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FHFA releases NPRM on housing goals for 2025-2027
On August 22, FHFA released a proposed rule on its housing goals for Fannie Mae and Freddie Mac (the GSEs) for 2025-2027 as required by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. FHFA is requesting comments on all aspects of the proposed rule. The rule included goals and subgoals for single-family and multifamily mortgages for low-income and very low-income families, set requirements for housing plans, and made technical changes to 12 C.F.R. § 1282. FHFA also proposed new criteria that would assess if a housing plan would be required for certain single-family housing goals during the 2025-2027 housing goals period. FHFA stated that it proposed these changes “to encourage the [GSEs] to focus on meeting the market levels rather than focusing exclusively on the housing goals benchmark levels in the event of unexpected disruptions to the market[.]”
The proposed rule would amend the housing goals to update the benchmark levels for the total number of purchase money mortgages for low-income families to 25 percent, down from 28 percent; and for very low-income families from 7 percent to 6 percent. Revised subgoals include low-income census tract housing remaining at 4 percent, but the minority census tracts housing subgoal increased from 10 percent to 12 percent. The refinancing housing goal remains at 26 percent. The previous goals were for 2022-2024.
The NPRM also included a new section (Section 1282.21) to codify rules on compliance with housing goals and notice of final determination. The new enforcement factors for 2025-2027 were listed under Section 1282.22. The NPRM included multiple tables outlining FHFA’s housing goals. FHFA will accept written comments on the proposed rule on or before 60 days after publication in the Federal Register.
FTC takes action against an online care services platform with an $8.5M fine
On August 26, the FTC released its complaint and stipulated order against an online platform offering child and senior care services, alleging violations of the FTC Act and the Restore Online Shoppers’ Confidence Act. The FTC claimed the company advertised inflated earnings and job opportunities to lure workers onto its platform and into purchasing auto-renewing memberships. The FTC also claimed that the company used dark patterns to frustrate consumers’ attempts to cancel memberships.
The FTC prayed the court to act. The FTC’s stipulated order would provide for a permanent injunction, a monetary judgment, and other relief. The order would prohibit the company from making earnings claims without reliable evidence to substantiate them and misrepresenting the number of available jobs on its platform. It would also mandate that the company provide a simple mechanism for consumers to cancel their auto-renewing memberships. The order also would require the company to pay $8.5 million in monetary relief to the FTC, which will be used for consumer redress. Additionally, under the order, the company must submit compliance reports to the FTC and retain records related to its compliance with the order.
CFPB releases beta platform for small business lending data filing platform
On August 27, the CFPB launched a beta platform for the small business lending data collection rule under Section 1071 of the Dodd-Frank Act. Financial institutions and their technology Participants can upload sample data test files to test the platform, explore its features and provide feedback. The beta platform is for testing purposes only, and data submitted will not count towards compliance with small business lending data reporting requirements. Test files are available in the CFPB’s repository. Finally, the Bureau states that it is imperative that participants avoid using actual customer data.
CFPB issues filing instructions, other resources for nonbank registration
On August 23, the CFPB issued a Filing Instructions Guide and launched the Nonbank Registry webpage to help nonbank entities understand, register and comply with the Nonbank Registration Rule (the Rule). As previously covered by InfoBytes, the Rule, which was issued on June 3 and becomes effective on September 16, will require certain nonbanks (subject to public orders resulting from regulatory actions) to register and file reports with the CFPB.
The Rule includes three separate submission periods.
- For larger participant CFPB-supervised covered nonbanks, the registration submission period is October 16 through January 14, 2025.
- For other CFPB-supervised covered nonbanks, the submission period is January 14, 2025, through April 14, 2025.
- For all other covered nonbanks, the submission period is April 14, 2025, through July 14, 2025.
The CFPB’s Nonbank Registry webpage links to various resources for filers, including the Filing Instructions Guide, an executive summary of the Rule, a sample registration form, and instructions for viewing state regulatory actions in NMLS. The CFPB notes that other resources will be added soon, including Quick Reference User Guides and additional sample forms. The Nonbank Registry Portal will likely go live on October 16 enabling nonbanks to start the registration process.
