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 6, the U.S. District Court for the Northern District of Texas denied the Consumer Financial Protection Bureau’s (CFPB) motions to dismiss the Fort Worth Chamber of Commerce, transfer the case to the District of Columbia, and dissolve the preliminary injunction in the ongoing litigation over the CFPB’s final rule on credit card late fees. The court found that the Fort Worth Chamber had associational standing, meeting the “undemanding” germaneness requirement as established by the Fifth Circuit. The court also emphasized that venue was proper in the Northern District of Texas, as the Fort Worth Chamber resides there and no real property is involved in the action. The CFPB sought to dissolve the preliminary injunction following the U.S. Supreme Court’s decision in CFPB v. Community Financial Services Association of America, Ltd., which reversed the Fifth Circuit’s ruling on the CFPB’s funding structure. However, the court found that the plaintiffs still demonstrated a strong likelihood of success on the merits, stating: “Given the Court’s finding that the Final Rule violates the statutory authority granted to the CFPB under the CARD Act, the Plaintiffs maintain a strong likelihood of success on the merits, and this factor weighs against dissolution of the Court’s preliminary injunction.” For more information, click here.
• On December 5, the Federal Trade Commission (FTC) announced that it is sending nearly $500,000 in payments to consumers harmed by Vivint Smart Homes, Inc.’s alleged misuse of consumer credit reports. The FTC’s complaint, filed in April 2021, alleged that Vivint’s sales representatives used deceptive tactics to obtain financing for unqualified customers by misusing the credit history of unrelated third parties or adding cosigners without their permission. This misconduct led to debt collection actions against innocent consumers, potentially damaging their credit. The first round of payments includes checks to 470 consumers who filed valid claims, with an average payment of $1,056. Additional funds will be distributed at a later date. For more information, click here.
• On December 4, the Board of Governors of the Federal Reserve System (FRB), CFPB, Federal Deposit Insurance Corporation (FDIC), Financial Crimes Enforcement Network (FinCEN), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), and state financial regulators issued a joint statementto provide covered financial institutions with strategies and examples of effective risk management and other practices to identify, prevent, and respond to elder financial exploitation. The agencies noted that a recent study estimates annual losses from elder financial exploitation in the U.S. at $28.3 billion. In addition, the U.S. Department of the Treasury’s 2024 National Money Laundering Risk Assessment described elder financial exploitation as a growing money laundering threat, linked to more than $3 billion in reported financial losses annually. The agencies provide examples of risk management and other practices that supervised institutions could consider adopting. For more information, click here.
• On December 4, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against five individuals and four entities associated with the TGR Group, an international network facilitating sanctions evasion for Russian elites through the use of digital assets. This action, in collaboration with the UK’s National Crime Agency, the UAE government, the Drug Enforcement Administration, and FinCEN, targets the TGR Group’s use of U.S. dollar-backed stablecoins to circumvent sanctions and launder money. For more information, click here.
• On December 3, the CFPB issued a proposed rule for public commentaimed at amending Regulation V, which implements the Fair Credit Reporting Act (FCRA). The proposed rule seeks to redefine (and, in some cases, rewrite) key terms and provisions within the FCRA, particularly focusing on the activities of purported “data brokers.” The rule proposes to make many data brokers subject to FCRA regulations, and declare that communications of personal identifiers collected for preparing consumer reports, often known as “credit header” information, are considered consumer reports. The CFPB also is considering imposing new requirements and restrictions on the permissible purposes available to end users to obtain consumer reports from CRAs. The CFPB will be accepting comments on this latest proposed rule until March 3, 2025. For more information, click here.
• On December 3, the OCC issued version 1.1 of the “Unfair or Deceptive Acts or Practices and Unfair, Deceptive, or Abusive Acts or Practices” booklet of the Comptroller’s Handbook, also known as the UDAAP booklet. The revised booklet offers enhanced guidance on sound risk management practices related to overdraft services. Reflecting the evolving landscape of data privacy laws, the OCC has integrated guidance from the CFPB on data protection and security. The updated booklet also includes a revised version of Appendix B, which now features enhanced unfair or deceptive acts or practices (UDAP) and unfair, deceptive, or abusive acts or practices (UDAAP) risk indicators. For more information, click here.
