CFPB, Federal Agencies, State Agencies, and Attorneys General
The Introduction to the Complaint which was filed by the CFPB on May 17, 2024 against Solo Funding, Inc. in the United States District Court for the Central District of California – Western Division Los Angeles (Judge R. Gary Klausner) describes the CFPB’s claims as follows:
INTRODUCTION
Shortly after the Supreme Court issued its 7-2 opinion in CFSA v. CFPB, holding that the funding mechanism for the CFPB created in the Dodd-Frank Act (a capped amount each year from the “combined earnings of the Federal Reserve System”) is Constitutional, several scholars, one practitioner (me) and legislators began to focus on a different statutory and constitutional infirmity —namely, the fact that since September 2022, the Federal Reserve System had no combined earnings out of which it could lawfully fund the CFPB.… Continue Reading
On June 13, 2024, CFPB Director Rohit Chopra appeared before the House Financial Services Committee for a hearing, “The Semi-Annual Report of the Bureau of Consumer Financial Protection.” As we expected, the House Financial Services Committee also tackled the earnings issue raised by Senator John Kennedy (R-LA). We previously blogged that CFPB Director Rohit Chopra was dismissive of the argument that the CFPB was unlawfully funded out of losses of the Federal Reserve Banks.… Continue Reading
It took about an hour for someone on the Senate Finance Committee during its hearing today to mention the “elephant in the room” — namely, the fact that the CFPB is only allowed under Dodd-Frank to be funded out of “combined earnings of the Federal Reserve System” and that there has been no combined earnings of the Federal Reserve System beginning in September, 2022.… Continue Reading
Although neither the CFPB, the Federal Reserve Board, nor the Treasury has responded to Professor Emeritus Hal Scott’s op-ed on May 20 in the Wall Street Journal, my interview with Professor Scott on our Consumer Finance Monitor Podcast episode of June 6, Alex Pollock’s blog post on May 21 on The Federalist Society website, or my blog post published on this blog on May 22, a few consumer advocates have responded. … Continue Reading
On May 3, 2024, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Federal Deposit Insurance Corporation (“FDIC”), and the Office of the Comptroller of the Currency (“OCC”) jointly released the “Third-Party Risk Management: A Guide for Community Banks” (the “Guide”), presenting it as a resource for community banks to bolster their third-party risk management programs, policies, and practices.… Continue Reading
Components of the U.S. Federal Reserve System recently prevailed in two lawsuits in which both plaintiffs – Custodia Bank and PayServices Bank – alleged the defendants were required to grant the plaintiffs’ master account requests and wrongfully denied them master accounts. Both the United States District Court for the District of Wyoming and the United States District Court for the District of Idaho rejected these claims and instead ruled as a matter of law that the respective regional Federal Reserve Banks had discretion to deny the plaintiffs’ requests for a master account. … Continue Reading
Our special guest is Zarik Khan, Founder of Finsolute Advisors. In October 2023, the Federal Reserve Board issued a proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction. We first look at the roles of the various parties involved in a typical transaction in which a consumer uses a debit card to make a purchase from a merchant and the various fees imposed in connection with the transaction. … Continue Reading
On October 24, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation issued a final rule amending their regulations implementing the Community Reinvestment Act. Although the final rule is effective April 1, 2024, the compliance date for the majority of the rule’s provisions is January 1, 2026. … Continue Reading
The Board of Governors of the Federal Reserve (FRB) is holding an open meeting on October 25, 2023 to discuss proposed revisions to the Board’s debit interchange fee cap contained in Regulation II, which implemented the Durbin Amendment. For large issuers (with $10 billion or more in assets), Section 235.3(a) of Regulation II requires an issuer to charge interchange fees that are “reasonable and proportional to the cost incurred by the issuer with respect to the electronic debit transaction” and Section 235.3(b) of Regulation II caps such fees at 21 cents plus 0.05% of the transaction.… Continue Reading
