The Consumer Financial Protection Bureau recently released a set of consumer protection principles designed to protect consumer interests in the market for services built around consumer-approved use of financial information. The principles are targeted at so-called 'data aggregation' or 'screen scraping' services that collect customer information in order to provide financial planning or other services.
The Office of the Comptroller of the Currency recently issued a set of frequently asked questions (FAQs) to supplement its 2013 bulletin on third-party relationship risk management. The FAQs affirm the bulletin's broad applicability, while re-emphasising the need for third-party relationship oversight to be risk based and tailored to individual institutions' needs and delving into several more detailed compliance questions.
In a significant setback for the Consumer Financial Protection Bureau, a panel of the DC Circuit recently held that its structure violates the Constitution and invalidated its order to impose a $109 million civil penalty and broad injunctive relief on mortgage lender PHH for alleged violations of the Real Estate Settlement Procedures Act.
The Consumer Financial Protection Bureau recently issued its final rule to extend consumer protections to most pre-paid accounts and to extend certain other protections for credit cards to pre-paid accounts that are associated with certain lines of credit or overdraft credit plans. The rule will cover reloadable and non-reloadable plastic pre-paid cards, certain mobile wallets and electronic accounts that hold pre-paid value and the financial institutions that issue such pre-paid accounts.
The Federal Deposit Insurance Corporation recently issued proposed examination guidance on third-party lending arrangements. The proposed guidance would apply broadly to any lending arrangement where a third party performs a significant aspect of the lending process and may affect a swathe of loan programmes, including private-label and co-branded credit cards and marketplace, automobile and basic mortgage lending.
The Consumer Financial Protection Bureau (CFPB) has issued a proposal that would ban the use of arbitration clauses that prohibit class actions and require companies to report to the CFPB on all arbitrations that do occur. The proposal has been anticipated for several years, as the Dodd-Frank Act required the CFPB to study consumer arbitrations and provided authority for the CFPB to issue a rule to address its findings.
The Consumer Financial Protection Bureau recently issued a final rule that significantly amends and expands the scope of data reporting requirements under Regulation C and the Home Mortgage Disclosure Act. The rule implements changes to existing Home Mortgage Disclosure Act data reporting and includes an entirely new set of data points that institutions were not previously required to collect and report.
A federal court has ruled that disparate impact claims are not cognisable under the Fair Housing Act. This is the latest decision in a long-developing debate over the use of disparate impact claims in discrimination cases brought under the Fair Housing Act and the Equal Credit Opportunity Act.
Companies often ask how they should approach a Consumer Financial Protection Bureau (CFPB) enforcement matter if it lands on their desk. Because the industry is still trying to figure out how the CFPB operates, they are concerned about making a misstep during the course of an investigation. This update sets out essential tips from a former enforcement attorney for successfully navigating an investigation while positioning your company for the best outcome.
Federal banking agencies recently released an inter-agency statement responding to inquiries about whether a creditor would be liable under the disparate impact doctrine of the Equal Credit Opportunity Act and its implementing regulation, Regulation B, by originating only qualified mortgages.
The Consumer Financial Protection Bureau has brought its first enforcement action for alleged abusive acts or practices under the Consumer Financial Protection Act of 2010. The allegations relate to misrepresentations commonly associated with deceptive acts claims, but also emphasise elements in the statutory definition of 'abusive', including the reasonable reliance of vulnerable consumers on the debt-settlement company.
The Consumer Financial Protection Bureau (CFPB) recently issued guidance stating that it intends to use its regulatory tools, including enforcement lawsuits, to address discriminatory practices in auto lending. The CFPB bulletin represents an important development for the exercise of its fair-lending authority, as well as its authority over auto loans.
The Federal Trade Commission and the Consumer Financial Protection Bureau have announced a joint investigation into allegedly misleading mortgage-related advertisements. This is the first time that the two agencies have announced a joint enforcement action. Potentially affected companies should review their practices in light of this regulatory activity.
In a case with potentially significant implications for state regulation of national banks, the California Supreme Court has ruled unanimously that a state law mandating the form and content of disclosures printed on the front of convenience checks issued to credit card customers was pre-empted by the National Bank Act.
The Consumer Financial Protection Bureau recently announced a new Know Before You Owe project. The stated goal of the project is to simplify credit card agreements to enhance consumer understanding of the prices, risks and terms of credit cards. The centrepiece of the project is a prototype two-page credit card agreement, which is intended to convey the key terms of a credit card to a consumer.
The Consumer Financial Protection Bureau (CFPB) recently issued a notice and request for comment on defining the non-bank entities that will be subject to its supervision under the Dodd-Frank Act. Financial service providers that are not banks should consider whether, under the notice, they might be subject to supervision by the CFPB as a larger participant in designated markets for other consumer financial services or products.
The Federal Reserve has issued a proposal to provide guidance on implementing the new requirements for advance action notices, and the Federal Reserve and the Federal Trade Commission jointly issued proposed regulations addressing risk-based pricing notices.
The Board of Governors of the Federal Reserve System has released for comment a proposed regulation to implement the debit interchange fee and network exclusivity and routing provisions of the Durbin Amendment. The amendment added a new Section 920 to the Electronic Fund Transfer Act regarding debit interchange transaction fees and rules for debit card transactions.