The Nonbank Registry webpage states that the CFPB plans to publish certain information from the registry online for public and regulatory use, along with summary reports and aggregations. It also provides a nonbank registry technical assistance email address (NBRHelp@cfpb.gov) for submission of requests for technical help with using the Nonbank Registry.
Senator writes to DOJ’s Civil Rights Div. regarding automated evictions
On August 16, the Chair of the Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Housing, Transportation, and Community Development, Senator Tina Smith (D-MN), wrote to the Assistant Attorney General for Civil Rights, Kristen Clarke, about concerns over corporate landlords using automated technology to file serial and sometimes-erroneous evictions. The letter asserted that these practices, which often use AI, may violate federal civil rights law.
Sen. Smith emphasized that “[t]he affordable housing crisis in this country has intensified the eviction crisis” with 7.6 million Americans affected annually, and that eviction “filings disproportionately impact Black renters, women and families with children.” The letter described automated eviction services, such as “one-click-eviction” software, as enabling landlords to file evictions at a much higher rate than smaller landlords can file. She said these automated filings can result in significant court fines and late fees for tenants, further increasing their housing cost burden, and can hinder tenants’ ability to obtain future housing.
The letter also noted that “automated technolog[y] has made errors in eviction filings and has potential for bias.” Smith compared this automated technology to the “robo-signing” practices that contributed to the 2008 financial crisis, warning that a “rush toward automation” might undermine protections against wrongful evictions.
Sen. Smith urged the Civil Rights Division “to apply their holistic approach to enforcement, education, interagency coordination, and policy to prevent unfair and erroneous evictions,” and to “hold[] entities accountable for discriminatory outcomes.”
State AGs submit response to Treasury RFI on using AI in finance
On August 12, a coalition of 15 Republican State Attorneys General sent a letter addressed to the Secretary of the Treasury, Janet Yellen, in response to the the Treasury’s Request for Information (RFI) on the uses, opportunities and risks of AI in the financial services industry.
The State AGs emphasized potential benefits of the implementation of AI by financial services firms including improved customer interactions through AI chatbots, expedited credit risk evaluations, enhanced investment management, and improved fraud detection. The AGs urged the Department to avoid heavy-handed regulation that might stifle innovative uses of AI, noting that enforcement should be limited to deceptive acts or practices or direct harms to competition. The AGs also noted that existing consumer protection laws were already well-positioned to address potential harms arising from these technologies.
The letter also admonished against the politicization of AI regulation, suggesting that any regulation implemented by the Treasury must focus solely on risks to financial reliability and consumer protection. The AGs expressed a concern that, in their view, recent Treasury regulations used financial oversight as a guise to advance non-financial goals, such as environmental regulation, racial equity and other ideological agendas. The AGs asserted that such non-financial purposes were improper justification for Treasury regulations and that any AI regulation should be limited to addressing concerns relating to financial stability.
The letter further advised the Treasury to be mindful of the impact of AI regulations on competition, warning against regulations that could stifle innovation and harm the ability of smaller entities to compete. The AGs also advocated for regulations that complement state laws and that do not preempt existing state enforcement mechanisms, emphasizing the role of State AGs in pursuing recent and successful consumer protection actions.
FTC announces final rule prohibiting fake reviews and testimonials
On August 14, the FTC announced a final rule addressing fake reviews and testimonials, prohibiting businesses from generating misleading reviews of their products or services. The final rule addresses concerns raised by the Commission of unfair or deceptive practices involving consumer reviews and testimonials, which the Commission asserts wastes consumers’ time and drives business from honest competitors.
The rule prohibits several specific practices, including: (i) the creation, sale, or purchase of fake reviews; (ii) reviews written by company insiders without proper disclosure of insider status; (iii) misleading representations that a website or entity controlled by a company provides independent reviews of products or services offered by the same company; and (iv) the use of fake indicators of social media influence, such as inflated views generated by fake social media accounts. The final rule also prohibits business from using threats to suppress negative reviews from consumers, and the final rule bars a business from misrepresenting either negative or all reviews on its website.
