Regulatory Enforcement + Compliance

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Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) filed a brief in the U.S. District Court for the Northern District of Texas in support of its motion to dissolve the preliminary injunction that has stayed the implementation of its credit card late fee rule. Concurrently, the Bureau also filed a notice of supplemental authority in support of their motion to dismiss or transfer on the grounds that the Fort Worth Chamber of Commerce does not have associational standing to bring the suit. Within hours, the court issued an order requiring further briefing on the issue of associational standing.

After several attempts in the Missouri legislature, last week Governor Mike Parson signed a Commercial Financing Disclosure Law. This legislation requires certain disclosures to be made by providers of commercial purpose closed-end and open-end loans, and sales-based financing transactions. The law will take effect six months after the Division of Finance finalizes promulgating rules or on February 28, 2025, if the Division does not intend to promulgate rules.

As we predicted here, the Consumer Financial Protection Bureau (CFPB or Bureau) last week proposed new and, in some cases, streamlined rules governing what mortgage servicers must do after a borrower becomes delinquent. The proposed rules incorporate some pandemic-era practices, such as allowing servicers to offer assistance without a comprehensive review of the borrower’s financial situation. According to the CFPB, the new rules would require mortgage servicers to prioritize loss mitigation over foreclosing, reduce paperwork requirements, improve communication with borrowers, and ensure critical information is provided in the borrowers’ preferred language.

As discussed here, on February 3, 2023, an Illinois federal court dismissed a case brought by the Consumer Financial Protection Bureau (CFPB or Bureau) in 2020 against Townstone Financial, Inc., a Chicago mortgage lender, for alleged violations of the Equal Credit Opportunity Act (ECOA). The CFPB had accused Townstone of discouraging prospective African American applicants in the Chicago metropolitan area from applying for mortgages.

On July 5, the California Privacy Protection Agency (CPPA) published a Notice of Proposed Rulemaking regarding Data Broker Registration pursuant to Senate Bill 362 (the Delete Act). The Delete Act requires the CPPA to establish an accessible deletion mechanism. This mechanism allows a consumer, through a single verifiable consumer request, to request that every data broker delete any personal information related to that consumer held by the data broker or associated service provider or contractor. The stated aim of the proposed rulemaking is to clarify and enhance the registration process for data brokers.

The California Department of Financial Protection and Innovation (DFPI) has once again modified its proposed rulemaking on earned wage access (EWA) products. As discussed here, this spring the Office of Administrative Law (OAL) rejected the proposed regulations for failure to comply with the clarity standard of the Administrative Procedure Act (APA) and failure to follow the required APA procedures. These new modifications attempt to address those concerns.

On July 1, amendments to Florida’s Consumer Finance Act took effect. Among other things, the amendments raise the maximum tiered interest rates on consumer finance loans, increase the grace period before late fees can be imposed from 10 to 12 days, require licensees to offer free credit education courses to borrowers at the time a loan is made, provide for the suspension of certain collection activities in the event of a disaster, and require branches of businesses making consumer finance loans to obtain a license.

On July 2, the Consumer Financial Protection Bureau (CFPB or Bureau) published the summer edition of its Supervisory Highlights, focusing on examinations of auto and student loan servicing companies and debt collectors that were completed between April 1, 2023 and December 31, 2023. The report also highlights consumer complaints about medical payment products and identifies concerns with financial institutions freezing deposit accounts.

Today, the U.S. Supreme Court issued a landmark decision in Loper Bright Enterprises v. Raimondo overruling the Chevron doctrine. This decision marks a watershed moment in administrative law, fundamentally altering the landscape for judicial review of agency actions under the Administrative Procedure Act (APA).

On April 17, 2024, Virginia enacted HB 1519 taking a significant step towards amending the Virginia Consumer Protection Act (VCPA) to prohibit creditors from charging fees for accepting electronic payments in connection with credit transactions in Virginia. However, this amendment will not become effective unless the Virginia General Assembly reenacts the bill in 2025. Between now and then, the Virginia State Corporation Commission will assess this change and report its findings to the General Assembly by December of this year.