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Caleb Rosenberg

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Caleb is counsel in the firm’s Consumer Financial Services Practice Group. He focuses his practice on helping federal and state-chartered banks, fintech companies, finance companies, and licensed lenders navigate regulatory risks posed by state and federal laws aimed at protecting consumers and small businesses in the credit and alternative finance products industry.

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As discussed here, on April 26, the Texas Bankers Association, the American Bankers Association (ABA), and Rio Bank, McAllen, Texas (Rio Bank) filed a complaint in the U.S. District Court for the Southern District of Texas challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) final rule under § 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Final Rule). As discussed here, § 1071 amended the Equal Credit Opportunity Act (ECOA) to impose significant data collection and reporting requirements on small business creditors. The plaintiffs’ complaint relied heavily on the Fifth Circuit’s decision in Community Financial Services Association (CFSA) v CFPB, finding the CFPB’s funding structure unconstitutional and, therefore, rules promulgated by the Bureau invalid. The CFPB’s appeal of the Fifth Circuit’s decision is currently pending before the U.S. Supreme Court (discussed here).

On June 6, Nebraska Governor Jim Pillen signed into law Legislative Bill 92, which, among many other subjects, amends the Nebraska Installment Loan Act (the NILA). Previously, a license was required for a lender seeking to take advantage of the usury authority provided by the NILA and also for any person that holds or acquires any rights of ownership, servicing, or other forms of participation in a loan under the NILA. Legislative Bill 92 expands the scope of the licensing requirement to “any person that is not a financial institution who, at or after the time a [covered] loan is made by a financial institution, markets, owns in whole or in part, holds, acquires, services, or otherwise participates in such loan.” “Financial institution” is broadly defined to include all federally insured depository institutions. And the licensing requirement, by its terms, applies to entities providing limited services and/or purchasing limited interests (not just the predominant economic interest) in loans by financial institutions of $25,000 or less, with rates exceeding the Nebraska general usury limit.

As recently discussed on our podcast here, section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended the Equal Credit Opportunity Act (ECOA) to require lenders to collect information about small business credit applications they receive, including geographic and demographic data concerning the principal owners, lending decisions, and the price of credit. The Consumer Financial Protection Bureau (CFPB or Bureau) issued its proposed rule in 2021, and after considering the over 2,500 comments it received, on March 30, 2023, the CFPB issued the massive, highly technical, and complicated Final Rule. The Final Rule and its accompanying discussion and analysis, as well as the Official Commentary totals 888 pages exclusive of the 123-page Filing Instruction Guide and numerous other documents released by the Bureau. In this fourth in a multi-post blog series (first post available here, second here, third here), we will take a closer look at the anti-discouragement provisions in the Final Rule.

On June 29, Connecticut Governor Ned Lamont signed SB 1033, An Act Concerning Various Revisions to the Banking Statutes, into law. As discussed here, with this bill, Connecticut joins several other states that have set strict rate caps on consumer loans, including Illinois, New Mexico, Colorado, and California, and those that expressly provide for a predominant economic interest test for true lender purposes. The law will take effect on October 1, 2023.

On July 7, Missouri Governor Mike Parson signed SB 103 into law, which prohibits any person from offering earned wage access (EWA) services without registering with the Division of Finance and paying an annual $1,000 fee. The law also requires EWA providers to develop procedures for dealing with consumer questions and complaints, specifies notices required to be given to consumers, and regulates the types of fees that may be charged and the manner in which repayments may be pursued. The law further specifies requirements should the EWA provider solicit, charge, or receive tips or gratuities from consumers. Like Nevada, discussed here, the law specifies that EWA products are not loans or money transmissions under Missouri law. In March 2023, the California Department of Financial Protection and Innovation took the opposite position with respect to EWA products and proposed new regulations under the California Financing Law that would update the definition of loan to include EWA products, except for those offered by employers.

On June 14, Nevada Governor Joe Lombardo signed into law AB 332, An Act Relating to Student Education Loans, requiring, among other things, student loan servicers to be licensed by the Commissioner of Financial Institutions and regulating certain conduct of the servicers towards borrowers. The law will take effect on January 1, 2024.

On June 28, Connecticut Governor Ned Lamont signed into law Senate Bill 1032 entitled An Act Requiring Certain Financing Disclosures, which requires certain providers of commercial financing to make various disclosures and requires providers and brokers to register. Connecticut now joins states like Utah, California, Georgia, New York, Florida, and Virginia (discussed here, here, here, here, here, and here) in requiring such disclosures.

As recently discussed on our podcast here, section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended the Equal Credit Opportunity Act (ECOA) to require lenders to collect information about small business credit applications they receive, including geographic and demographic data concerning the principal owners, lending decisions, and the price of credit. In September 2021, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a proposed rule with more than 900 pages of supplementary material. The Bureau also issued a summary of the proposed rule and a chart of the data points that the rule would require creditors to collect, and it accepted approximately 2,100 comments on the proposal in January 2022. The Bureau then issued the Final Rule on March 30, 2023, with a host of supplementary materials. In this third in a multi-post blog series (first post available here, second here), we will take a closer look at what changed between the proposed rule and the Final Rule.

On June 15, Nevada Governor Joe Lombardo signed SB 290 into law, which imposes licensing, reporting, examination, and other substantive requirements on providers of earned wage access (EWA) products. Specifically, the legislation applies to businesses that deliver money to a person that represents income that the person has earned but has not yet been paid.

On June 26, Florida Governor Ron DeSantis signed the Florida Commercial Financing Disclosure Law (FCFDL). As discussed here, the FCFDL mandates that covered commercial financing companies provide consumer-like disclosures for certain commercial financing transactions. The law also defines and prohibits specific acts by brokers of those transactions, including the collection of advance fees.

The…