Skip to main content
Menu Icon

InfoBytes Blog

Financial Services Law Insights and Observations


Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • CFPB releases RFI on mortgage closing costs

    Federal Issues

    On May 30, the CFPB announced a request for information (RFI) regarding mortgage “junk fees” and their impact on borrowers and lenders. The CFPB identified an increase of over 36 percent in median total loan costs for home mortgages from 2021 to 2023 in its analysis, with median mortgage closing costs of $6,000 in 2022. The Bureau argued these fees and costs, many of which are fixed, can reduce home equity and may undercut home ownership.

    The RFI requested public input on whether the fees are subject to competition, how fees are set, who profits from them, and how fee changes, if any, impact consumers and the mortgage market. The CFPB was particularly interested in the factors driving fee increases, such as hard-pull tri-merge credit report costs, and how such fees are affecting housing affordability and access to homeownership. The CFPB also highlighted the potential impact of title insurance and mortgage origination fees.

    The RFI included nine specific questions related to

    (i) whether there are fees that are particularly problematic or burdensome for consumers;

    (ii) whether there are unnecessary fees charged for loan closure;

    (iii) whether and to what extent consumers compare closing costs across lenders;

    (iv) whether and to what extent consumers shop for closing costs across settlement providers;

    (v) the determination of fees, the beneficiaries, and lenders’ influence over third-party costs;

    (vi) which fees have increased, and what are their causes;

    (vii) factors contributing to rising closing, credit report, and credit score costs, the roles of various entities in the credit report chain, competitive pressures on these costs, and their consumer impact;

    (viii) lenders’ ability to negotiate closing costs more effectively than consumers; and

    (ix) the potential impact of closing costs on housing affordability, homeownership access, or home equity.

    Comments in response to the RFI must be received by August 2.

    Federal Issues CFPB Agency Rule-Making & Guidance Mortgages Fees RFI

  • Ginnie Mae outlines recovery planning requirements for issuers with over $50 billion

    Agency Rule-Making & Guidance

    On May 20, Ginnie Mae released “APM 24-08: Mandatory Recovery Planning Requirements for Certain Issuers,” which outlined Ginnie Mae’s introduction of recovery planning requirements for issuers whose portfolios exceed $50 billion. Issuers will be required to submit recovery plans to Ginnie Mae no later than June 30, 2025. The submitted recovery plans must include, among other things, corporate structures (like organizational charts, locations, key personnel, etc.), information systems (detailed inventory mapping of management systems and processes), and recovery planning (which would meet the requirements of the Ginnie Mae Guaranty Agreement and included a plan to unwind its MBS portfolio in a timely and efficient manner). Covered issuers will be required to demonstrate their assessment of the risks that their organizational structure and business activities pose and that they have taken steps to mitigate such risks.  Further, covered issuers must update their plans every two years or confirm their prior plans remain current. More details can be found within the two attachments: the Issuer Recovery Plan Requirements, and Chapter 3 of the Ginnie Mae MBS Guide.

    Agency Rule-Making & Guidance Ginnie Mae MBS

  • Ginnie Mae updates its rules on the securitization of digital collateral

    Agency Rule-Making & Guidance

    On May 20, Ginnie Mae released an All Participant Memorandum (APM) titled “APM 24-07: Commingling Digital Collateral with Paper Collateral in Ginnie Mae Pools,” which included opening Ginnie Mae’s Digital Collateral Program Pilot from July 2020 to allow any issuer to participate in the Digital Collateral Program. In the program, Ginnie will permit the securitization of digital collateral into the same pools as traditional paper collateral. As highlighted in the memorandum, digital collateral was comprised of mortgage loans which have promissory notes that are “Eligible eNotes” as published in Ginnie Mae’s Digital Collateral Program Guide. These updates were implemented to “promote liquidity and increase participation” in the program by modernizing and digitizing Ginnie Mae’s Mortgage-Backed Securities program to align with other industry practices more closely. The updated program will go into effect on June 1.