The FTC noted that the final rule will be necessary to allow it to obtain consumer redress for violations of the rule, following the Supreme Court’s decision in AMG Capital Management, LLC v. FTC, limiting the commission’s ability to obtain monetary relief (covered by InfoBytes here).
The rule will take effect 60 days after its publication in the Federal Register.
CFPB offers additional guidance for BNPL lenders during compliance transition
On August 16, the CFPB published a blog post on the CFPB’s approach to working collaboratively with the buy now pay later (BNPL) industry to develop an effective regulatory approach to BNPL loans. The blog post stated the CFPB was seeking to provide guidance to BNPL lenders to ensure that rules applied to BNPL lenders protected consumers while encouraging innovative technological or business practices by new market entrants. To this end, the CFPB issued an interpretive rule in May clarifying how federal laws like TILA and Regulation Z apply to BNPL loans (covered by InfoBytes here).
Following issuance of the interpretive rule, including the receipt of comments submitted in response to the interpretive rule, the CFPB reported that the BNPL industry has responded positively with many lenders working to comply with the clarified regulations. To provide additional guidance to lenders who are transitioning their systems to comply with the interpretive rule, the CFPB plans to release a set of FAQs next month, responding to questions received in comments and issued raised during the CFPB’s meetings with BNPL providers. Additionally, the CFPB stated that it will not seek penalties for rule violations during a BNPL’s lender compliance transition if lenders act “in good faith and expeditious manner” through the transition.
GOP pens letter to CFPB on medical debt credit proposal
On August 14, GOP members of the House Financial Services Committee sent a letter to CFPB Director Rohit Chopra voicing concerns about the CFPB’s proposed rule to ban the use of medical information for credit eligibility determinations. As previously covered by InfoBytes, the CFPB’s proposed rule would amend the FCRA to remove the medical financial information exception thus limiting the credit reporting of medical debt. In their letter, the GOP Congress members argued the CFPB’s proposal would weaken the accuracy and completeness of consumer credit reports, increasing risk in the financial system and causing negative effects on the availability of credit.
The letter noted that in the 50 years since the FCRA was enacted, creditors have been allowed to use medical debt information to determine credit eligibility. The letter noted that, in 2003, Congress acknowledged that medical debt information was “beneficial to understanding the full picture” of a consumer’s financial situation when enacting privacy protections for the use of such information. GOP members suggested that the proposed rule may be supported by current political biases, pointing out that the CFPB has had the authority to amend Regulation V, which permits creditors to use medical information for over a decade but only now seeks to prohibit the inclusion of medical debt on credit reports.
In their primary argument opposing the proposed rule, GOP members stated the CFPB did not provide sufficient data to support the claim that there were more inaccuracies in reporting medical debt than other types of debt. They also argued that the existence of some inaccuracies in medical debt reporting should not prevent creditors from knowing the debt burden of potential borrowers, particularly considering available dispute processes under the FCRA. Additionally, the members argued that the CFPB failed to provide evidence that medical debt information was insufficiently predictive to justify exclusion from credit reports.
Finally, the members argued that the proposed rule might have unintended consequences, such as making it more difficult for borrowers, especially low-income borrowers, to obtain credit and to increase the cost medical procedures to compensate providers for increased difficulty in collecting on medical debt.
CFPB releases 2025 filing instructions guide for small business lending data
Recently, the CFPB published updated its filing instructions guide for small business lending data that lenders will begin collecting in 2025. This guide provided instructions for financial institutions on how to collect, prepare and submit small business lending data for the reporting period from July 18, 2025, to December 31, 2025. Key updates from the 2024 guide included changes to reporting period dates, application and action taken dates, and validation requirements. The guide provided a set of resources to help small businesses (i) file the small business lending data; (ii) identify which data to collect and how to include such data in the report; (iii) validate the data; and (iv) comply with the CFPB’s small business lending rule.