As discussed here, in March 2023, the California Department of Financial Protection and Innovation (DFPI) proposed new regulations under the California Financing Law that would interpret the definition of “loan” to include “income-based advances” or earned wage access (EWA) products, except those offered by employers. The proposal also sought to require providers of such products to register with the state, and imposed requirements on debt settlement companies and education financing providers.
The Consumer Financial Protection Bureau (CFPB) recently released an Issue Spotlight highlighting the costs and fees associated with Health Savings Accounts (HSAs). While acknowledging that HSAs offer tax advantages that can help offset the costs of high deductible health plans (HDHPs), the CFPB’s report noted that these benefits can be significantly offset by various costs.
On May 1, the Federal Housing Administration (FHA), and the Federal Housing Finance Agency (FHFA) announced new policies that will allow borrowers to challenge property appraisals they believe to be inaccurate or biased.
On April 30, the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the district court’s effective denial of the motion for a preliminary injunction filed by several trade groups, including the U.S. Chamber of Commerce, Fort Worth Chamber of Commerce, Longview Chamber of Commerce, American Bankers Association, Consumer Bankers Association, and Texas Association of Business (collectively, the trade groups). The trade groups are challenging the credit card late fee rule issued by the Consumer Financial Protection Bureau (CFPB) as unconstitutional and violative of the Administrative Procedures Act and seek a preliminary injunction while the case is pending.
On April 24, the Consumer Financial Protection Bureau (CFPB or Bureau) released a special edition of its Supervisory Highlights report focusing on examinations of the residential mortgage servicing market that were completed between April 1, 2023 and December 31, 2023. According to the report, the CFPB found instances of mortgage servicers charging illegal fees, such as prohibited property inspection fees, and sending deceptive notices to homeowners. Examiners also found servicers violating Regulation X’s loss mitigation rules.
On April 19, Kansas Governor Laura Kelly signed House Bill (HB) 2560 to regulate earned wage access (EWA) products and services. HB 2560 enacts the Earned Wage Access Services Act that requires EWA providers to be licensed by the state bank commissioner and comply with certain disclosure rules. Kansas follows Nevada, Missouri, and Wisconsin in enacting EWA legislation.
Recently, the Consumer Financial Protection Bureau (CFPB or Bureau) submitted letters to senators in Connecticut and California supporting their proposals to prohibit medical debt reporting.
On April 17, the Consumer Financial Protection Bureau (CFPB or Bureau) entered a consent order against BloomTech, a for-profit vocational school, and its CEO, Austen Allred, for deceptive marketing practices related to income-share agreements (ISAs). The CFPB found that BloomTech and Allred misled students about the nature and cost of their ISAs and made false claims about job-placement rates for graduates. The CFPB’s action highlights the Bureau’s ongoing scrutiny of ISAs, including the Bureau’s classification of ISAs as loans, and the Bureau’s concern that consumers may not fully understand the true cost of their educations if they use ISAs.
Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a procedural rule streamlining the designation proceedings for nonbank supervision based on a particular entity posing “risks to consumers.” As discussed in “Our Take” below, the changes are designed to encourage nonbanks to volunteer to be supervised, while making it easier for the CFPB to impose supervisory oversight when companies do not consent.
In a recent speech at the National Consumer Law Center/National Association of Consumer Advocates Spring Training, Seth Frotman, General Counsel of the Consumer Financial Protection Bureau (CFPB or Bureau), focused on medical billing and collections and tenant screening and debt, emphasizing the CFPB’s enforcement of the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA) in these areas.