    Agency Rule-Making & Guidance Securities Mortgage-Backed Securities Pilot Program

  • Chopra remarks on how less credit reporting competition may lead to higher mortgage costs

    Federal Issues

    On May 20, CFPB Director, Rohit Chopra, delivered a speech at a trade association event addressing the rising costs in the mortgage lending industry, which may be due to limited competition in the credit reporting sector. According to Chopra, the mortgage industry was dominated by three major conglomerates, and credit scores were provided by a single corporation. These entities have significantly increased the price for credit reports and credit scores in recent years, with increases reaching as high as 400 percent since 2022. These price hikes can increase a lender’s origination fees or interest rates and have impacted both lenders, especially small lenders, and homebuyers disproportionately.

    Chopra added how lenders require credit reports and credit scores for loan origination and adhere to secondary market requirements, which would necessitate purchasing these reports multiple times, like for joint applications. Director Chopra also noted that price increases were no longer tied to volume discounts and instead were now based on a flat fee pricing model, exacerbating costs for lenders. Additionally, the CFPB questioned the accuracy of credit reports, with the reporting industry profiting from expedited correction services known as a “rapid rescore.”

    Director Chopra emphasized the need for regulatory intervention to address these issues within the mortgage industry. Chopra stated that “limiting chokepoints” was critical. As a result, the CFPB was examining these rising costs and considering regulatory measures to enhance competition and affordability. The Bureau was also promoting “open banking,” which would allow consumers to share their financial data directly with lenders to potentially reduce reliance on traditional credit reports and credit scores.

    Federal Issues Agency Rule-Making & Guidance CFPB Mortgages Consumer Finance Credit Reporting Competition

  • CFPB issues interpretive rule likening BNPL accounts to credit cards under Regulation Z

    Agency Rule-Making & Guidance

    On May 22, the CFPB issued an interpretive rule stating its position that certain consumer protection provisions of Regulation Z applied to Buy Now, Pay Later (BNPL) accounts. The interpretive rule asserted that “digital user accounts” used to access BNPL credit are considered “credit cards” under Regulation Z.

    According to the CFPB, BNPL “digital user accounts” fell within TILA and Regulation Z’s definition of a credit card because they qualified as an “other credit device” or “other single credit device.” The CFPB likened its interpretation of “credit device” to the Fed’s interpretation of “access device” in Regulation E, which included non-physical payment codes to initiate an electronic fund transfer. Further, the CFPB stated that because BNPL “digital user accounts” were usable “from time to time to obtain credit,” they met the definition of a “credit card” under Regulation Z.

    As a result, the CFPB’s interpretive rule stated that entities issuing such accounts were “card issuers” and therefore “creditors” who are “broadly subject” to the regulations in Subpart B of Regulation Z. The interpretive rule noted that although Subpart B was entitled “Open-End Credit,” it nevertheless applied to closed-end BNPL credit issued through a digital user account if such credit was not subject to a finance charge and was not payable by written agreement in more than four installments. Subpart B included provisions applicable to, among other things, disclosures, consumer disputes, billing errors, and refunds.

    The CFPB will request public feedback on the interpretive rule but will reserve the right to move forward without revisions if they are not warranted. The CFPB will submit a report with the interpretive rule to the Senate, the U.S. House, and the U.S. Comptroller General (head of the GAO) prior to the rule’s published effective date.

    Agency Rule-Making & Guidance Federal Issues CFPB Buy Now Pay Later Regulation Z TILA Credit Cards

  • CFPB’s credit card late fee rule stayed


    On May 10, the U.S. District Court for the Northern District of Texas entered an opinion and order granting the plaintiffs, comprising several trade organization, its motion for preliminary injunction and placed a stay on the CFPB’s credit card late fee rule. As previously covered by InfoBytes, a suit was filed against the CFPB by multiple trade organizations to challenge the Bureau’s final rule to amend Regulation Z and limit most credit card late fees to $8.

    The court decided not to address the plaintiffs’ arguments regarding the CARD Act, TILA, and APA violations due to the Court of Appeals for the Fifth Circuit opinion that the CFPB's funding structure was unconstitutional; therefore, any regulations promulgated by the CFPB would be unconstitutional. For that reason, due to the CFPB’s unconstitutional structure found by the 5th Circuit, the District Court decided that all factors weighed in favor of issuing a preliminary injunction and thus staying the final rule. 

