To help you keep abreast of relevant activities, below find a breakdown of some of the biggest events at the federal and state levels to impact the Consumer Finance Services industry this past week:
- On October 14, U.S. Representative and Chairman of the Select Subcommittee on the Coronavirus Crisis James Clyburn sent a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra to request that the agency review the nation’s three largest nationwide consumer reporting agencies (NCRAs) for possible violations of the Fair Credit Reporting Act (FCRA), including potentially failing to investigate legitimate consumer disputes. This letter follows Chairman Clyburn’s May 2022 letters to the NCRAs, requesting information on the companies’ efforts to respond to and resolve credit reporting inaccuracies raised by consumers during the pandemic. For more information, click here.
- On October 13, the CFPB published a report on terms and fees associated with banking products marketed in partnership with colleges to students. The report raises questions about whether some marketing deals between colleges and financial institutions comply with Department of Education rules. In conjunction with the release of this report, the Department of Education issued guidance to schools on requirements for college-sponsored banking arrangements, while committing to additional oversight on this issue. For more information, click here.
- On October 13, the CFPB, the Federal Reserve Board, and the Office of the Comptroller of the Currency (OCC) announced that the 2023 threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans will increase from $28,500 to $31,000. For more information, click here.
- On October 13, the Federal Reserve and the CFPB announced the dollar thresholds used to determine whether certain consumer credit and lease transactions in 2023 are exempt from Regulation Z (truth in lending) and Regulation M (consumer leasing). For more information, click here.
- On October 12, Federal Trade Commission Chair Lina Khan and the Department of Justice – Antitrust Division Assistant Attorney General Jonathan Kanter participated in the G7 Joint Competition Policy Makers & Enforcers Summit as part of the “2022 G7 Digital and Technology Track.” Hosted by the German Bundeskartellamt and Ministry for Economic Affairs and Climate Action, the summit explored how G7 governments approach competition policy and enforcement in digital markets. The participating delegates included G7 competition authorities and economic ministries from Canada, France, Germany, Italy, Japan, the U.K., and the U.S., plus the European Commission. For more information, click here.
- On October 12, Federal Reserve Vice Chair for Supervision Michael Barr delivered remarks at DC Fintech Week in a speech titled, “Managing the Promise and Risk of Financial Innovation,” which focused on financial innovation supported by new technologies or fintech. For more information, click here.
- On October 12, Coin Center, a nonprofit digital assets advocacy group, filed a lawsuit against the U.S. Department of Treasury (Treasury) in the U.S. District Court for the Northern District of Florida, arguing the sanctions the Treasury imposed on Tornado Cash exceeded its regulatory authority because Tornado Cash, as open-source software available to the public, does not constitute a “person” as defined by the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.). For more information, click here.
- On October 11, the CFPB issued its 27th edition of Supervisory Highlights, which included findings on examinations of student loan servicers. For more information, click here.
- On October 11, U.S. Representative Patrick McHenry led Republican members of the Task Force on Financial Technology in sending a letter to Acting Comptroller of the Currency Michael Hsu. Task force Republicans urged Acting Comptroller Hsu to clarify the OCC’s position on partnerships between banks and financial technology firms, as well as provide clarity to the marketplace. For more information, click here.
- On October 11, JPMorgan and Visa announced their collaboration to facilitate cross-border payments. JPMorgan’s proprietary blockchain platform Onyx, primarily used for wholesale payment transactions, has an integrated Interbank Information Network, which JPMorgan rebranded as Liink. Liink enables user institutions to transfer payment-related account information efficiently and securely without the use of correspondent banking. Confirm, one of Liink’s product stacks, enables user institutions to validate account information prior to payment initiation, which ensures payments will reach the desired end client. Visa, through its multilateral payment network B2B Connect, will integrate Confirm into its processes to validate Visa-facilitated cross-border payments. For more information about JPMorgan’s Liink, click here. For more information about Visa’s B2B Connect, click here.
- On October 11, the Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) announced settlements for over $24 million and $29 million, respectively, with Bittrex, Inc. (Bittrex), a virtual currency exchange based in Bellevue, WA. This is OFAC’s largest virtual currency enforcement action to date. It also represents the first parallel enforcement actions by FinCEN and OFAC in this space. Investigations by OFAC and FinCEN found apparent violations of multiple sanctions programs and willful violations of the Bank Secrecy Act’s anti-money laundering and suspicious activity report reporting requirements. For more information, click here.
- On October 11, the Financial Stability Board (FSB) published a proposed framework for the international regulation of crypto-asset activities. Within the proposed framework, the FSB directed a set of questions to the public and will solicit comments on the proposed recommendations up and until December 15. For more information, click here.
- On October 11, Acting Comptroller of the Currency Michael Hsu delivered remarks at DC Fintech Week, where he discussed the importance of identifying and monitoring cryptocurrency risks to protect consumers and the financial system. For more information, click here.
- On October 10, the FSB issued “G20 Roadmap for Enhancing Cross-Border Payments,” which focused on five areas: (1) committing to a joint public and private sector vision to enhance cross-border payments; (2) coordinating on regulatory, supervisory, and oversight frameworks; (3) improving existing payment infrastructures and arrangements to support the requirements of cross-border payments market; (4) increasing data quality and straight-through processing by enhancing data and market practices; and (5) exploring the potential role of new payments infrastructures and arrangements. For more information, click here.
- On October 6, the CFPB issued a blog post on mortgage borrowers’ ability to challenge inaccurate appraisals through the reconsideration of value process. For more information, click here.
- On October 6, the Federal Reserve announced that it will replace its current bank application filing system with a new and upgraded system later this month. Applications’ substantive requirements will remain the same in the new system, making the filing process more intuitive and minimizing paper applications and communications. For more information, click here.
- On October 3, FSB Chair Klaas Knot sent a letter to the G20 finance ministers and Central Bank governors, concerning global financial stability occurring after the release of two FSB reports. The letter expressed concerns that the risks crypto assets pose to financial stability are “likely to come back to the fore sooner rather than later.” For more information, click here.
- On October 12, New York Attorney General Letitia James secured nearly $2 million from an e-commerce retailer for its failure to properly remediate a data breach that compromised consumers’ personal information worldwide. Based on information discovered during its investigation, the AG’s office determined that the company failed to implement appropriate safeguards to protect consumer data prior to the breach, failed to take action to protect consumer data after the breach, and failed to accurately communicate the extent of the cyberattack to consumers. In addition to paying the penalties, the company must also enhance its cybersecurity measures to protect consumer data going forward. For more information, click here.
- On October 12, Maryland Attorney General Brian Frosh issued a warning to consumer vehicle buyers to be on high alert for vehicles potentially damaged by large-scale floods. Frosh warns consumers that in the wake of hurricanes like Ian, flood-damaged vehicles commonly make their way to salvage auctions. However, as Frosh warns, these vehicles are not always properly branded as “salvage” or “total loss” vehicles when they hit the market for consumption. Accordingly, Frosh gives consumers several tips to identify flood-damaged vehicles before making a purchase. For more information, click here.