Category Archives: Banking

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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 certain … Continue Reading

New York DFS Turns Up the Heat with Climate Change Bulletin

The New York Department of Financial Services (DFS) has issued a bulletin on climate change and financial risks to the financial institutions and insurance companies it supervises regarding the impact of climate change on those institutions. DFS asserts that “[f]inancial risks from climate change are unprecedented” and notes a warning from the Bank for International … Continue Reading

FHA Posts Proposed Rule Permitting Acceptance of Private Flood Insurance

On November 10, 2020, the U.S. Department of Housing and Urban Development (HUD)  released a proposed amendment to Federal Housing Administration (FHA) regulations that would allow lenders to accept private flood insurance policies on FHA-insured properties located in Special Flood Hazard Areas. HUD will accept comments for 60 days following the date the proposed rule, … Continue Reading

CFPB Issues Advanced Notice of Proposed Rulemaking on Section 1033 for Consumer-Authorized Access to Financial Data

On October 22, 2020, the CFPB issued an advance notice of proposed rulemaking (ANPR) soliciting comments on implementation of Section 1033 of the Dodd-Frank Act. As outlined in the ANPR, Section 1033 will require consumer financial service providers to give consumers access to financial account data in a usable electronic format. This data includes information … Continue Reading

Federal District Court Stays Effective Date and Enjoins Enforcement of HUD’s Final Rule on the Fair Housing Act’s Disparate Impact Standard

On October 24, 2020, the U.S. Department of Housing and Urban Development’s (HUD) final rule on the implementation of the Fair Housing Act’s disparate impact standard was scheduled to become effective. That effective date was short lived: on October 25, 2020, the U.S. District Court for the District of Massachusetts entered a preliminary injunction staying … Continue Reading

OCC Releases Final True Lender Rule

On October 27, 2020, the OCC released its final True Lender Rule. As discussed earlier on this blog, the OCC’s rule is designed to clarify the “true lender” doctrine, a legal test utilized by courts and regulators to determine whether a bank or its non-bank partner is the actual lender in a credit transaction. The … Continue Reading

State Attorneys General Challenge FDIC’s Madden Fix

In early August 2020, several state attorneys general filed suit against the Office of the Comptroller of the Currency (OCC) challenging the OCC’s proposed “Madden Fix.” Notably, while the Federal Deposit Insurance Corporation (FDIC) also issued their own Madden Fix, the agency was not named as a defendant in the initial lawsuit. As such, it … Continue Reading

HUD Issues Final Rule on the Fair Housing Act’s Disparate Impact Standard

On September 3, 2020, the U.S. Department of Housing and Urban Development (HUD) issued its final rule on the implementation of the Fair Housing Act’s disparate impact standard. The Fair Housing Act (FHA) prohibits discrimination in many housing-related activities on the basis of race, color, religion, sex, disability, familial status, and national origin. For at … Continue Reading

Agencies Offer Regulatory Assistance in Disaster Affected Areas

On the first day of National Preparedness Month, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Conference of State Bank Supervisors issued a joint statement recognizing the impact of Hurricane Laura and the California … Continue Reading

DOJ Tells Investment Adviser that Payment to Foreign Government-Owned Bank Will Not Prompt FCPA Enforcement Action

On August 14, 2020, the Department of Justice (DOJ) issued its first Foreign Corrupt Practices Act (FCPA) Opinion Procedure Release in six years. In the opinion, DOJ advised that it would not bring an enforcement action against a U.S.-based investment adviser if the firm moved forward with paying an advisory fee to a foreign investment … Continue Reading

New FAQ Responses to Small Dollar Rule Address Auto and Mortgage Lending, Payment Transfers and Notices Inclusion

On Tuesday, August 11, 2020, the CFPB issued a second round of answers to frequently asked questions related to the Small Dollar Rule. The FAQ responses range from addressing more nuanced provisions of the payment provision portion of the rule to the overall coverage of the rule. Covered Loan Coverage For the most part, auto … Continue Reading

State Attorneys General Challenge OCC Madden Fix

Last Wednesday, the attorneys general of Illinois, California, and New York filed a lawsuit in the United States District Court for the Northern District of California challenging the Office of the Comptroller of the Currency’s proposed “Madden Fix.” This proposed rule, which we have discussed in detail, is designed to resolve some of the legal … Continue Reading

OCC Proposes Clarification to True Lender Doctrine

Earlier this week, the OCC released a proposed rule designed to address the “true lender” doctrine, a legal test utilized by courts and regulators to determine whether a bank or its non-bank partner is the actual lender in a credit transaction. This doctrine has led to uncertainty in the fintech and bank-partnership spaces, in large … Continue Reading

