Mortgage Lending, Servicing + Banking

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On April 17, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Federal Reserve), and Federal Deposit Insurance Corporation (FDIC) (collectively, the federal agencies) issued revised interagency guidance on model risk management. The guidance updates and consolidates supervisory expectations for how banks manage the growing use of models across their businesses and effectively manage those risks, while rescinding prior guidance issued by each agency. The updated guidance is principles-based and risk-based, rather than prescriptive, and the federal banking agencies emphasize that model risk management should be tailored to a bank’s model risk profile, as well as the size and complexity of its operations. The agencies further state that non-compliance with the guidance itself will not, standing alone, result in supervisory criticism. That said, weak model risk management can still lead to findings of unsafe or unsound practices or violations of law.

Delaware is positioning itself at the center of digital asset and stablecoin innovation with a coordinated package of legislation aimed at modernizing its banking code and creating a comprehensive framework for payment stablecoins. Senate Bill 16, the “Delaware Banking Modernization Act of 2026,” (SB 16) and Senate Bill 19, the “Delaware Payment Stablecoin Act,” (SB 19) were introduced on March 23, 2026, and are currently moving through the General Assembly. If enacted, both measures would take effect immediately, with implementation required by the earlier of one year after enactment or the issuance of final regulations by the State Bank Commissioner.

As reported by Law360, the U.S. Department of Justice (DOJ) has decided to move forward with its $68 million settlement with Colony Ridge Development LLC without seeking court approval or ongoing judicial oversight. The settlement at issue (discussed here) resolves DOJ and Texas reverse redlining and predatory lending claims in exchange for extensive operational reforms and $48 million in infrastructure improvements plus $20 million in law enforcement and public-safety spending, but no civil money penalties or direct monetary relief to borrowers.

On April 7, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) issued a final rule to remove “reputation risk” from their supervisory and examination frameworks and sharply limit their ability to influence banks’ customer relationships based on political or ideological grounds. This final rule is a central implementation step for President Trump’s debanking initiative under Executive Order 14331, “Guaranteeing Fair Banking for All Americans,” which aims to address concerns about financial institutions improperly restricting access to banking services based on customers’ political, religious, or ideological beliefs.

The Tenth Circuit has granted rehearing en banc in National Association of Industrial Bankers v. Weiser, vacating its November 10, 2025, panel decision that had allowed Colorado to apply its Uniform Consumer Credit Code (UCCC) interest-rate caps to loans made by out-of-state, state-chartered banks to Colorado borrowers. The court’s prior judgment is vacated, issuance of the mandate is stayed, and the case is reopened for en banc consideration. As a result, the panel opinion narrowing DIDMCA preemption no longer reflects the current state of the law in the Tenth Circuit, and the scope of Colorado’s opt-out authority is once again unsettled.

The Federal Trade Commission (FTC) has taken a highly visible step into the national debate over “debanking” by sending warning letters to several large payment networks and financial services providers, reminding them that deplatforming or denying customers access to financial products or services due to political or religious beliefs could violate their existing obligations under Section 5 of the FTC Act. The FTC’s letters signal a sharpened enforcement focus on how financial services firms manage account closures, suspensions, and access to services, particularly when political or religious views are implicated.

In a decision of first impression, the Supreme Court of Virginia in Garofalo v. Di Vincenzo, defined what “evident partiality” means under the Virginia Uniform Arbitration Act (VUAA). The court held that a party seeking to vacate an arbitration award must show that a reasonable person, knowing all relevant facts, would conclude the arbitrator’s conduct signifies obvious bias against that party. Applying this standard, the court affirmed confirmation of a FINRA arbitration award and declined to vacate based on an arbitrator’s undisclosed, attenuated prior connections to one side.

In continuation of increased state efforts to regulate state-chartered banks and fintech partnerships,Oregon’s newly enrolled House Bill (HB) 4116 would enact an express “opt‑out” from a key provision of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) for consumer finance loans made in Oregon. HB 4116 also updates licensing requirements and clarifies when Oregon law applies to remote and online loans. This Oregon development comes on the heels of the Tenth Circuit’s decision in Weiser upholding Colorado’s DIDMCA opt-out and holding that a loan is “made in such State” if either the borrower or lender is located in the opt-out state as discussed here. A petition for rehearing en banc has been filed in Weiser, and it remains unsettled where a loan is “made” for purposes of DIDMCA.

In a recent decision, the U.S. Court of Appeals for the Eighth Circuit affirmed summary judgment in favor of Freedom Mortgage Corporation, rejecting Fair Credit Reporting Act (FCRA) claims brought by borrowers who insisted they had made their mortgage payments on time. The court held that the servicer accurately reported a 30‑day late payment and conducted a reasonable investigation in response to the borrowers’ disputes forwarded to it by the consumer reporting agencies (CRAs). The opinion reinforces two important principles: first, a payment can be accurately reported as late when it is not properly identifiable or conforming to the servicer’s payment instructions, and second, a furnisher’s investigative obligations are defined and limited by the information it receives from the CRAs.

In December 2023, we blogged about lawsuits filed by the Consumer Financial Protection Bureau (CFPB or Bureau), the U.S. Department of Justice (DOJ), and later the State of Texas against Colony Ridge and related entities. The complaints alleged that Colony Ridge targeted Hispanic borrowers with deceptive Spanish‑language marketing, sold largely undeveloped and flood‑prone land, and engaged in predatory financing by steering borrowers into high‑rate, seller‑financed mortgage loans with extremely high foreclosure rates.