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The Consumer Financial Protection Bureau (CFPB or Bureau) released its 14th annual report to Congress in fulfillment of its requirements under the Credit Card Accountability Responsibility and Disclosure (CARD) Act. For the report, the CFPB reviewed information available on college websites on the financial products offered directly to students or jointly marketed to students with third-party providers. According to the CFPB, its research showed that college-sponsored financial products have higher fees and less favorable terms and conditions compared to typical market products.

On December 4, a federal district court for the Central District of California granted summary judgment in favor of the Commissioner of the California Department of Financial Protection and Innovation (DFPI) finding that regulations adopted last year under California’s Commercial Financing Disclosures Law (CFDL) do not violate the plaintiff’s First Amendment rights and are not preempted by the Truth in Lending Act (TILA). Under the CFDL, providers are required to give certain disclosures similar to consumer transactions, such as the amount of funding the small business will receive, the APR, a payment amount (if applicable), the term, details related to prepayment policies, and (for products without a monthly payment) an average monthly cost.

Yesterday, the Office of the Comptroller of the Currency (OCC) issued guidance to banks on managing the risks associated with “buy now, pay later” (BNPL) lending. Specifically, the bulletin addresses BNPL loans that are payable in four or fewer installments and carry no finance charges. The stated aim of the OCC’s guidance is to ensure that these loans are offered in a manner that is safe, sound, and compliant with applicable laws and regulations.

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) recently announced a Notice of Proposed Rulemaking (NPRM) that identifies international convertible virtual currency mixing as a class of transactions of primary money laundering concern and seeks to increase transparency around virtual currency mixing to combat its use by illicit actors.

On October 9, a Florida state senator introduced SB 146, which would add a new section to the Florida Consumer Finance Act (CFA), attempting to curb evasion of the CFA. SB 146 would treat all payments incident to the loan as interest, even if voluntary, and would adopt both predominant economic interest and totality of the circumstance tests for true lender purposes. SB 146 follows other states’ attempts to address true lender issues, including legislation passed in Minnesota, discussed here, and Connecticut, discussed here.

Last week, the annual Community Reinvestment Act & Fair Lending Colloquium took place in Austin, Texas. Two officials from the U.S. Department of Justice (DOJ) discussed in detail the “Combatting Redlining Initiative” led by the DOJ using a “whole of government” approach, the current state of redlining investigations, and the future direction of enforcement. In prepared remarks Assistant Attorney General Kristen Clarke stated, “we are proud of the work we have been able to accomplish in these past two years through the Combatting Redlining Initiative. But we are by no means done. We are also focusing on unlawful practices such as reverse redlining, and steering.”

On November 13, the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board (Fed) announced increased dollar thresholds used to determine whether certain consumer credit and lease transactions in 2024 are exempt from Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing).

A California state court recently denied a preliminary injunction sought by the California Department of Financial Protection and Innovation (the DFPI) in its long-running litigation against Opportunity Financial (OppFi) contending that OppFi is the “true lender,” and therefore subject to usury limits, on loans originated by OppFi’s bank partner. The court found that on the factual record before it that the DFPI had not shown a reasonable probability of prevailing on the merits of its claim.

On November 1, New York Governor Kathy Hochul announced that the state’s Department of Financial Services (NY DFS) has amended its Cybersecurity Regulations to “enhance cyber governance, mitigate risks, and protect New York businesses and consumers from cyber threats.” According to the NY DFS, key changes in the regulations include: enhanced governance requirements;  additional controls to prevent unauthorized access to information systems and mitigate the spread of an attack; requirements for more regular risk assessments, as well as a more robust incident response plans; updated notification requirements; and updated direction for companies to invest in at least annual training and cybersecurity awareness programs that are relevant to their business model. The newly amended compliance requirements will take effect in phases. 

As discussed here, on August 1, the two major national credit union trade associations — the National Association of Federal Credit Unions (NAFCU) and the Credit Union National Association (CUNA) — announced plans to merge and create a new organization called America’s Credit Unions. Today, CUNA announced that the organizations’ members voted overwhelmingly (94% of CUNA members and 86% of NAFCU members) in favor of the merger. America’s Credit Unions will be legally formed on January 1, 2024.