The Federal Reserve System has issued proposed regulations regarding limitations on credit card penalty fees and credit card issuers' duty to review periodically all rate increases. The proposal would limit penalty fees, such as late fees, overlimit fees and returned cheque fees that credit card issuers charge. It would also require issuers to review accounts for which rates have been increased and reduce rates as required.
The Board of Governors of the Federal Reserve System and the Federal Trade Commission have jointly issued a final rule to implement the requirements of Section 615(h) of the federal Fair Credit Reporting Act. Section 615(h) was added by the Fair and Accurate Credit Transactions Act and provides for so-called 'risk-based pricing' notices.
The Board of Governors of the Federal Reserve System has released its final rule regarding overdraft services. The rule creates an opt-in rule under which financial institutions may not charge overdraft fees to consumers in connection with automated teller machine transactions and one-off debit card transactions, unless the consumer has affirmatively consented to such fees.
The Board of Governors of the Federal Reserve System has issued a proposed amendment to Regulation Z to implement the Credit Card Accountability Responsibility and Disclosure Act of 2009. The act enacted substantial new limitations and requirements for credit card issuers. The proposal provides much-needed detail on how those new limitations and requirements will apply to the industry.
The Federal Reserve has released implementing regulations for two key provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009. The provisions require creditors to deliver periodic statements at least 21 days before a due date and to provide notice of changes relating to credit card accounts at least 45 days in advance of the effective date.
The House of Representatives and the Senate have both passed the Credit Card Accountability Responsibility and Disclosure Act of 2009. One of the most significant provisions of the act is a provision that may be used to limit certain credit card charges substantively. Another key provision relates to issuers' apparent obligations to reduce annual percentage rates in some circumstances.
President Barack Obama recently signed the Omnibus Appropriations Act 2009 into law. Although the primary purpose of the legislation was to appropriate funds to various federal agencies, members of Congress also used the legislation as a vehicle to enact substantive changes to various laws with little or no notice or debate. Of particular note to consumer lenders is Section 626 of the act.
Federal agencies have issued a final rule relating to unfair or deceptive acts or practices relating to credit cards. The board also issued final rules revising the open-end credit portions of Regulation Z and imposing certain disclosure obligations under Regulation DD in connection with overdraft services offered by banks.
In a significant departure from its previous stance, the Federal Deposit Insurance Corporation (FDIC) has published notice of a new General Counsel's Opinion No 8 which addresses whether funds underlying stored-value cards and other non-traditional access mechanisms are to be considered deposits insured by the FDIC. The new opinion should be reviewed by all participants in stored-value programmes.
The US Court of Appeals for the Ninth Circuit has issued a decision in American Bankers Association v Lockyer. This litigation focuses on the restrictions on sharing information among affiliates in the California Financial Information Privacy Act and the extent of federal pre-emption regarding the exchange of information among affiliated parties under the federal Fair Credit Reporting Act.
On May 2 2008 the Board of Governors of the Federal Reserve System, the Office of Thrift Supervision and the National Credit Union Administration released an expansive proposal to prohibit or regulate a number of practices in credit card lending. The proposal is a dramatic and expansive exercise of the agencies’ powers to issue regulations on unfair and deceptive acts and practices.
On May 8 2008 the Board of Governors of the Federal Reserve System and the Federal Trade Commission issued a proposed rule to implement Section 615(h) of the federal Fair Credit Reporting Act relating to risk-based pricing notices. This update addresses the specific risk-based notice requirements proposed by the agencies, as well as the proposed exceptions to those requirements.
The Board of Governors of the Federal Reserve recently issued for comment an extensive proposed amendment to Regulation Z that would impose many significant new requirements in connection with residential mortgage loans. Many of the new proposed requirements apply to all owner-occupied residential mortgage loans, while others apply to a newly created class of higher-priced mortgage loans.
The federal financial institution regulatory agencies and the Federal Trade Commission have published final rules on identity theft 'red flags' and address discrepancies. Among other things, financial institutions and creditors that hold a covered account must develop and implement a written programme for combating identity theft in connection with new and existing accounts.
The Second Circuit has handed down an eagerly awaited decision in Clearing House Association v Cuomo. The court held that the National Bank Act blocked the New York attorney general from probing the loan practices of national banks and their operating subsidiaries, stating that federal regulations shield such institutions from investigation and enforcement action by state officials.
The federal banking agencies and the Federal Trade Commission have recently released final rules implementing Section 624 of the federal Fair Credit Reporting Act in relation to the ability of one affiliate to use certain information obtained from another affiliate to make solicitations to consumers.
The Board of Governors of the Federal Reserve System recently issued a proposed amendment to Regulation Z that would make substantial changes to many of the disclosures with which creditors are required to provide consumers in connection with credit card accounts and other open-end credit plans.
In Watters v Wachovia Bank the court held by a five-to-three majority that the National Bank Act pre-empts Michigan statutes requiring operating subsidiaries of national banks to register with, and be subject to examination by, state regulators.
Congress has recently passed the Financial Services Regulatory Relief Act 2006. The act represents a long-anticipated bank regulatory relief package that streamlines certain regulations pertaining to financial institutions, although the act is more limited than many in the banking industry had wanted. In addition, the act expands the enforcement power of the federal banking agencies.