OCC, FDIC Issue Long-Awaited Valid-When-Made “Madden Fix”

Recently, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) issued final rules designed to resolve the uncertainty created by the Second Circuit Court of Appeals’ decision in Madden v. Midland Funding, 786 F.3d 246 (2d Cir. 2015). In Madden, the court called into doubt the valid-when-made doctrine, … Continue Reading

CFPB Rescinds Small Dollar Rule Ability to Repay Provisions However Payment Provisions Remain

On July 7, 2020, the Consumer Financial Protection Bureau (CFPB) issued its final rule in regard to so-called small dollar loans. The biggest change from the CFPB’s original iteration of the rule, the 2017 Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule (“small dollar rule”) is the bureau’s decision to rescind the ability to … Continue Reading

Hemp Banking – FinCEN Issues New Guidance Regarding AML/BSA Obligations

This article was written in collaboration with Jake Fanella and Jessica Caballero at VeriLeaf.  VeriLeaf is a modern RegTech platform that optimizes the onboarding, review and ongoing compliance required for high-risk banking markets. VeriLeaf leverages state-specific requirements and the financial institution’s compliance program to streamline qualification, risk assessment, and onboarding of high-risk businesses in markets … Continue Reading

Supreme Court Holds That Part of CFPB’s Structure Is Unconstitutional

This morning, the United States Supreme Court issued its decision in Seila Law v. CFPB. Authoring the opinion for a five-justice majority, Chief Justice John Roberts wrote that the Consumer Financial Protection Bureau’s (CFPB) single-director configuration, in which the CFPB’s director can only be removed for a specific list of reasons, was unconstitutional. However, the … Continue Reading

Joint Statement Issued by Federal Banking Regulators to Encourage (Yes, Encourage) Responsible Small-Dollar Lending in Response to COVID-19

Following previous guidance issued by (and in some cases withdrawn by) the OCC, CFPB, Federal Reserve, FDIC, and NCUA, the federal financial institution regulatory agencies published a joint statement on March 26, 2020, in response to COVID-19 “to specifically encourage financial institutions to offer responsible small-dollar loans to both consumers and small businesses.” The statement … Continue Reading

Invested in a Foreign Enterprise? Don’t Miss the May 29 Mandatory Filing Deadline for the BEA Benchmark Survey

As financial services companies struggle to adapt to meet the unprecedented challenges imposed upon them by the COVID-19 outbreak, they also must not lose sight of other pre-existing federal mandates, such as the upcoming benchmark survey requirement imposed upon all businesses with ownership interests in foreign enterprises. The consequences of a financial service company failing … Continue Reading

FHFA Announces COVID-19 Forbearance Relief for Mortgage Servicers

In a statement released on April 21, 2020, the Federal Housing Finance Agency (FHFA) announced that mortgage servicers would only be required to advance four months of missed payments for Fannie Mae and Freddie Mac owned loans on CARES Act forbearance plans. After that four-month period, FHFA explained the servicers would be under “no further … Continue Reading

Ginnie Mae Announces PTAP Assistance for Issuers

In an All Participants Memo dated April 10, 2020 (APM 20-03), Ginnie Mae announced that it revised and expanded its issuer assistance programs in Chapter 34 of the Mortgage Backed Securities Guide (MBS Guide) to include a Pass-Through Assistance Program (PTAP) in response to the COVID-19 national emergency declaration. The program announced in APM 20-03 … Continue Reading

Credit Reporting Requirements and COVID-19 – CFPB and FHA Weigh In

We’ve been tracking regulatory developments related to credit reporting for loans where borrowers have been affected by the coronavirus outbreak. On April 1, the CFPB issued a statement about credit reporting for loans affected by COVID-19. The statement announces the CFPB’s “flexible supervisory and enforcement approach during this pandemic” and seeks to reassure credit reporting … Continue Reading

Mortgage Servicers: Keep an Eye on the CFPB’s Advice to Borrowers Impacted by COVID-19

On March 31, 2020, the CFPB posted a “Guide to coronavirus mortgage relief options,” which provides instruction to mortgage loan borrowers who may be impacted by COVID-19 on when and how to go about obtaining assistance. While we have previously discussed compliance challenges that are likely to arise related to verbal loss mitigation applications and … Continue Reading

Federal Reserve Implements Aggressive Liquidity Campaign as Growing Corporate Debt Threatens to Exacerbate COVID-19 Economic Toll

In response to the recent COVID-19 outbreak, Congress recently approved a $2 trillion stimulus package in an attempt to offset the potentially disastrous economic effects of COVID-19. Meanwhile, central banks are implementing increasingly drastic measures aimed at preserving the availability of capital during the looming recession, which appears increasingly imminent as the global economy remains … Continue Reading
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