The American Association of Bank Directors (AABD) recently published the second edition of its Practical Handbook on Fair Lending for Bank Directors and Executive Officers (the Handbook), updating the first edition of the Handbook issued in 2016. David Baris, President of AABD, and Troutman Pepper partner Lori Sommerfield (two of the original authors) are again co-authors of the Handbook, together with Troutman Pepper partner Chris Willis and associate Sarah Pruett.
As shown by a new report, the Consumer Financial Protection Bureau (CFPB or Bureau) is focusing its fair lending work on mortgage origination and pricing, small business lending, redlining, and the use of artificial intelligence (AI) and machine learning models.
On June 29, the CFPB released its annual Fair Lending Report (Report) to Congress describing its fair lending enforcement and supervisory activities, guidance, and rulemaking for calendar year 2022. The Report satisfies the CFPB’s statutory responsibility to report annually to Congress on public enforcement actions taken pursuant to the Equal Credit Opportunity Act (ECOA).
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.
On June 16, Nevada Governor Joe Lombardo signed into law Senate Bill 276, which significantly amended Nevada Revised Statute 649, otherwise known as the Nevada Collection Agencies Licensing Act (the Act). The Act regulates the activities of “collection agencies,” or any person “engaging, directly or indirectly, and as a primary or a secondary object business or pursuit, in the collection of or in soliciting or obtaining in any manner the payment of a claim owed or due or asserted to be owed or due to another.” Among other things, Senate Bill 276 expanded the exemptions from the collection agency licensing requirement to include entities that are not debt collectors under § 1692a(6)(A) – (F) of the Fair Debt Collection Practices Act (FDCPA). From a practical perspective, these expanded licensure exemptions should result in many first-party servicers no longer needing to obtain a Nevada collections license. Highlights of Senate Bill 276 include:
On June 29, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of data on 2022 mortgage lending transactions reported under the Home Mortgage Disclosure Act (HMDA) by U.S. financial institutions, including banks, savings associations, credit unions, and mortgage companies. The Snapshot National Loan-Level Dataset contains the national HMDA datasets as of May 1, 2023. In March 2023, the FFIEC had made available Loan/Application Registers (LARs) for each HMDA filer of 2022 data, as well as a combined dataset for all filers, modified to protect borrower privacy.
Key observations about the 2022 HMDA data include the following:
To help you keep abreast of relevant activities, below find a breakdown of some of the biggest events at the federal and state levels to impact the Consumer Finance Services industry this past week:
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 30, the Ninth Circuit Court of Appeals held that the plaintiff’s claims that she received five text messages to a cell number that she had placed on the National Do-Not-Call Registry satisfied the demands of Article III even though the actual user of the phone was her thirteen-year-old son.
According to a recent report by WebRecon, the month of May saw a jump significant from the previous month in filings under the Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and the Telephone Consumer Protection Act (TCPA). Complaints filed with the Consumer Financial Protection Bureau (CFPB), however, remained down.
On June 29, the Seventh Circuit Court of Appeals affirmed the Western District of Wisconsin’s decision that an entity created under tribal law was entitled to immunity as an arm of the tribe and dismissed claims characterized as personal capacity claims against individual employees of the tribal entity as being inherently asserted against the tribe itself (ruling available here). This ruling recognizes the important role that sovereign immunity plays in the structuring of economic ventures for tribal communities and demonstrates how a properly enacted tribal code can safeguard immunity protections.