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As part of a flurry of last minute regulatory activity by the Biden administration’s Consumer Financial Protection Bureau (CFPB or Bureau), on January 15, the CFPB published an advisory opinion in the Federal Register rescinding a previous advisory opinion which the Bureau issued during the first Trump administration in November 2020. The 2020 advisory opinion had described how a specific type of “earned wage” product did not constitute the offering or extension of “credit” under the Truth in Lending Act (TILA) and Regulation Z. The new advisory opinion is effective immediately.

Last week, the Consumer Financial Protection Bureau (CFPB or Bureau) released its latest Supervisory Highlights report, focusing on the use of advanced technologies in credit scoring models. This edition of Supervisory Highlights concerns select examinations of institutions that use credit scoring models, including models built with advanced technology commonly marketed as AI/ML technology, when making credit decisions. The report repeated the CFPB’s previous statements that there is “no ‘advanced technology’ exception” to federal consumer protection laws (which, to our knowledge, no industry participant has suggested to exist) and asserted that financial institutions will need to improve their practices to ensure compliance with the Equal Credit Opportunity Act (ECOA) and Regulation B. This includes actively searching for less discriminatory alternatives, critically evaluating the use of alternative data, and rigorously testing and validating adverse action reasons.

On January 7, the National Credit Union Administration (NCUA) released its supervisory priorities for 2025, outlining the key areas of focus for federally insured credit unions. This guidance is crucial for credit unions as it highlights the areas posing the highest risk to members, the industry, and the National Credit Union Share Insurance Fund (Share Insurance Fund).

The Court of Appeals for the Fourth District of Florida affirmed a trial court’s holding that claims under the Florida Consumer Collection Practices Act (FCCPA) cannot not be assigned. In KAC 2021-1, LLC v. Mary T. Matuskah Irrevocable Trust, the plaintiff was an assignee of a tenant who leased property from the defendant trust. The tenant failed to make her monthly payments for four months and the defendant posted an “8-Day Notice” on her front door, which stated the amount due and demanded payment of the rent or possession of the property. The tenant alleged the notice faced outward so it could be seen by anyone and was specifically seen by the FedEx driver who dropped off a package, embarrassing her.

On January 15, the Consumer Financial Protection Bureau (CFPB or Bureau) released a blog post highlighting the growing efforts by financial institutions to serve consumers with limited English proficiency (LEP). However, according to the Bureau, despite these advancements, significant barriers remain for LEP individuals in accessing fair and competitive financial services.

This article was republished on insideARM on January 23, 2025, in their newsletter on January 27, 2025, and was mentioned in this insideARM article on February 3, 2025.

As the Consumer Financial Protection Bureau (CFPB or Bureau) anticipates a shift in its leadership with the incoming administration of President Trump, the Bureau has released a report titled “Strengthening State-Level Consumer Protections.” This report appears to be a strategic move by the CFPB to influence state-level consumer protection laws before the anticipated shift in federal regulatory policy, and the Bureau’s recommendations appear to be items that would need to be the subject of legislation, if they are to occur. As detailed below, the changes advocated by the CFPB would strengthen the position of both state regulators and private plaintiffs in actions against industry participants.

On January 10, the Consumer Financial Protection Bureau (Bureau) issued a notice of proposed interpretive rule (Proposed Rule). The deadline for comments is March 31, 2025. The Proposed Rule would apply the Electronic Fund Transfer Act (EFTA)—which protects consumers against errors and fraud—to new types of digital payment mechanisms, including stablecoins and other digital currencies.

On January 13, the Consumer Financial Protection Bureau (CFPB or Bureau) released a report providing its analysis of the growth and impact of Buy Now, Pay Later (BNPL) loans in the United States since 2019. BNPL loans, typically zero-interest loans repaid in four or fewer installments, have not been widely reported to nationwide consumer reporting companies, creating a lack of data, according to the CFPB. (Most consumer reporting agencies do not offer a readily available mechanism to report BNPL loans.) The stated purpose of the CFPB’s study was to bridge that gap by using a matched sample of BNPL applications and originations from six major BNPL firms along with corresponding de-identified credit records.