On July 18, the Federal Housing Finance Agency (“FHFA”) announced the launch of a new Office of Financial Technology with the goal of advancing effective risk management as it evaluates fintech developments in the housing finance space.  The FHFA also issued a request for information (“RFI”) seeking public input on how to facilitate responsible innovation, identify barriers or challenges to implementing fintech into housing finance, support equity for homeowners and renters, and increase efficiency and effectiveness in the compliance and regulatory processes. … Continue Reading

On July 20, 2022, the Connecticut Department of Banking (the “Department”) issued a Consumer and Industry Advisory on Money Transmission (the “Advisory”).  The Department believes the Advisory was necessary for two reasons.  First, the Department notes the “significant disruption to traditional money transmission systems” caused by the “increased use of technology to enable immediate payment mechanisms” and “the explosion of virtual currency.” … Continue Reading

On July 20, 2022, the Federal Trade Commission (“FTC”) and 18 state attorneys general led by New York Attorney General Letitia James announced that they have entered into a settlement with Harris Originals of NY, Inc. and related entities (collectively, “Harris Jewelry”), a national jewelry retailer that markets and sells military-themed gifts, to resolve their lawsuit which alleged that Harris Jewelry had engaged in unlawful sales and credit practices targeting servicemembers. … Continue Reading

Director Chopra gave interviews this week to several news reporting outlets including American Banker, Law 360, Politico, and Bloomberg.  Below are some of highlights of the interviews as reported by those outlets, several of which also provided interview transcripts.  We also share our reactions to Director Chopra’s comments.

CFPB priorities and status of rulemaking activity.… Continue Reading

In a recent consent order with a national bank, the CFPB found that the bank committed UDAAP violations in its process for handling garnishment orders and by including certain waiver language in its deposit account agreements.  We discuss the specific aspects of the bank’s process that the CFPB found to be improper and what banks should consider when reviewing their own garnishment procedures in light of the consent order. … Continue Reading

The Consumer Financial Protection Bureau (CFPB) is “encouraging” student loan servicers to identify their military borrowers in order to conduct proactive outreach encouraging them to consolidate their loans and submit applications for forgiveness under the Public Service Loan Forgiveness Program (PSLF). 

Servicemembers (and any other eligible public service applicants) must apply for PSLF by October 31, 2022 to be considered for relief under a limited waiver that temporarily relaxes program rules allowing more borrowers to qualify. … Continue Reading

Private education lenders doing business in Illinois now have access to official informational guides and templates for meeting the November 1, 2022, reporting requirements under the state’s new Know Before You Owe Private Education Loan Act (“KBYO”). 

Promoted as a means to make borrowers aware of federal student loan options before they turn to private loans, KBYO also seeks to collect and publicize data on private educational lending through an annual reporting obligation imposed on lenders. … Continue Reading

A Delaware federal court has refused to dismiss a class action complaint filed against a credit union that alleges the credit union violated Regulation E and the Delaware Consumer Fraud Act (CFA) even though the credit union’s overdraft opt-in notice tracked the language in the Regulation E model notice.  The decision should serve as a reminder to financial institutions of the need to make sure their opt-in notices accurately and fully describe their overdraft policies. … Continue Reading

Overdraft and NSF fees remain very much on the radar of the CFPB, the federal banking agencies, and certain state banking agencies.  The very fact that the CFPB continues to closely monitor bank call reports with respect to overdraft and NSF fee revenues demonstrates the Bureau’s ongoing focus on this issue. … Continue Reading

The Federal Reserve Board issued a proposal last week that would establish default rules for benchmark replacements in certain contracts that use as a reference rate the London Interbank Offered Rate (LIBOR), which will be discontinued in 2023.  The proposal implements the Adjustable Interest Rate (LIBOR) Act, which was enacted in March 2022. … Continue Reading