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:

Federal Activities

State Activities

Federal Activities:

  • On May 30, the United States, in coordination with the G7 and other international partners, announced that it is strengthening the unprecedented global sanctions and other restrictive economic measures to further degrade the Russian Federation’s capacity to wage war against Ukraine. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is implementing new commitments made at the G7 Leaders’ Summit to hold Russia accountable for its war. For more information, click here.
  • On May 26, the European Central Bank published two reports on its market research and prototyping exercise, which were both conducted as part of the investigation phase of the digital euro project. For more information, click here.
  • On May 23, the Consumer Financial Protection Bureau (CFPB) announced it had reached a settlement to resolve allegations that a large bank violated consumer financial protection laws and rules protecting individuals when they dispute credit card transactions. The CFPB alleges that the bank failed to properly manage and respond to customers’ credit card disputes and fraud claims. For more information, click here.
  • On May 23, the CFPB published a report examining data, suggesting that overdraft/NSF revenues are down nearly 50% versus pre-pandemic levels. For more information, click here.
  • On May 23, OFAC and South Korea’s Ministry of Foreign Affairs (MOFA) imposed sanctions against North Korea’s 110th Research Center and its parent agency, the Technical Reconnaissance Bureau, for supporting the activities of units that steal cryptocurrencies through hacking. OFAC and MOFA also sanctioned Chinyong Information Technology Cooperation Company, and its employee, Sang Man Kim, for their role in helping North Korean IT professionals find contract work overseas. These groups obtain proceeds through illicit activities and return the funds to North Korea to support its weapons development programs. For more information, click here.
  • On May 23, the International Organization of Securities Commissions (IOSCO), the global standard setter for securities markets, released draft policy recommendations for the cryptocurrency and digital asset markets. In a major initiative designed to improve global standards of regulation of crypto-assets, IOSCO has set out recommendations regarding how clients should be protected and how crypto trading should meet the standards that apply in public markets. For more information, click here.
  • On May 22, the Federal Trade Commission (FTC) announced it would send payments totaling more than $557,000 to consumers who paid money to a Florida-based telemarketing company that allegedly promised credit card interest rate reductions. The FTC and the State of Florida sued the telemarketing company and its owners in July 2020, alleging that they charged consumers as much as $3,995 for their debt relief services, making claims that they were affiliated with major credit card companies and could save consumers thousands of dollars by securing reduced interest rates. The FTC alleges that most consumers did not see the advertised benefit from the company’s services, and were left with more debt and no measurable improvement to their credit scores. The company’s operators agreed to settlements that the court entered in November 2021 permanently banning them from the debt relief industry and requiring them to surrender assets. For more information, click here.
  • On May 22, Freddie Mac announced enhancements to its ground-breaking automated income assessment tool that allows lenders to assess a homebuyer’s income paid through direct deposit, to also include the borrower’s digital paystub data. This detailed information can help lenders calculate income faster and more precisely to improve loan quality, simplify the mortgage process and, most importantly, expand access to credit. For more information, click here.
  • On May 19, the Financial Crimes Enforcement Network (FinCEN) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a supplemental joint alert urging continued vigilance on the part of U.S. financial institutions for potential attempts by Russia to evade U.S. export controls. For more information, click here.
  • On May 18, the FTC announced that it is seeking comment on proposed changes to the Health Breach Notification Rule (HBNR) that include clarifying the rule’s applicability to health apps and other similar technologies. For more information, click here.
  • On May 18, the Office of the Comptroller of the Currency released new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. For more information, click here.
  • On May 17, the Department of Justice filed a complaint on behalf of the FTC against a health app for violating the Health Breach Notification Rule (HBNR) by allegedly sharing users’ sensitive personal information with third parties, disclosing sensitive health data, and failing to notify users of these unauthorized disclosures. For more information, click here.
  • On May 17, CFPB Director Rohit Chopra announced that the agency is currently reviewing several of its rules and guidance documents in an effort to eliminate unnecessary complexities and create more durable rules that don’t over-rely on single entities. For more information, click here.
  • On May 17, the Federal Housing Administration (FHA) announced new policies that will allow for faster payment of funds to mortgagees when they assign a Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, to U.S. Department of Housing and Urban Development (HUD). The changes permit people with FHA mortgages to submit a request for Preliminary Title Approval earlier in the process and with fewer documents. Combined, these changes will reduce the time between a loan’s eligibility for assignment to HUD and the payment of claim funds to the mortgagee. For more information, click here.
  • On May 16, the U.S. and the European Union announced that they are working more closely on sanctions as a key tool to addressing shared foreign policy goals. From April 26–28, the OFAC, the European External Action Service (EEAS), and the European Commission Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) concluded a multiday technical meeting in Brussels. For more information, click here.
  • On May 15, the Federal Housing Finance Agency (FHFA) issued a Request for Input (RFI) on Fannie Mae and Freddie Mac’s single-family pricing framework. The RFI solicits public feedback on the goals and policy priorities that FHFA should pursue in its oversight of the pricing framework. For more information, click here.

