CFPB, Federal Agencies, State Agencies, and Attorneys General
The Government Accountability Office (GAO) has issued a new report entitled “Financial Technology: Products Have Benefits and Risks to Underserved Consumers, and Regulatory Clarity Is Needed.”
The report focuses on the following four types of fintech products:
We begin with a discussion of the goals and themes of FTA’s recent summit and AFC’s advocacy regarding retention of the strategic plan option under the Community Reinvestment Act. We then discuss consumer benefits of buy-now-pay-later (BNPL) and regulatory concerns raised by the CFPB in its BNPL report, state level regulatory issues facing fintechs, the Treasury’s report on bank/fintech relationships and takeaways for fintechs, consumer benefits of earned wage access products and artificial intelligence and regulatory concerns raised by the CFPB, and reactions to the CFPB’s Section 1033 rulemaking.… Continue Reading
The Treasury Department has released a report entitled “Assessing the Impact of New Entrant Non-bank Firms on Competition in Consumer Finance Markets.” The report was issued in response to President Biden’s July 2021 Executive Order on promoting competition. That Order directed the Secretary of the Treasury to issue a report assessing how the entry of large technology firms and other non-banks into consumer finance markets has affected competition.… Continue Reading
The Biden Administration recently announced a slate of new public and private sector initiatives aimed at advancing racial equity by delivering “capital and resources to underserved small businesses and the community lenders who serve them.” Among these initiatives was a proposed rule change for the Small Business Administration (SBA) that would increase the number of nonbanks, including Fintechs, eligible to offer SBA 7(a) loans. … Continue Reading
The OCC’s announcement that it will establish an Office of Financial Technology to “bolster the agency’s expertise and ability to adapt to a rapidly changing banking landscape” should come as no surprise to those who have been following recent pronouncements of Acting Comptroller Michael J. Hsu.
Over the past few months, Mr.… Continue Reading
Since the beginning of Michael Hsu’s tenure as Acting Comptroller of the Currency, bank/fintech partnerships have been a focus of OCC concern. Although bank lending partnerships with fintechs continue to receive OCC attention, recent remarks by OCC officials indicate that OCC scrutiny is now also directed at partnerships outside of the lending arena.… Continue Reading
On June 1, 2022, plaintiff Kristen Michael filed a class action lawsuit against FinTech lender Opportunity Financial, LLC (“OppFi”) on behalf of herself and a putative class alleging, inter alia, that OppFi loans money at an interest rate upwards of 130% higher than allowed by state law. Ms. Michael alleges that OppFi offers “OppLoans” in over 30 states, whereby it originates, underwrites, services and enforces these loans, even claiming the loans on its financial reports. … Continue Reading
On May 25, 2022, my colleagues, Mike Gordon, John Culhane and Ron Vaske published a blog which reported on a press release issued by the CFPB on the prior day entitled “CFPB Launches New Effort to Promote Competition and Innovation in Consumer Finance.” The blog stated:
… Continue ReadingIn its press release, the CFPB states that “[a]fter a review of these programs [the No Action Letter (NAL) and Compliance Assistance Sandbox (CAS) programs], the agency concludes that the initiatives proved to be ineffective and that some firms participating in these programs made public statements indicating that the Bureau had conferred benefits upon them that the Bureau expressly did not.”
The CFPB has announced that it plans to invoke its “dormant authority” to supervise nonbanks engaged in conduct that poses risk to consumers. In conjunction with the announcement, the CFPB issued a procedural rule concerning the confidentiality of proceedings in which the CFPB invokes such authority. These moves by the CFPB are notable for two reasons. … Continue Reading
The OCC announced this week that it has conditionally approved applications from Social Finance Inc. (SoFi) to create SoFi Bank, National Association (SoFi Bank, N.A.), as a full service national bank headquartered in Cottonwood Heights, Utah.
The OCC’s press release indicates that as part of the transaction, SoFi Bank, N.A. is acquiring Golden Pacific Bank, National Association, an insured national bank, and will continue to offer a range of local commercial-focused loan and deposit products previously offered by Golden Pacific. … Continue Reading
