CFPB, Federal Agencies, State Agencies, and Attorneys General
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
The Conference of State Bank Supervisors (CSBS) has withdrawn its lawsuit filed in D.C. federal district court in December 2020 seeking to block the OCC from granting a national bank charter to Figure Technologies Inc. The lawsuit represented the CSBS’s third challenge to the OCC’s authority to issue special purpose national bank (SPNB) charters to non-depository fintech companies or to uninsured deposit-taking fintechs. … Continue Reading
Ballard Spahr attorneys have now completed a months-long project in updating and expanding a 2017 White Paper addressing bank-model lending—programs involving partnerships between banks (or savings associations) and fintech or other nonbank companies in the interstate delivery of loans.
The new White Paper, which runs 49 pages single-spaced, is designed to serve as a comprehensive survey of laws, cases and regulatory attitudes addressing bank-model lending. … Continue Reading
The Consumer Bankers Association has sent a letter to Rohit Chopra, the incoming CFPB Director, in which it urges the CFPB to adopt a larger participant rule for fintech consumer lenders.
Under the Dodd-Frank Act, in addition to authority to supervise nonbank entities in the residential mortgage, private student lending, and payday lending markets, the CFPB has authority to supervise nonbank entities considered to be “a larger participant of a market for other consumer financial products or services.” … Continue Reading
Last week, the Federal Reserve Board published a paper on partnerships between community banks and fintech companies, “Community Bank Access to Innovation through Partnerships.” The Fed’s publication of the paper is another indication of the increased attention that regulators are paying to bank relationships with fintechs. It follows the publication at the end of last month of a guide by the Fed, OCC, and FDIC that is intended to assist community banks in conducting due diligence when considering relationships with fintechs.… Continue Reading
