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Financial Services Law Insights and Observations


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  • OCC’s Hsu discusses creating economic opportunity for “new Americans”

    On April 10, Acting Comptroller of the Currency, Michael J. Hsu, delivered prepared remarks, during a public meeting of the Financial Literacy and Education Commission (FLEC).  During his remarks, Hsu underscored the significance of financial literacy and inclusion for “new Americans,” drawing from his own experience as a child of immigrants. Acknowledging the substantial contributions of immigrant communities to the U.S. economy, including through entrepreneurship and innovation, Hsu urged financial institutions to support a system that is inclusive and equitable. Hsu called for banks to expand services offered in languages other than English and to explore innovative means of accepting diverse forms of identification within the regulatory framework to facilitate greater access to financial services for foreign-born individuals who are more likely to be unbanked. The speech also highlighted the need for mortgage financing options that cater to the unique requirements of immigrant populations, including extending access to credit for individuals without traditional credit scores. Hsu specifically emphasized special purpose credit programs and community partnerships as a means to extend credit to new Americans. Hsu concluded by pointing to the OCC's resources aimed at bolstering the efforts of banks and their community partners in enhancing financial capability among immigrant populations. 

    Bank Regulatory Federal Issues OCC

  • OCC extends comment period on proposed rules for the Bank Merger Act

    On April 10, the OCC announced a notice published in the Federal Register extending the comment period for the OCC’s proposed rule on bank mergers. The NPRM titled, “Business Combinations under the Bank Merger Act,” was originally published on February 14. As previously covered by InfoBytes, the rule would amend procedures to include a policy statement that “summarizes the principles the OCC uses when it reviews proposed bank merger transactions under the Bank Merger Act.” Under the typical 60-day comment period, the comment period for the original NPRM would have closed on April 15. The OCC extended the comment period in response to a request to do so, to allow interested parties additional time to prepare and submit their comments. The notice will not not indicate who made the request. The new deadline for parties to submit comments is June 15.

    Bank Regulatory OCC Rulemaking Agenda Bank Merger Act

  • CSBS and FHFA sign agreement to enhance information sharing on nonbank mortgage companies

    Federal Issues

    On April 10, the Conference of State Bank Supervisors (CSBS) and the FHFA announced they have signed a memorandum of understanding (MOU) to enhance information sharing on nonbank mortgage companies. The MOU reportedly aimed to improve the ability to coordinate on market developments, identify and mitigate risks, and ultimately, further protect consumers, taxpayers, and the nation’s housing finance system. CSBS Board Chair, Lise Kruse, emphasized the value of collaboration between state and federal regulators to support a stable mortgage marketplace, given the distinct authority each supervisory agency maintained over the nonbank mortgage industry. According to the CSBS, state financial regulators primarily oversee nonbank mortgage companies, while the FHFA regulated significant entities like Fannie Mae and Freddie Mac, which served as important counterparties to the nonbank mortgage industry. According to FHFA Director, Sandra L. Thompson, the new information sharing protocols will enable both state and federal regulators to supervise the mortgage industry more effectively, leading to improved outcomes for all stakeholders. 

    Federal Issues FHFA CSBS Mortgages Nonbank Nonbank Supervision

  • FTC report to Congress suggests legislative enhancements on consumer protection

    Federal Issues

    On April 10, the FTC issued a report addressed to Congress detailing its efforts to collaborate with state attorneys general (AGs) from across the U.S. on consumer protection law enforcement goals. The report, titled “Working Together to Protect Consumers: A Study and Recommendations on FTC Collaboration with the State Attorneys General,” was issued pursuant to the FTC Collaboration Act of 2021 and included legislative recommendations to enhance the FTC’s consumer protection efforts. The report followed a request for information issued by the FTC in June 2023, seeking public comments on how the FTC might improve collaboration with state AGs to protect consumers from fraud and ensure fairness in the marketplace.

    The FTC's report was divided into three main sections:

    1. The first section outlined the existing collaborative practices between the FTC and state AGs, detailing their shared roles in combating frauds and scams, the respective law enforcement authority of the FTC and the AGs, and the ways federal and state enforcers can share the information they gather, including through networks such as the Consumer Sentinel Network consumer complaint database.
    2. The second section described best practices to ensure effective collaboration between the FTC and state AGs, including strong information-sharing practices and coordination of enforcement actions. It also suggested ways to expand the sharing of technical resources and expertise between federal and state agencies.
    3. The third section provided legislative recommendations aimed at improving collaboration efforts by providing the FTC with clearer authority to pursue legal actions. This section emphasized a request for Congress to restore the FTC’s authority to seek monetary refunds for consumers who have been defrauded, following a 2021 U.S. Supreme Court decision holding that such relief was not available to the Commission (covered by InfoBytes here). Additionally, this section suggested giving the FTC independent authority to seek civil penalties and clear authority to take legal action against facilitators of unfair or deceptive practices.

