On February 6, a bill was introduced to the Illinois House of Representatives seeking to amend the Illinois Dental Practices Act to add provisions related to third-party financing for dental services.
2023 Payments Year in Review: CFPB and FTC Regulatory Trends
In the first installment of a two-part Payments Year in Review series, Keith Barnett, Carlin McCrory, and Josh McBeain delve into the payments landscape of 2023 and share their predictions for 2024.
Bank and Loan Servicer Move to Dismiss Purported Class Action Asserting Violations of Georgia Usury Law and RICO
Recently, Lead Bank and its loan servicer Hyphen, LLC, an online lending platform operating Helix Financial, filed a motion to dismiss a purported class action alleging violations of the Georgia Installment Loan Act (GILA) and Georgia racketeering law arising out of a consumer installment or “payday loan.” Specifically, the plaintiff alleged that the loan agreement between herself and Lead Bank was “nothing more than a façade, and a temporary one at that” in an attempt to evade Georgia’s restrictions on payday lending.
Troutman Pepper Publishes 2023 Consumer Financial Services Year in Review and A Look Ahead
We are pleased to share our annual review of regulatory and legal developments in the consumer financial services industry. With active federal and state legislatures, consumer financial services providers faced a challenging 2023. Courts across the country issued rulings that will have immediate and lasting impacts on the industry. Our team of more than 140 professionals has prepared this concise, yet thorough analysis of the most important issues and trends throughout our industry. We not only examined what happened in 2023, but also what to expect — and how to prepare — for the months ahead.
CFPB Continues War on Fees, Even Rare Ones
Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a proposed rule with request for public comment to prohibit covered financial institutions from charging nonsufficient funds fees (NSF) for payment transactions that are instantaneously declined. The proposed rule would treat fees for transactions declined in real time to be unlawful under the Consumer Financial Protection Act.
Navigating the Future of Payments
As the financial landscape continues to evolve, financial institutions and fintech businesses, including payment processors and money transmitters, are facing increased regulatory scrutiny and heightened consumer expectations. Our dedicated Payments team is at the forefront of these changes, actively addressing the full spectrum of legal challenges in this intricate and ever-evolving sector.
New Year Same Focus on Fees: CFPB Proposes to Amend Regulation Z to Raise New Barriers to Overdraft Charges
On January 17, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a proposed rule with request for public comment to amend exemptions to Regulation Z so the Truth in Lending Act (TILA)/Regulation Z would apply to certain overdraft “credit” provided by insured financial institutions with more than $10 billion in assets, in furtherance of the Bureau’s crusade on “junk fees.” At a highlevel, the CFPB’s proposed rule would provide covered financial institutions with two options for offering overdraft “credit”: (1) a “courtesy” overdraft service with “breakeven” fees exempt from TILA/Regulation Z; or (2) a “covered overdraft credit” line/loan in connection with debit card or routing/account number transactions with “above breakeven” fees subject to TILA/Reg. Z. Under the proposal, an institution subject to the rule would have to provide full TILA disclosures and comply with other substantive TILA requirements for overdraft fees if they exceed costs or a low CFPB safe harbor amount.
Unraveling the Legal Threads: A Deep Dive Into Earned Wage Access
In the latest episode of Payments Pros, hosts Keith Barnett, Josh McBeain, and Carlin McCrory discuss Earned Wage Access (EWA), a system that allows employees to receive their earned wages before the employer’s payroll cycle.
CFPB Calls for Increased Specificity and Accuracy on Reasons for Credit Denials When Lenders Employ Artificial Intelligence
When using artificial intelligence (AI) or complex credit models, can lenders rely on the checklist of reasons provided in Regulation B sample forms for adverse action notices? According to today’s guidance issued by the Consumer Financial Protection Bureau (CFPB or Bureau), the answer to that question is, in many circumstances, no.
Kentucky Federal Court Grants Preliminary Injunction Enjoining CFPB’s Enforcement of its Section 1071 Rule Until After U.S. Supreme Court Decision
On September 14, a federal district court in the Eastern District of Kentucky became the second court to issue an order granting, in part, a plaintiffs’ motion for a preliminary injunction enjoining the Consumer Financial Protection Bureau’s (CFPB or Bureau) from enforcing its final rule under § 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Final Rule) against the plaintiffs and their members. (A discussion of the first injunction issued by a Texas federal court can be found here.) The injunction in The Monticello Banking Company v. CFPB will dissolve if the U.S. Supreme Court reverses the Fifth Circuit in the Community Financial Services Association (CFSA) v CFPB case, which found the CFPB’s funding structure unconstitutional and, therefore, rules promulgated by the Bureau invalid.