To help you keep abreast of relevant activities, below find a breakdown of some of the biggest events at the federal and state levels to impact the Consumer Finance Services industry this past week:
- On November 23, the Federal Reserve Board and the Federal Deposit Insurance Corporation announced the results of their joint review of the resolution plans — also known as “living wills” — submitted by the eight largest and most complex domestic banking organizations in 2021. Resolution plans must describe a financial company’s strategy for rapid and orderly resolution in bankruptcy in the event of its material financial distress or failure. The agencies have provided feedback letters to each of the firms, which note continued development of the firms’ resolution strategies and capabilities and the expectation that work will continue. The feedback letters also note the expectation that the next plan review will include expanded testing of the firm’s resolution capabilities. For more information, click here.
- On November 22, the U.S. Department of Education announced an extension of the pause on student loan repayment, interest, and collections. The extension will alleviate uncertainty for borrowers as the Supreme Court reviews lower court orders, preventing the department from providing debt relief for tens of millions of Americans. Payments will resume 60 days after the department is permitted to implement the program or the litigation is resolved, which will give the Supreme Court an opportunity to resolve the case during its current term. If the program is not implemented and the litigation is not resolved by June 30, 2023, payments will resume 60 days thereafter. For more information, click here.
- On November 22, the Federal Trade Commission (FTC) joined the Consumer Financial Protection Bureau (CFPB) in filing an amicus brief with the U.S. Court of Appeals for the Eleventh Circuit in Louis v. Bluegreen Vacations Unlimited, Inc. The brief asks the appeals court to overturn a lower court decision that denied servicemembers the right to sue to invalidate a contract that they allege violates the Military Lending Act. The brief argues that the district court’s erroneous ruling could undermine Military Lending Act enforcement. For more information, click here.
- On November 21, the Federal Communications Commission (FCC) issued a declaratory ruling and order, finding that companies must obtain consent before sending a “ringless voicemail” to a consumer’s phone since it constitutes a “call” made using an artificial or prerecorded voice and is subject to Telephone Consumer Protection Act provisions. “Ringless voicemails” are messages sent directly to voicemail inboxes without first triggering a call ringtone. The FCC found the calls should be regulated under the artificial or prerecorded voice prong of the statute, mooting any inquiry as to whether the “ringless voicemails” are sent with an automatic telephone dialing system. For more information, click here.
- On November 21, the FTC released the National Do Not Call Registry Data Book for Fiscal Year 2022, which allows consumers to add their phone number to opt out of receiving most legal telemarketing calls. In the last fiscal year, over 2.5 million people signed up with the DNC Registry, bringing the total to more than 246 million phone numbers. For more information, click here.
- On November 18, the Consumer Financial Protection Bureau (CFPB) published a blog post, outlining its recent initiative to share consumer complaint data with cities and counties, so they can “increase their efforts to protect consumers at the local levels.” According to the CFPB, collecting and responding to consumer complaints constitutes one of the major ways it regulates consumer financial products and protects consumers from unfair practices. The complaints it receives informs the CFPB’s regulatory priorities and enforcement activities. The CFPB recently launched an initiative to increase the impact of its complaint data by sharing it with local governments. The CFPB claims this will help protect as many consumers as possible from predatory lending, barriers to credit, and other consumer harms. For more information, click here.
- On November 22, the California Department of Financial Protection and Innovation (DFPI) entered an order officially suspending SALT Lending LLC’s California financing law license for 30 days. Earlier this month, DFPI issued its notice of intent to suspend SALT’s license on the heels of the company’s announcement that its business operations were impacted by the collapse of cryptocurrency exchange FTX Trading Ltd. Having received no hearing request from SALT, DFPI made the suspension official. For more information, click here.
- On November 22, New York Attorney General Letitia James objected to legislation that would permit investing retirement funds in digital assets, such as cryptocurrencies, urging members of Congress to instead adopt measures that would protect Americans’ savings. In her 10-page letter to congressional leaders, James criticized digital assets, citing volatility concerns as evidenced by recent crypto market crashes and other disruptions. Specifically, James referenced the crash of TerraUSD in May 2022 and the recent collapse of FTX Trading Ltd. to underscore her concern that “[i]nvesting Americans’ hard-earned retirement funds in crashing cryptocurrencies could wipe away a lifetime’s worth of hard work.” Moreover, James also argued that digital assets create “breeding ground for fraud, crime, and theft,” citing an FTC report that more than 46,000 people reported losing more than $1 billion to scams. For more information, click here.
- On November 21, the Federal Reserve Bank of New York’s Center for Microeconomic Data released updated results from its Survey of Consumer Expectations Credit Access Survey. The Credit Access Survey, which provides information pertaining to consumers’ expectations about credit demand and access, is released annually in November. The most recent Credit Access Survey shows an overall decline in consumer credit demand in 2022, with a rise in credit card applications. According to the Credit Access Survey, households project that over the next year, they are less likely to apply for auto loans, mortgages, or mortgage refinance loans and more likely to apply for credit cards or a credit card limit increases. For more information, click here.
- On November 21, California Attorney General Rob Bonta urged the FTC to follow the state’s lead and enhance consumer privacy protection against commercial surveillance and harmful data security practices. Using California’s Consumer Privacy Act as a point of reference, Bonta highlighted several critical areas for regulatory action. Bonta set forth several recommendations for how the FTC could improve privacy protections for consumers, which include (1) outlining clear standards for protecting sensitive personal information (e.g., geolocation and biometric information); (2) allowing consumers the right to opt out of the sale of their personal data; (3) preventing companies from tracking and selling data from users who have enabled privacy controls; (4) requiring more stringent verification process for online services and products likely to be utilized by children; (5) requiring businesses that collect or maintain health information to have reasonable security; and (6) protecting vulnerable patients from health care and insurance industry practices that tend to perpetuate unfair discrimination. For more information, click here.