State Activities:

  • On May 29, Texas Governor Greg Abbott signed a bill into law that will require hospitals and health care facilities to send patients a written, understandable itemized invoice prior to placing the account with a debt collector. The law is scheduled to go into effect on September 1. For more information, click here.
  • On May 18, New York Attorney General Letitia James announced a settlement with a Brooklyn-based cryptocurrency company to resolve claims that it defrauded investors. James alleged that the company charged investors “exorbitant and undisclosed fees” to store cryptocurrency in an account, despite being advertised as a free service on the company’s website. The fees charged were allegedly so high that they emptied investors’ accounts. James also alleged that the company failed to register as a commodity broker dealer for a period of time and failed to file a registration statement. The company is required to pay $508,910 in restitution to the state and provide full restitution to investors. The company will also provide monthly status updates to James, and will limit the fees charged for using its wallet services for at least five years. For more information, click here.
  • On May 19, Arizona Governor Katie Hobbs signed HB2010 into law. The bill revises sections of the state’s statutes relating to the Department of Insurance and Financial Institutions. Under the new law, a licensee can avoid a license renewal investigation by paying the prescribed fees. The bill also changes several statutory provisions related to, among other things, accounting practices and retention of records for mortgage brokers, mortgage bankers, and commercial mortgage bankers. For more information, click here.
  • On May 11, Governor Kim Reynolds signed HF675, revising various provisions of the state’s Uniform Money Transmission Modernization Act. Set to take effect July 1, the revised act eases regulatory restrictions and makes the act more congruent with similar laws enacted in other states. The act revises the definition of several terms, including the term “money transmission,” which now expressly excludes the provision solely of online or telecommunications services or network access. Additionally, the act carves exemptions from licensing for various entities and organizations, including, for example, a delayed deposit services business, as that term is defined elsewhere within the act. For more information, click here.
  • On May 8, the California Department of Financial Protection and Innovation (DFPI) released an opinion addressing whether a company’s handling of certain payments was exempt from the licensure requirement of the state’s Money Transmission Act (MTA). In response to the company’s inquiry, DFPI granted the company an exemption for the payments it receives from another company’s collection attorneys, which the inquiring company then remits to the company to which the payments are due. With respect to tax payments services offered by the inquiring company, DFPI agreed with the inquiring company that the agent of payee exemption set forth in the MTA applied to such transactions because of certain language appointing the company as the contractor’s limited agent for the sole purpose of collecting the payments. Last, DFPI further agreed that the agent of payee exemption applied to the inquiring company’s processing of payments for fees and tax payments to government entities, again based on contractual language, creating a limited agency relationship between the inquiring company and the governmental entities to which the payments are owed. For more information, click here.
  • Earlier this month, Solo Funds Inc. entered separate consent orders with California, Connecticut, and the District of Columbia to resolve allegations claiming that it disguised interest charges as tips and donations connected to loans offered through its platform. For more information, click here.