    In its report to Congress, the FTC emphasized the importance of a collaborative approach to consumer protection among enforcement agencies and states, continuing to seek ways to strengthen its ties with state AGs to address future challenges.

    Federal Issues FTC Congress State Attorney General Consumer Protection

  • FSB report outlines eight recommendations for bank liquidity preparedness

    On April 17, the Financial Stability Board (FSB) released a consultation report titled “Liquidity Preparedness for Margin and Collateral Calls,” which laid out eight policy recommendations intended to enhance the liquidity preparedness of nonbank market participants in certain markets. These policy recommendations came from several reviews by the Basel Committee on Banking Supervision, the Committee on Payments and Market Infrastructures, and the International Organization of Securities Commissions analyzing recent incidents of liquidity stress. The eight recommendations comprised liquidity risk management, liquidity stress testing, and collateral management practices.

    The first three recommendations focused on liquidity risk management practices. The first recommendation would amend liquidity risk management and governance frameworks to protect against spikes in margin and collateral calls in liquidity risk management; the second recommendation would ensure liquidity needs by establishing liquidity risk appetites and a contingency funding plan; and the third recommendation outlined the need for regular reviews of liquidity risk frameworks.

    The next two recommendations were on liquidity stress testing and scenario design. The fourth recommendation set out the need for conducting liquidity stress tests with respect to margin and collateral calls to identify the sources of liquidity strains. The fifth called for stress tests to cover a range of “extreme but plausible” scenarios.

    The last three recommendations focused on collateral management practices. The sixth recommendation called for resilient and effective operational processes and collateral management practices; the seventh set out the need for sufficient cash and readily available diverse liquid assets and collateral arrangements; and the eighth called for active, transparent and regular interactions with counterparties and third-party service providers. The FSB will welcome comments on this report submitted before June 18.

    Bank Regulatory FSB Liquidity Liquidity Standards Of Interest to Non-US Persons

  • Fannie Mae to issue RFP for Title Acceptance pilot

    Federal Issues

    On April 12, the FHFA announced plans to test a pilot program that would permit lenders to forego a lender’s title insurance policy or an attorney opinion letter for some refinance loans sold to Fannie Mae, aiming to lower closing costs for borrowers. Since the announcement, Fannie Mae has been working with the FHFA to develop a Title Acceptance pilot framework and has received interest from title, settlement service, and technology providers to join the pilot. In light of this, Fannie Mae declared its intention to release a Request for Proposal (RFP) by the end of the second quarter to identify and assess potential suppliers to participate in the pilot. 

    Federal Issues Fannie Mae FHFA GSE Risk Management Consumer Finance

  • CFPB supports Connecticut’s bill to ban medical debt on credit reports

    Federal Issues

    On April 15, the CFPB released a letter written by Brian Shearer, the Assistant Director within the Office of Policy Planning and Strategy, throwing the Bureau’s support behind Connecticut’s new bill to bar medical debt on credit reports. The proposed bill, SB 395, has passed its committee in the first chamber. This legislation would align Connecticut with similar legislation in Colorado and New York, and the CFPB noted that the “preemption of state law is narrow under both the [FDCPA] and the [FCRA], and states may… limit the inclusion of information about a person’s allegedly unpaid medical bills on consumer reports.” The CFPB announced in September 2023 its NPRM to prohibit creditors from using medical bills in underwriting decisions (as covered by InfoBytes here). According to the letter, “[m]edical debt is categorically different from most types of consumer tradelines that typically appear on consumer reports. Consumers frequently incur medical bills in unique circumstances that differ from other forms of credit extension, and CFPB research has found that medical debt is less predictive of future consumer credit performance than other tradelines.”

    Federal Issues State Legislation Connecticut CFPB Medical Debt Credit Report

  • CFPB’s Frotman speaks on medical debt collections and rental financial products

    Federal Issues

    On April 11, the General Counsel of the CFPB, Seth Frotman, delivered a speech at the National Consumer Law Center/National Association of Consumer Advocates Spring Training, highlighting how the FDCPA and the FCRA cover often-overlooked sectors of consumer finance, including medical collections and landlord-tenant debts. As to medical billing, collections, and credit reporting, Frotman noted that the CFPB has received more than 15,000 complaints in the past two years, as explained previously in the CFPB’s most recent FDCPA annual report (covered by InfoBytes here). These complaints led to the CFPB initiating a rulemaking process to “remove medical bills from credit reports.” Frotman highlighted that many states have taken similar initiatives: Colorado and New York both enacted laws prohibiting the reporting of medical debt, and the CFPB encouraged more states to follow their lead; Connecticut recently introduced legislation banning medical debt in SB 395. Of interest, Frotman noted that when the CFPB contacted debt collectors about suspected bills, they often closed the account – suggesting that these collectors “do not have confidence that this money [was] actually owed,” indicating that collectors could be seeking to collect an invalid medical debt from consumers.

