To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week:

Federal Activities

State Activities

Federal Activities:

  • On December 22, the Securities and Exchange Commission (SEC) announced that it entered a cease-and-desist order against BarnBridge, a decentralized autonomous organization (DAO). BarnBridge offered a tokenized fixed income product called SMART Yield that enabled its members to pool their digital asset deposits together to use for lending, and in exchange for a fixed or variable return (SMART Yield pools). According to the SEC, each of Barnbridge’s SMART Yield pools constituted unregistered “investment companies” under Section 3(a)(2) of the Investment Company Act. As operator of the SMART Yield pools, the SEC asserted that BarnBridge caused Investment Company Act violations by failing to register the SMART Yield pools as investment companies. For more information, click here.
  • On December 21, Prometheum, the digital asset firm that received a special purpose broker-dealer license from the SEC in May 2023, announced that the Financial Industry Regulatory Authority (FINRA) approved its request to facilitate digital asset securities clearing and settlement services through its special purpose broker-dealer license. For more information, click here.
  • On December 20, the Consumer Financial Protection Bureau (CFPB) and the Justice Department sued Colony Ridge, for allegedly operating an illegal land sales scheme and targeting Hispanic borrowers with false statements and predatory loans. For more information, click here.
  • On December 20, Fannie Mae issued SVC-2023-06. The December Servicing Guide update advises large nondepository sellers/servicers of updates to the frequency of financial reporting requirements and provides other miscellaneous updates. For more information, click here.
  • On December 20, the Federal Reserve Board and the Federal Deposit Insurance Corporation announced the 2024 updated asset-size thresholds used to define “small bank” and “intermediate small bank” under their current Community Reinvestment Act (CRA) regulations. For more information, click here.
  • On December 20, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency released data on small business, small farm, and community development lending during 2022. The CRA regulations require the agencies to annually disclose these data. For more information, click here.
  • On December 20, the Federal Trade Commission (FTC) announced that it was extending the deadline to submit public comments on a new proposed rule to prohibit junk fees. The FTC has estimated that these fees can cost consumers tens of billions of dollars per year in unexpected costs. The public comment period originally was set to expire on January 8, 2024. The new deadline is February 7, 2024. For more information, click here.
  • On December 19, President Biden vetoed bill S. J. Res. 32, which would have repealed the CFPB’s small business data collection rule known as Small Business Lending Under the Equal Credit Opportunity Act (Regulation B). For more information, click here.
  • On December 19, the CFPB issued a new report finding that many consumers are still being hit with unexpected overdraft and nonsufficient fund (NSF) fees, despite recent changes implemented by banks and credit unions that have eliminated billions of dollars in fees charged each year. In a recent CFPB Making Ends Meet survey, more than a quarter of consumers responded that someone in their household was charged an overdraft fee or NSF fee within the past year, and that only 22% of households expected their most recent overdraft. For more information, click here.
  • On December 19, the CFPB issued a report highlighting that many college-sponsored financial products have higher fees and worse terms and conditions compared to typical market products. The CFPB report identifies college-sponsored deposit accounts with fees above prevailing market rates, which institutions are required to consider under Department of Education rules designed to protect students’ interests. For more information, click here.
  • On December 19, the Federal Reserve Board announced the execution of enforcement actions against Marblehead Bancorp and Marblehead Bank. For more information, click here.
  • On December 18, the CFPB adjusted the asset-size exemption thresholds for Regulation C (as part of the Home Mortgage Disclosure Act) and Regulation Z (as part of TILA), based on a 4.1% increase in the average year-over-year CPI-W from November. For Regulation C, the exemption threshold increased from $54 million to $56 million. For more information, click here.
  • On December 18, the CFPB issued a blog on cash-out refinance mortgages and borrowers between 2013 to 2023. For more information, click here.
  • On December 18, the FTC staff detailed key takeaways from an October 2023 public virtual roundtable that examined how generative artificial intelligence, tools that can generate outputs like text, images, and audio on command, is being used and is affecting professionals in music, filmmaking, software development, and other creative fields. For more information, click here.
  • On December 14, the International Organization of Securities Commissions (IOSCO) published its policy recommendations for decentralized finance (DeFi). The recommendation sets forth nine policy objectives to address market integrity and investor protection concerns. According to the IOSCO, its proposed recommendations are “principles-based and outcomes-focused[.]” For more information, click here.

