Regulatory Enforcement + Compliance

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On May 15, the Office of the Comptroller of the Currency (OCC) finalized two closely linked rules on mortgage escrow accounts that respond directly to the issues we discussed in our recent post, Second Circuit on Remand in Cantero: New York Escrow-Interest Law Is Preempted, Over a Vigorous Dissent. In that decision, the Second Circuit held that New York’s 2% interest‑on‑escrow statute is preempted as applied to national banks under the Barnett Bank standard, deepening a circuit split with the First and Ninth Circuits. The OCC’s new rules both adopt the Second Circuit’s view of the underlying bank powers and attempt to bring regulatory clarity to the interest‑on‑escrow preemption question for OCC‑regulated institutions nationwide.

On May 13, the Federal Trade Commission (FTC) filed and simultaneously settled a lawsuit against online digital photo and video platform Shutterstock, Inc. in the Southern District of New York, alleging that the company used deceptive “negative option” subscription practices in violation of § 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). According to the complaint, Shutterstock misled consumers about its “annual, paid monthly” (APM) plans and on‑demand “packs,” failed to clearly disclose automatic renewals and hefty early‑termination fees, converted “free trials” into paid annual plans without adequate notice, and made it difficult and time‑consuming for customers to cancel.

Marking the latest development in the trend toward increased regulation of automatically renewing subscription offers, on April 8, the New York City Department of Consumer and Worker Protection (DCWP) proposed what would be the nation’s first municipal “Click to Cancel” rule. This proposed regulation would mirror existing state law requirements providing for consumer rights and protections concerning automatic renewal or continuous service offers. In doing so, the DCWP takes aim at so-called “subscription traps” that it claims unfairly prevent consumers from discontinuing services they no longer wish to pay for. Specifically, the rule would make failure to offer consumers streamlined cancellation methods for continuous service offers a deceptive and unconscionable practice in violation of the New York City Administrative Code. This proposal marks the latest development in New York City’s efforts to prioritize consumer protection initiatives across economic sectors. Important elements of the proposed rule are summarized below.

On May 12, the Colorado legislature passed Senate Bill 26‑189, a substantial rewrite of its 2024 law establishing consumer protections for artificial intelligence (formerly referred to as the CO AI Act), and replaced it with a more targeted framework for “automated decision‑making technology” (ADMT). The changes will take effect on January 1, 2027.

Yesterday, California Governor Gavin Newsom announced the appointment of Rohit Chopra, former Director of the Consumer Financial Protection Bureau (CFPB) and former Federal Trade Commission (FTC) Commissioner, as Secretary of the state’s new Business and Consumer Services Agency (BCSA). The new cabinet‑level agency, which formally launches on July 1, 2026, is designed to consolidate and elevate state‑level consumer and market oversight at a moment when federal enforcement is being scaled back. Governor Newsom framed the move as bringing “one of the nation’s most prominent consumer protection leaders” into state government to crack down on corporate abuse, curb junk fees, and lower costs for Californians.

On April 28, Governor Wes Moore (D) signed Senate Bill 94 into law, significantly revising Maryland’s earned wage access (EWA) framework and tightening restrictions on tipping practices in both EWA programs and certain consumer loans. The new law amends multiple provisions of the Commercial Law Article and adds new sections governing advertising, anti‑discrimination, and regulatory safe harbors.

On May 6, several Senate Democrats sent letters to three nationwide consumer reporting agencies (CRAs) requesting detailed information about how Buy Now, Pay Later (BNPL) loans are being handled in consumer reporting. The letters, led by Senator Elizabeth Warren (D‑MA), follow a prior set of information requests made in November 2025 to BNPL providers about whether and how they furnish BNPL data to CRAs.

On May 5, Craig Trainor, Assistant Secretary for the Office of Fair Housing and Equal Opportunity (FHEO) at the U.S. Department of Housing and Urban Development (HUD), used the American Bankers Association’s Risk and Compliance Conference to send a clear message about how the Trump administration plans to enforce the Fair Housing Act (FHA) going forward, including with respect to how it will treat special purpose credit programs (SPCPs).

Today, the Consumer Financial Protection Bureau (CFPB or Bureau) released its final rule revising the 2023 small business lending data collection and reporting rule under the Equal Credit Opportunity Act (ECOA) and Regulation B, which implements Section 1071 of the Dodd-Frank Act (2026 Final Rule). The 2026 Final Rule will become effective 60 days after publication in the Federal Register, and the compliance date for initial data collection is January 1, 2028.

On April 8, Virginia Governor Abigail Spanberger signed SB 227, the Arbitration Fairness Act, into law. The Act not only regulates how high-volume arbitration providers select and oversee arbitrators, but also reshapes the rules for challenging an arbitration award after it has been issued. Designed to make consumer and employment arbitrations more transparent and balanced when administered by high‑volume arbitration service providers, SB 227 will take effect on July 1, 2026, and will apply to all arbitration agreements entered into on or after that date.