• On December 3, the CFPB announced a permanent ban on Student Loan Pro and its owner from offering consumer financial products due to their involvement in an allegedly unlawful fee harvesting scheme. The CFPB alleged that Student Loan Pro charged borrowers upfront fees to access free debt-relief programs, violating federal law. The stipulated judgment, pending court approval, mandates the dissolution of Student Loan Pro and FNZA Marketing, LLC, and imposes a civil penalty on their owner. This action follows a 2021 lawsuit where the CFPB claimed the company and its associates collected nearly $3.5 million in advance fees from approximately 3,300 consumers, contravening the Telemarketing Sales Rule and Consumer Financial Protection Act. For more information, click here.
• On December 2, the FDIC issued additional questions and answers (Q&As) regarding the final rule on FDIC Official Signs and Advertising Requirements, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC Name or Logo. The final rule, effective April 1, 2024, with a full compliance date of January 1, 2025, and an extended compliance date for subpart A to May 1, 2025, aims to help consumers identify insured depository institutions and understand FDIC deposit insurance coverage. The updated Q&As cover implementation topics such as digital sign usage and official sign placement in bank branches. For more information, click here.
• On November 29, the CFPB issued a final rule updating its supervision and enforcement procedures to reflect recent organizational changes. The amendments affect five rules under 12 CFR Parts 1070, 1080, 1081, 1082, and 1090, and are primarily ministerial in nature. The Division of Supervision, Enforcement, and Fair Lending has been replaced by two separate divisions: the Supervision Division and the Enforcement Division. Responsibilities related to the disclosure of confidential supervisory information have been transferred to the supervision director. These updates, effective immediately, involve changes in nomenclature and do not impose new or revised recordkeeping, reporting, or disclosure requirements. For more information, click here.
• On November 29, the FDIC released its Community Reinvestment Act (CRA) examination schedules for the first and second quarters of 2025. These schedules list the institutions that will be assessed for their record of meeting the credit needs of their communities, including low- and moderate-income neighborhoods. CRA examinations are scheduled based on an institution’s asset size and CRA rating. Without reasonable cause, an institution with $250 million or less in assets and a CRA rating of satisfactory can be subject to a CRA examination no more frequently than once every 48 months. Likewise, an institution with $250 million or less in assets and a CRA rating of outstanding can be subject to a CRA examination no more frequently than once every 60 months. The FDIC encourages public comments on these institutions’ CRA-related activities. Similarly, on November 26, the OCC announced its CRA evaluation schedule for the same periods. The OCC also invites public comments on the CRA performance of national banks and federal savings associations. For more information, click here and here.
• On November 29, the Federal Housing Finance Agency (FHFA) issued an advisory bulletin outlining its expectations and guidance for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks regarding compliance with the prohibition against UDAPs under Section 5 of the FTC Act. The bulletin emphasizes FHFA’s responsibility to ensure that these regulated entities operate in compliance with applicable laws and in the public interest. It provides detailed guidance on identifying, assessing, monitoring, and mitigating UDAP risks, including those arising from third-party relationships. The bulletin also highlights the importance of effective risk management, board and management oversight, and cooperation with FHFA in preventing UDAP violations. For more information, click here.
• On November 29, the Wolfsberg Group published a set of frequently asked questions (FAQs) to aid financial institutions in assessing the risks associated with digital assets, particularly in the context of money laundering and terrorist financing. The publication addresses the evolving landscape of digital assets, including cryptocurrencies, stablecoins, and central bank digital currencies, and highlights the inconsistencies in regulatory approaches across different jurisdictions. The FAQs provide definitions and guidance on various digital asset categories, aiming to help financial institutions, policymakers, and regulators understand the characteristics and risks of these assets. The Wolfsberg Group emphasizes the need for periodic reviews and updates to these definitions as digital asset technologies continue to evolve, and plans to supplement the FAQs with further guidance on managing the associated risks. For more information, click here.
• On November 27, the OCC announced the fees and assessments structure for calendar year 2025, applicable to all national banks, federal savings associations, and federal branches and agencies of foreign banks. Effective January 1, 2025, the OCC will increase the marginal rates in the general assessment fee schedule for assets above $40 billion by 16%, while other marginal rates will rise by 2.65% to account for inflation. The asset cap for the problem bank surcharge calculation will be raised from $40 billion to $250 billion. Additionally, the hourly fee for special examinations and investigations will increase to $176. The OCC will continue to assess new entrants to the federal banking system on a prorated basis and maintain a surcharge for banks requiring increased supervisory resources. Semiannual assessments are due on March 31 and September 30, based on call report information as of December 31 and June 30, respectively. For further information, click here.
