On September 19, the Consumer Financial Protection Bureau (CFPB) issued Circular 2023-03, which provides guidance as to how lenders must explain denials of applications of credit when the underwriting is based on artificial intelligence (AI) or complex credit models. The upshot of the guidance is that a lender that denies an application for credit

CFPB Sets Sight On “Buy Now Pay Later” in Targeted InquiriesOn December 16, the CFPB announced that it had issued orders to five companies providing “Buy Now Pay Later” (BNPL) products to “collect information on the risks and benefits of these fast-growing loans.” Earlier this year, the CFPB released a blog directed at consumers explaining how BNPL products operate and identifying potential risks associated with

After (Another) Unusual Year, We’re Very Thankful and Wish You a Happy ThanksgivingNow that the pandemic’s “social distancing” is lessening, we hope you are all able to gather with friends and family this Thanksgiving. As we do the same, we wanted to count our blessings as we review the year. This year, we are thankful for being able to return to our offices, our favorite restaurants, and

The CFPB Director Expresses Concern About Section 1071 Regulatory Burdens on Small BanksAfter the Consumer Financial Protection Bureau (CFPB) issued their Notice of Proposed Rulemaking (NPRM) related to Dodd-Frank 1071, Rohit Chopra, the new CFPB director, expressed his concern regarding the regulatory burden that the proposed rule would have on small banks. Director Chopra stated that he hoped the CFPB could move towards bright-lined rules that are

New York DFS Proposes Regulation to Implement TILA-Like Requirements on Small Business LoansOn September 21, 2021, New York’s Department of Financial Services (DFS) announced proposed regulations that clarify the small business Truth in Lending disclosure requirements that go into effect on January 1, 2022. The proposed regulations come just in time as non-banks and fintechs are attempting to prepare to comply with the commercial financing law with

CFPB Issues NPRM on Dodd-Frank 1071; Bradley to Host Initial Webinar on September 8Yesterday, the Consumer Financial Protection Bureau (CFPB) issued its long-awaited Notice of Proposed Rulemaking (NPRM) related to Dodd-Frank 1071. As we have discussed in this space, Section 1071 amends the Equal Credit Opportunity Act to mandate certain reporting requirements for financial services companies making business loans. The act aims to “facilitate enforcement of fair

CFPB Signals Continued Progress Toward Dodd-Frank 1071 Notice of Proposed RulemakingOn the heels of CFPB Acting Director Dave Uejio’s recently released statement to agency staff members, the Bureau again signaled that it is making progress toward issuing a Notice of Proposed Rulemaking (NPRM) enacting Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). Specifically, in late February, the CFPB

Acting CFPB Director Uejio Reiterates Commitment to Issuing Regulations Enacting Dodd-Frank 1071On February 4, 2021, acting CFPB Director Dave Uejio published a blog post sharing statements recently made to the staff of the CFPB’s Division of Research, Markets, and Regulations (RMR). In his post, Uejio stressed two policy priorities for the CFPB: “(1) relief for consumers facing hardship due to COVID-19 and the related economic crisis

Florida Court Affirms That Merchant Cash Advance Product Not Subject to Usury StatuteThis month, a Florida appellate court held that a merchant cash advance (MCA) purchase and sale agreement was not a “disguised loan” and, therefore, was not subject to Florida’s criminal usury statute. MCA purchase and sale agreements, which offer merchants a fast and efficient way to obtain funding for their operations, are not loans. Rather,

CFPB Approves Synchrony’s “Dual-Feature Credit Card”On December 30, 2020, the CFPB approved Synchrony Bank’s application to offer a “dual-feature credit card” (DFCC) under the CFPB’s Compliance Assistance Sandbox (CAS) policy. According to Synchrony’s application, the DFCC allows consumers to graduate from a secured-use credit card to an unsecured feature after at least one year and if the customer satisfies