    Courts Federal Issues CFPB Litigation Credit Cards Agency Rule-Making & Guidance Fees Consumer Finance

  • CFPB to extend 1071 rule compliance deadlines

    Federal Issues

    On May 17, the CFPB announced it is extending the compliance deadlines for the small business lending rule (Section 1071 of Dodd-Frank, the “1071 rule”), which will require financial institutions to collect and report data on lending to small businesses to the Bureau (covered by InfoBytes here). Following challenges to the 1071 rule in the U.S. District Court in Texas, the rule was stayed pending the Supreme Court’s decision in CFPB v. CFSA (covered by InfoBytes here). Considering the Supreme Court’s recent decision that the Bureau’s funding is constitutional and the district court’s order requiring the CFPB to extend the rule’s compliance deadlines to compensate for the period stayed, the Bureau will issue an interim final rule to extend compliance deadlines as follows:

    • Tier 1 institutions (highest volume lenders): The new compliance date is July 18, 2025, and the first filing deadline is June 1, 2026.
    • Tier 2 institutions (moderate volume lenders): The new compliance date is January 16, 2026, and the first filing deadline is June 1, 2027.
    • Tier 3 institutions (lowest volume lenders): The new compliance date is October 18, 2026, and the first filing deadline is June 1, 2027.

    Federal Issues Agency Rule-Making & Guidance CFPB Small Business Lending Texas

  • CFPB and Fed adjust dollar thresholds for Regulation CC

    Agency Rule-Making & Guidance

    On May 13, the CFPB and the Fed announced inflation-adjusted changes to Regulation CC, which governed the availability of customer funds from bank deposits. The final rule altered the minimum amounts that must be made available for withdrawal by the next business day for certain types of check deposits and modified the funds from certain checks deposited into new accounts that are subject to next-day availability. Mandated by Dodd-Frank, these adjustments were based on the five-year change in the CPI for Urban Wage Earners and Clerical Workers from July 2018 to July 2023. The updated thresholds will go into effect on July 1, 2025.

    Agency Rule-Making & Guidance Federal Issues CFPB Regulation CC Federal Reserve

  • FTC’s Safeguards Rule notification requirement under GLBA now in effect

    Agency Rule-Making & Guidance

    On May 14, the FTC published a business blog post announcing the Safeguards Rule, an amendment to the GLBA, is in effect as of May 13. The Safeguards Rule applies to financial institutions subject to the FTC’s jurisdiction and aims to protect customers' private personal information through data breach reporting requirements.

    Additional revisions to the Rule related to data breach reporting were announced in October 2023, with amendments requiring covered companies to notify the FTC within 30 days of a security breach impacting at least 500 consumers. For reporting, businesses must use a new online form provided by the FTC. The Rule complements existing business security measures and does not negate other state and federal legal obligations. Businesses can refer to FTC guidance for further details on the rule and compliance requirements.


    Agency Rule-Making & Guidance FTC Privacy, Cyber Risk & Data Security

  • House questions CFPB's rules on NSF fees and impact on small businesses

    Federal Issues

    On May 9, the House Committee on Small Business expressed concerns in a letter addressed to CFPB Director, Rohit Chopra, on a proposed rule that would ban charging insufficient fund fees (NSF fees) on declined transactions (covered by InfoBytes here). The Committee argued this proposed rule could unduly complicate existing UDAAP regulations and impose additional burdens on small financial institutions.

    The letter stated the CFPB did not convene a Small Business Advocacy Review (SBAR) panel and questioned the CFPB’s claims that the rule would not significantly affect a substantial number of small businesses. The Committee suggested that the CFPB’s analysis, which minimizes the impact of NSF fees on small institutions’ revenue, might be flawed and that the rule could have a significant economic impact in terms of reporting requirements and compliance, warranting a review by an SBAR panel. The Committee also challenges the CFPB’s assertion that NSF fees for certain transactions are inherently “abusive,” arguing that the CFPB is overstepping its authority by attempting to ban “business practices” altogether rather than limiting abusive practices. Finally, the Committee requests information from the CFPB on several fronts, including the number of small financial institutions affected by the rule, the compliance burden, the CFPB’s methodology for identifying UDAAP, and the CFPB's stance on disclosures compared to other financial regulations and the FTC's approach.


    Federal Issues CFPB NSF Fees Agency Rule-Making & Guidance Fees


Upcoming Events