The New York Department of Financial Services (NYDFS) has issued an Online Lending Report that calls for the application of New York usury limits to all online lending and increased regulation of online lenders making loans to New York consumers and small businesses.
The New York Department of Financial Services has sent a letter directed to businesses that the DFS “understands…may be involved in online lending in the State of New York” and that asks recipients to complete a “New York Marketplace Lending Survey” that they can access online.
The letter states that the DFS is conducting the survey to gather information for a public report that it is required to issue by July 1, 2018 and which must include information about online lenders operating in New York and their business practices, including lending practices, interest rates and costs charged, and consumer complaints and investigations about the industry. … Continue Reading
A bipartisan group of five House members introduced a bill (H.R. 4439) last month that is intended to address the so-called “true lender” issue, which creates risk with respect to some loans made by banks with substantial marketing and servicing assistance from nonbank third parties, and then sold shortly after origination.… Continue Reading
The Office of the Comptroller of the Currency has issued a new bulletin (2017-21) containing fourteen frequently asked questions to supplement OCC Bulletin 2013-29 entitled “Third-Party Relationships: Risk Management Guidance.” The 2013 bulletin provided updated guidance for managing operational, compliance, reputation, strategic, and credit risk presented by third-party business relationships of national banks and federal savings associations.… Continue Reading
Two state-chartered banks recently filed complaints for declaratory judgment and injunctive relief against the Administrator of the Uniform Consumer Credit Code for the State of Colorado, Julie Ann Meade. The complaints were filed in Colorado federal court and seek to permanently enjoin enforcement actions brought by Meade against the banks’ non-bank partners who, according to the complaints, market and service loans originated by the two banks and which the banks sometimes sells to their partners.… Continue Reading
In a recent blog post, Alan Kaplinsky and Scott Pearson wrote about the remarks made by CFPB Director Richard Cordray and Comptroller of the Currency Thomas Curry at the LendIt USA conference in New York City earlier this month. In the blog post, we expressed our strong disagreement with Comptroller Curry’s refusal to author an interpretive opinion to address the disruption in the lending markets caused by the Second Circuit’s Madden decision and promised to share our reasons at a later date for why we think that the OCC should go even further and propose a rule to address Madden. … Continue Reading
Earlier this week, we attended the LendIt USA conference in New York City, a leading annual fintech conference, at which both CFPB Director Richard Cordray and Comptroller of the Currency Thomas Curry spoke.
Director Cordray began his remarks by returning to his familiar “level playing field” theme, observing that “[e]venhanded oversight of all providers” regardless of size “is a basic rule of the road for effective regulation of the financial marketplace” and that “[n]obody gets a free pass to exploit regulatory arbitrage; everyone must be held to the same standards of compliance with the law.” … Continue Reading
On October 13, 2016, the Brookings Institute will hold an event in Washington, D.C. titled: “How to make fintech work for all Americans.” Speakers include industry representatives and an FDIC representative. Brookings describes the event as “a conversation about the effects of the fintech boom, with a particular focus on how regulation and public policy can enhance or hinder the industry’s ability to solve some of the more intractable problems facing middle-class.”… Continue Reading
While the CFPB has indicated it will be monitoring FinTech innovations, it has not yet held a public event devoted to FinTech or financial innovation. Both the FTC and OCC have already held such events this year and now the Federal Reserve’s Board of Governors has announced that it will be hosting a research and policy conference on financial innovation, “Online Lending to Households and Small Businesses,” in Washington, D.C.… Continue Reading
Tomorrow, July 11, the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit will hold a hearing titled: “Examining the Opportunities and Challenges with Financial Technology (“FinTech”): The Development of Online Marketplace Lending.” According to the Committee memorandum, the hearing “will give Committee members the opportunity to assess the development of the FinTech market, including how online lenders and banks interact. … Continue Reading