• On November 26, the CFPB released an analysis examining the first seven months of the federal student loan return to repayment following the end of the COVID-19 emergency pause on September 1, 2023. The report, utilizing credit record data, revealed that around 40% of borrowers made payments by April 2024, while 20% had $0 scheduled payments due to increased use of Income-Driven Repayment (IDR) plans. Approximately 30% missed their payments, similar to pre-pause levels. The analysis highlighted that borrowers in low-income areas and those with $0 payments or missed payments faced higher delinquencies on non-student loan debts. The findings suggest that despite the availability of IDR plans, many borrowers continue to experience financial stress, exacerbated by issues such as long servicer call wait times and difficulties in accessing IDR plans. For more information, click here.
• On November 26, the Financial Stability Board (FSB), in consultation with the Basel Committee on Banking Supervision (BCBS) and national authorities, released the 2024 list of global systemically important banks (G-SIBs). The list remains at 29 banks, with one bank moving to a higher bucket and another to a lower bucket, reflecting changes in their underlying activities, particularly in the complexity category. The higher loss absorbency requirements for these G-SIBs will take effect on January 1, 2026. G-SIBs are subject to higher capital buffers, Total Loss-Absorbing Capacity (TLAC) standards, group-wide resolution planning, and higher supervisory expectations. The BCBS also publishes the denominators and thresholds used for scoring and allocating banks to buckets, along with the high-level indicators for the assessment. The next G-SIB list will be published in November 2025. For more information, click here.
• On November 26, the FHFA announced the conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac in 2025. The baseline CLL for one-unit properties will be $806,500, reflecting a 5.2% increase from 2024. This adjustment is based on the Housing and Economic Recovery Act (HERA) mandate to align the CLL with changes in the average U.S. home price, as indicated by the FHFA House Price Index. In high-cost areas, where local median home values exceed 115% of the baseline, the loan limit will be higher, with a new ceiling of $1,209,750 for one-unit properties. Special provisions apply to Alaska, Hawaii, Guam, and the U.S. Virgin Islands, where the baseline limit will also be $1,209,750 for one-unit properties. The updated CLL values will be higher in all but six U.S. counties or county equivalents. For more information, click here.
• On November 25, the Federal Reserve Board of New York published a study examining the causes of bank failures, distinguishing between bank runs and insolvency. Using a 160-year dataset of U.S. banks, the study found that the primary cause of bank failures is a gradual deterioration of bank fundamentals leading to insolvency, rather than bank runs. The analysis showed that most bank failures are preceded by significant asset losses and high predicted probabilities of failure, indicating weak fundamentals. The findings suggest that bank runs are rarely the primary cause of failure, even before the establishment of the FDIC. The study highlights the importance of proactive regulatory measures to address solvency issues and prevent bank failures, emphasizing that interventions should focus on maintaining strong capital buffers and addressing fundamental weaknesses rather than solely providing liquidity support. For more information, click here.
• On November 20, the Department of Veterans Affairs (VA) proposed a rule to amend its regulations regarding loan reporting requirements and the conditions for partial or total loss of guaranty or insurance for lenders participating in the VA-guaranteed home loan program. The proposed amendments aim to modernize and enhance the loan guaranty reporting process by leveraging industry-standard datasets and application programming interfaces (APIs), thereby improving transparency and oversight. The changes would also clarify provisions related to the loss of guaranty or insurance due to fraud, material misrepresentations, or noncompliance with VA requirements. The comment period for this proposed rule ends on January 21, 2025. For more information, click here.

State Activities:

• On November 22, the California Privacy Protection Agency announced the commencement of formal rulemaking on proposed regulations related to updates to the California Consumer Privacy Act (CCPA), cybersecurity audits, risk assessments, automated decision-making technology (ADMT), and insurance companies. These proposed regulations aim to update existing CCPA regulations, require certain businesses to conduct risk assessments and annual cybersecurity audits, implement consumers’ rights to access and opt out of ADMT, and clarify the CCPA compliance requirements for insurance companies. The public comment period for these proposed regulations is open until January 14, 2025. For more information, click here.