In this episode of Payments Pros, Josh McBeain and Chris Willis discuss the Consumer Financial Protection Bureau’s (CFPB) proposed rule on overdraft fees. The rule, which only applies to large financial institutions with assets over $10 billion, aims to regulate overdraft services by altering the definition of ‘finance charge,’ effectively subjecting these institutions to Regulation Z’s disclosure and substantive provisions. Chris and Josh delve into the complexities of the proposed rule, considering its potential implications and the likelihood of litigation challenges from the industry. They also discuss the role of the Truth in Lending Act (TILA) and the concept of Chevron deference in this context.

Kansas Governor Laura Kelly signed House Bill (HB) 2247 into law, bringing significant changes to the Kansas Mortgage Business Act and the Uniform Consumer Credit Code (UCCC). The changes brought about by HB 2247 will largely become effective on January 1, 2025. However, those changes standardizing threshold amounts consistent with federal law will become effective on July 1, 2024.

Troutman Pepper attorneys Brooke Conkle and Chris Capurso discuss the Federal Trade Commission’s “Holder Rule” in the third of five special episodes devoted to auto finance issues. Although the Holder Rule has been around since the 1970s and is a staple of consumer finance contracts, there have been several recent, important developments. Brooke and Chris hop behind the wheel of this installment to review these developments, the position taken by the FTC and courts, and the potential impacts to dealers and finance companies.

Last week, the Consumer Financial Protection Bureau (CFPB or Bureau) filed a complaint against SoLo Funds, Inc., a fintech company operating a small-dollar, short-term lending platform. The CFPB alleges that SoLo Funds engaged in deceptive practices related to the total cost of loans, servicing, and collection of void and uncollectible loans in violation of the Consumer Financial Protection Act (CFPA) and engaged in providing consumer reports governed by the Fair Credit Reporting Act (FCRA) but failed to ensure the maximum possible accuracy of those consumer reports.

As discussed here, yesterday the U.S. Supreme Court issued its long-awaited decision in Community Financial Services Association of America, Limited (CFSA) v. Consumer Financial Protection Bureau (CFPB or Bureau) holding that the CFPB’s special funding structure does not violate the appropriations clause of the Constitution. Wasting no time, today the CFPB filed notices of the CFSA decision in cases nationwide, including in the case where several trade associations are challenging the CFPB’s final rule under § 1071 of the Dodd-Frank Act (Final Rule), Texas Bankers Association, et al. v. CFPB.

Yesterday, the U.S. Supreme Court issued its long-awaited decision in Community Financial Services Association of America, Limited (CFSA) v. Consumer Financial Protection Bureau (CFPB or Bureau) holding that the CFPB’s special funding structure does not violate the appropriations clause of the Constitution. The 7-2 majority held the Dodd-Frank Act, which provides the CFPB’s funding structure, satisfies the appropriations clause because it “authorizes the Bureau to draw public funds from a particular source — ‘the combined earnings of the Federal Reserve System’ — in an amount not exceeding an inflation-adjusted cap. And it specifies the objects for which the Bureau can use those funds — to ‘pay the expenses of the Bureau in carrying out its duties and responsibilities.’” The Supreme Court further found that the “Bureau’s funding mechanism [] fits comfortably within the historical appropriations practice …” Justices Samuel Alito and Neil Gorsuch dissented from the decision.

The Court of Appeals of Indiana recently upheld a lower court’s decision that a debt buyer who purchased a portfolio of defaulted student loans and placed an account with a collection agency qualifies as a “debt collector” under both Indiana state law and the Fair Debt Collection Practices Act (FDCPA).

Today, the U.S. Supreme Court issued a unanimous decision in Smith v. Spizzirri holding that § 3 of the Federal Arbitration Act (FAA) requires district courts to issue an order staying a federal case pending the outcome of arbitration, rather than dismiss the case when a motion to compel arbitration is granted. This decision resolves a circuit split where previously the Second, Third, Sixth, Seventh, Tenth, and Eleventh Circuits had held that the plain text of § 3 mandates a stay of the proceedings whereas the First, Fifth, Eighth, and Ninth Circuits had held that district courts have the discretion to dismiss the proceedings if the entire dispute was subject to arbitration.