On February 2, 2023, New York Governor Kathy Hochul released her 2024 fiscal budget proposal, which included banking policy to “Protect New Yorkers from Predatory Banking Fee” in the Executive Budget Briefing Book.  The Briefing Book states:

“The Executive Budget includes nation-leading legislation that comprehensively addresses abusive bank fee practices, which tend to disproportionally harm low- and moderate-income New Yorkers, including stopping the opportunistic sequencing of transactions in a way designed to maximize fees charged to consumers, ending other unfair overdraft and non-sufficient funds fee practices, and ensuring clear disclosures and alerts of any permissible bank processing charges.”… Continue Reading

The Ninth Circuit Court of Appeals recently issued an Order vacating a nearly $8 million judgment won by the Consumer Financial Protection Bureau (CFPB) in its lawsuit against Nationwide Biweekly Administration, Inc. (Nationwide), an Ohio mortgage services company.  The Ninth Circuit remanded the case to the district court for further analysis based on recent rulings related to the constitutionality of the CFPB.… Continue Reading

In a motion for a preliminary injunction and accompanying memorandum of points and authorities, the California Department of Financial Protection and Innovation (DFPI) is asking a California state court to order fintech Opportunity Financial LLC (OppFi) to stop facilitating loans to California borrowers from its partner FinWise Bank at interest rates above the interest rate cap (generally 36% plus the Federal Funds Rate) imposed by the California Financing Law (CFL).… Continue Reading

As previously reported, in July 2020 the CFPB filed the first ever redlining complaint against a nonbank mortgage company, Townstone Mortgage (Townstone), under the Equal Credit Opportunity Act (ECOA) and Consumer Financial Protection Act (CFPA).  The US District Court for the Northern District of Illinois recently granted Townstone’s motion to dismiss the CFPB’s complaint on the grounds that the ECOA applies to applicants and not to prospective applicants.  … Continue Reading

The briefing on the CFPB’s certiorari petition seeking review of the Fifth Circuit panel decision in Community Financial Services Association of America Ltd. v. CFPB was distributed to the Supreme Court yesterday for consideration at its February 17 conference.  In that decision, the Fifth Circuit panel held the CFPB’s funding mechanism violates the Appropriations Clause of the U.S.… Continue Reading

In a win for Ballard Spahr client Specialized Loan Servicing LLC (SLS), the U.S. Court of Appeals for the Ninth Circuit recently held that SLS, a mortgage servicer, properly reported a Covid-19 forbearance plan under the CARES Act amendments to the Fair Credit Reporting Act (FCRA).  The amendments require furnishers to “report [a consumer’s] credit obligation or account as current” if the furnisher agreed to provide forbearance or other relief on a consumer’s loan.… Continue Reading

After reviewing the licensing/chartering/approval structures that DFS uses for entities seeking to engage in virtual currency activities, we discuss the role of guidance in DFS’s regulation and oversight of virtual currency, particularly new DFS guidance on digital asset custody practices and DFS expectations for how entities acting as digital asset custodians can better protect customers in the event of an insolvency or similar proceeding. … Continue Reading

We suspected something was afoot when December 2022 came and went without the CFPB announcing its annual inflation adjustments to the credit card late fee safe harbor amounts set forth in Regulation Z (which implements the Truth in Lending Act).  With the CFPB’s issuance yesterday of a proposal to substantially reduce the safe harbor amounts, eliminate the annual inflation adjustments, and make other significant changes to the Regulation Z rules for credit card late fees, we now know the reason for the CFPB’s inaction on the adjustments.… Continue Reading

On Friday, January 27, California Attorney General Rob Bonta announced an investigative sweep of businesses that provide mobile apps, issuing warning letters to those that AG Bonta alleges failed to comply with the California Consumer Privacy Act (CCPA).  This sweep focused specifically on “popular retail, travel, and food service industry apps” that failed to comply with consumer opt-out requests or otherwise failed to offer mechanisms for consumers to stop the sale of their personal information.   … Continue Reading