    On rental collections and credit reporting, Frotman noted an increase in the “financialization” of the landlord and tenant relationship, such as products to finance security deposits or rent and offering rent-specific credit cards. Frotman also noted that corporate landlords, who have increased their share of the rental housing market, have increased the demand for “tenant screening” products that score prospective tenants. Frotman expressed concern that the algorithms relied on by these tenant screening products have been opaque and even discriminatory. The speech highlighted the CFPB’s focus on tenant screening as part of the Bureau’s increased attention toward debt collection and credit reporting companies generally in the rental industry. For instance, the CFPB noted that law firms that operate as “eviction mills” (i.e., firms that “rubber stamp” eviction actions without performing a meaningful review) could be held liable under the FDCPA.

    Federal Issues CFPB Medical Debt FDCPA FCRA

  • FTC orders mental health service company to pay for privacy and data violations

    Federal Issues

    On April 15, the FTC released its administrative complaint and joint stipulated order against a mental health service provider, requiring the provider to pay a total of more than $7 million, including $5.1 million for consumer refunds and $2 million in civil penalties. According to the complaint, the defendant collected sensitive personal health information and sold online mental healthcare treatments (i.e., telehealth) through its website to “hundreds of thousands” of patients between 2021 to 2022. The FTC alleged the mental health service provider had engaged in deceptive and unfair practices relating to the marketing of its data security practices, like failing to disclose material items, failing to obtain consumers’ express informed consent, and failing to implement adequate data security measures. In addition, the FTC alleged that the provider misled consumers about its cancellation of services, including failure to provide a mechanism to stop recurring charges. The FTC’s complaint specifically found that the company misrepresented how it would use and disclose patients’ personal information, mishandled and exposed “hundreds of thousands” of personal information, and failed to provide a means to cancel subscriptions. The FTC charged the defendant with violating Section 5 of the FTC Act covering deceptive privacy practices, deceptive data security practices, unfair privacy and data security practices, and deceptive cancellation practices – allegedly violating the Opioid Act, and violating the Restore Online Shoppers’ Confidence Act (ROSCA).

    In the joint stipulated order, although the defendant neither admitted nor denied these allegations, the judgment prohibited the defendant from disclosing any covered information to any third party for advertising purposes, disclosing any covered information to an outside party without obtaining a consumer’s affirmative express consent, and misrepresenting its cancellation policies. The order also required the defendant to implement stronger protections of the private information of individuals and initiate regular assessments of its data security practices. The court ordered the defendant to pay $5,087,252 as monetary relief to consumers and a civil money penalty of $10 million, which the FTC agreed to suspend in exchange for a payment of $2 million, based on the defendant’s inability to pay the full civil money penalty.

    Federal Issues FTC Privacy, Cyber Risk & Data Security ROSCA

  • Democratic senators pen letter to trade org. that brought suit against CFPB’s credit card late fee rule

    Federal Issues

    On April 14, two Democratic senators, Sen. Elizabeth Warren (D-MA) and Sen. Sheldon Whitehouse (D-RI), wrote a letter to the head of a commercial trade organization that brought a lawsuit against the CFPB, challenging the CFPB’s rule capping credit card late fees. As previously covered by InfoBytes, the trade organization and other business groups sued the CFPB, challenging its recent final rule limiting most credit card late fees to $8. The senators wrote that the trade organization’s decision to sue was “outrageous and unwarranted” as the senators sought an explanation for the opposition.

    The senators stated that the lawsuit was “frivolous,” and argued that the trade organization neglected “Main Street businesses” and instead was “doing the dirty work of its big bank members” who charged these high fees. Bolstering their position that the rule would cover large credit card issuers only, the senators noted that the rule would be expected to apply to less than one percent of the 4,000 financial institutions offering credit cards. Further, the senators argued that this lawsuit was a pattern of the trade organization representing the interests of large corporations, citing a report that found that only 23 of the 28 million small businesses in the U.S. benefited from the trade organization’s litigation. In seeking an explanation, the senators requested answers to a series of questions, including “How did [the trade organization] reach the decision to sue the CFPB to stop the agency from putting this rule in place?” and “Has the [trade organization] conducted an economic analysis of how the CFPB proposal would impact its members?”

    Federal Issues CFPB Credit Cards Junk Fees U.S. Senate


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