A U.S. district court in the Eastern District of New York recently denied a motion for summary judgment filed by a credit card issuer because the plaintiff alleged identity theft and a reasonable factfinder could determine the issuer’s investigation was willfully unreasonable under the Fair Credit Reporting Act (FCRA).
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:
As discussed here, earlier this week the Consumer Financial Protection Bureau (CFPB or Bureau) finalized its credit card late fee rule (Final Rule). The Final Rule sets a safe harbor amount for late fees at $8 and eliminates the annual inflation adjustments to that safe harbor amount, for larger card issuers. The timing of the Final Rule’s announcement, just days before the State of Union address, did not go unnoticed. President Biden highlighted this development in his speech, emphasizing his administration’s commitment to eliminating so-called hidden fees.
On March 1, Senate Bill (SB) 335 was introduced, which, if passed, would impose certain requirements on “commercial financing transactions.” Recently, multiple states have enacted disclosure regulations for commercial financing transactions (see discussions on California, Connecticut, Florida, Georgia, New York, Virginia, and Utah).
On February 15, Massachusetts became the latest state to introduce legislation to regulate earned wage access (EWA) products and services. House Bill (HB) 4456 would create a new chapter to the Massachusetts Code explicitly stating that EWA services offered under the new chapter are not loans or other form of credit or debt, and voluntary tips or gratuities are not interest or finance charges. It further requires EWA providers to be licensed and provide mandatory disclosures to consumers. The bill is pending before the Joint Financial Services Committee.
We discussed the Consumer Financial Protection Bureau’s (CFPB or Bureau) credit card late fee proposed rule here 13 months ago, and today, the Bureau announced that it has finalized the rule (Final Rule) setting a safe harbor amount for late fees at $8 and eliminating the annual inflation adjustments to that safe harbor amount, for larger card issuers. Notably, due to industry pushback during the comment period, the Final Rule does not codify the proposal that late fees must not exceed 25% of the minimum payment. The Final Rule will take effect 60 days after publication in the Federal Register.
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:
According to a recent report by WebRecon, court filings under the Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA), and complaints filed with the Consumer Financial Protection Bureau (CFPB) were up double digits percentages from December 2023. The biggest jump was in TCPA filings, which increased by 78.6%!
Can digital comparison-shopping operators or lead generators violate the Consumer Financial Protection Act (CFPA) by preferencing products or services based on financial benefit? According to today’s guidance issued by the Consumer Financial Protection Bureau (CFPB or Bureau), the answer to that question is yes. Specifically, according to the CFPB, operators of digital comparison-shopping tools can violate the CFPA’s prohibition on abusive acts or practices by steering consumers to certain products or services based on remuneration. Lead generators can also violate the CFPA if they steer consumers to one financial services provider over another based on compensation received. As is typical for the CFPB today, the Bureau has couched this guidance on its “abusive” authority under Dodd-Frank.