party, non-bank companies that accept those deposits on behalf of consumers and businesses.
Agency officials said that non-banks often deposit funds together into a single custodial account.… Continue Reading
On September 17, 2024, the CFPB issued Consumer Financial Protection Circular 2024-05 on improper overdraft practices. The circular reminded financial institutions of their obligation to retain records that prove the consumer consented to the institution’s payment of ATM and one-time debit card transactions.
The Electronic Funds Transfer Act (EFTA) and Regulation E (12 CFR § 1005.17(b)(1)), prohibit financial institutions from charging an overdraft fee for paying ATM or one-time debit card transactions (“regulated overdrafts”) unless an institution: (i) provides the consumer with its overdraft service disclosure (a/k/a What You Need to Know About Overdraft and Overdraft Fees); (ii) provides the consumer a reasonable opportunity to opt in; (iii) obtains the consumer’s affirmative consent, or opt-in; and (iv) provides the consumer with a written confirmation of the consent, which includes a statement informing the consumer of the right to revoke such consent.… Continue Reading
Innovation and technology are not the magic wands that will help low-income Americans climb out of debt; they often are tools used to prey on the neediest people, Seth Frotman, the CFPB’s general counsel told the Poverty Law Conference earlier this month.
“We hear a lot about ‘innovation’ and ‘financial technology’ in the consumer financial marketplace,” Frotman said, adding that it is not uncommon for such businesses to boast about how they serve an underprivileged population.… Continue Reading
Some dollar store chains and other retailers now are charging consumers for obtaining cash back on debt or prepaid card purchases—transactions that generally have been free in the past–the CFPB reported.
Obtaining cash back on such purchases may be particularly important in banking deserts and in areas where financial institutions charge significant fees, the bureau said.… Continue Reading