State Activities:

  • On December 22, Paxos, a digital asset services company and issuer of tokenized precious metal product $PAXGOLD, announced that it has received approval from the New York Department of Financial Services to issue its stablecoin, Pax Dollar ($USDP), on the Solana Blockchain. For more information, click here.
  • On December 21, North Carolina Attorney General (AG) Josh Stein, along with 28 other AGs, joined forces to urge the Federal Communications Commission (FCC) to strengthen a rule related to robocalls and telemarketing. The FCC responded to the AG’s request and amended the rule to require businesses to obtain one-to-one consent from a consumer before sending that consumer any robotexts or robocalls. Among other things, the new order will (a) require mobile wireless providers to block texts from a specific number when the FCC notifies the provider of illegal texts from that number; (b) extend the National Do-Not-Call Registry’s protections to text messages; and (c) eliminate the industrywide practice of gaining consent by using a hidden list of marketing partners that are not clearly and conspicuously listed. For more information, click here.
  • Recently, California enacted SB 455, which will require a mortgage servicer transferring a mortgage secured by a property within a proclaimed emergency zone to provide the new servicer with written records between the borrower and the old servicer on the borrower’s election to use insurance proceeds to repair or replace property damaged by a disaster. For more information, click here.
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Photo of Ethan G. Ostroff Ethan G. Ostroff

Ethan Ostroff’s practice focuses on financial services litigation and consumer law compliance counseling. Ethan is part of the firm’s national practice representing consumer-facing companies of all types in defense of individual and class action claims and counseling them on compliance with federal and

Ethan Ostroff’s practice focuses on financial services litigation and consumer law compliance counseling. Ethan is part of the firm’s national practice representing consumer-facing companies of all types in defense of individual and class action claims and counseling them on compliance with federal and state laws.

Photo of Elizabeth Briones Elizabeth Briones

Elizabeth is an associate in the Consumer Financial Services practice who represents businesses large and small – from corporations to local partnerships. She is an experienced litigator with a background in complex matters ranging from corporate contract disputes, premises liability, negligence, fraud, and…

Elizabeth is an associate in the Consumer Financial Services practice who represents businesses large and small – from corporations to local partnerships. She is an experienced litigator with a background in complex matters ranging from corporate contract disputes, premises liability, negligence, fraud, and other business torts. She has appeared in state, federal, and multidistrict litigation.

Photo of Addison Morgan Addison Morgan

Addison is an associate in the firm’s nationally recognized Consumer Financial Services Practice Group. He has represented several of the nation’s preeminent financial institutions in litigation arising under the Fair Credit Reporting Act (FCRA), the Telephone Consumer Protection Act (TCPA), the Fair Debt…

Addison is an associate in the firm’s nationally recognized Consumer Financial Services Practice Group. He has represented several of the nation’s preeminent financial institutions in litigation arising under the Fair Credit Reporting Act (FCRA), the Telephone Consumer Protection Act (TCPA), the Fair Debt Collection Practices Act (FDCPA), the FTC Holder Rule, and other consumer protection state analogs.

Photo of Thailer Buari Thailer Buari

Thailer is an attorney in the firm’s Consumer Financial Service practice, where he represents clients in consumer law, business disputes, and commercial litigation. Thailer manages cases from inception to trial, focusing on all aspects of the litigation process, including case development, settlement negotiations…

Thailer is an attorney in the firm’s Consumer Financial Service practice, where he represents clients in consumer law, business disputes, and commercial litigation. Thailer manages cases from inception to trial, focusing on all aspects of the litigation process, including case development, settlement negotiations, legal research and analysis, document review, motions hearings, and mediations.

Photo of Jed Komisin Jed Komisin

Jed defends clients engaged in civil litigation. He has significant courtroom experience and works with his clients to find comprehensive solutions to their legal issues.

Photo of Trey Smith Trey Smith

Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation. He has experience litigating the Consumer Financial Protection Act, the FTC Act…

Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation. He has experience litigating the Consumer Financial Protection Act, the FTC Act, the Truth in Lending Act, state UDAAP statutes, and other consumer protection laws.

Photo of Alan D. Wingfield Alan D. Wingfield

Alan Wingfield helps consumer-facing clients navigate compliance, litigation and regulatory risks posed by the complex web of state and federal consumer protection laws. He is a trusted advisor and tireless advocate, helping clients develop practical compliance and dispute-resolution strategies.