To keep you up to date on recent developments, below are several of the most significant federal and state events that have impacted the consumer finance services industry in the past week:
federal activities
state activities
Federal Activities:
- On September 18, the Federal Trade Commission (FTC) warned five tax preparation companies if they use or disclose confidential data collected from consumers for the purpose of preparing their taxes for other unrelated purposes, such as advertising. They may face civil penalties. Obtaining consumer consent. The FTC sent notices of penal offenses that warn recipients that if they misuse personal data contrary to the original purpose for which the information was collected, they could face civil penalties of up to $50,120 per violation. Click here for more information.
- On September 15, Graham Steele, U.S. Treasury Assistant Secretary for Financial Institutions, delivered remarks at the Electronic Transactions Association Fintech Policy Forum, where he talked about Treasury’s policy portfolio, which includes Treasury’s policy stances on banks, credit unions, and the insurance sector. involved developing ideas. as well as cyber security and critical infrastructure, community development and consumer protection. Click here for more information.
- On September 15, the Financial Crimes Enforcement Network (FinCEN) assessed a $15 million civil money penalty against Bancredito International Bank & Trust Corporation (Bancredito) for willful violations of the Bank Secrecy Act and its implementing regulations. This was FinCEN’s first enforcement action against a Puerto Rican international banking entity and involves the first violation for failure to implement and maintain an anti-money laundering program under the GAP Rule. Click here for more information.
- On September 14, the Consumer Financial Protection Bureau (CFPB) updated its FAQs related to the final Small Business Loan Rule (the Rule). The FAQ is a resource issued by the CFPB to help small business lenders and finance companies understand and comply with the rule implementing Section 1071 of the Dodd-Frank Act. Click here for more information.
- On September 14, the CFPB released a report on tuition payment plans in higher education. Ninety-eight percent of colleges now allow students to pay for their education in installments using tuition payment plans. Tuition payment plans have a wide range of structures and can be managed by schools or administered by third-party payment processors. Typically, tuition payment plans are interest-free, but, according to the CFPB, many charge enrollment fees, late fees and returned payment fees. The bureau claims that these fees can lead to higher costs of credit. Specifically, the CFPB states that when the amount borrowed is small and the enrollment fee is high, students may face annual percentage rates as high as 237%. Click here for more information.
- On September 14, the Office of the Comptroller of the Currency (OCC) reported cumulative business revenues of US commercial banks and savings associations in the second quarter of 2023 of $13.7 billion. Second quarter trading revenue was down $3.9 billion, or 22.4%. $3.3 billion, or 31.7% more than last quarter and Q2 2022. Click here for more information.
- On September 14, Senate Banking Committee Chairman Sherrod Brown sent a letter to Treasury Department Secretary Janet Yellen, Securities and Exchange Commission (SEC) Chairman Gary Gensler, and Commodity Futures Trading Commission Chairman Rostin Behnam, asking them to impose stricter disclosure standards. Urged to implement. Cryptocurrency companies to protect investors from the risks of fraud. The letter says that regulators should “do more to protect crypto users from this misconduct and begin to improve the available data and documentation so that Americans can evaluate tokens based on reliable information,” and that “[c]“Comprehensive and regular disclosures must be the cornerstone of any approach to digital assets.” Brown explained that existing tools available to regulators could be used to “strengthen transparency and hold bad actors accountable.” More information Click here for.
- On September 13, the SEC charged Stoner Cats 2 LLC (Stoner Cats) with conducting an unregistered offering of crypto asset securities in the form of purported non-fungible tokens (NFTs), which solicited investors to finance an animated web series. Raised approximately $8 million. Stoner Cats. The SEC’s orders allege that Stoner Cats: (1) offered and sold more than 10,000 NFTs to investors for approximately $800 each, which sold out in 35 minutes; (2) Before and after the Stoner Cats NFTs were sold to the public, Stoner Cats’ marketing campaign highlighted the specific benefits of owning them, including the option for owners to resell their NFTs on the secondary market Was; (3) As part of the marketing campaign, the Stoner Cats team emphasized their expertise as Hollywood producers, their knowledge of crypto projects, and the well-known actors involved in the web series, luring investors hoping to make profits Because there can be a successful web series. Reason for increase in resale value of Stoner Cats NFTs in the secondary market; and (4) Stoner Cats configured Stoner Cats NFTs to provide the Company with a 2.5% royalty for each secondary market transaction in the NFT and it incentivized individuals to buy and sell NFTs, providing buyers with at least $20. More than a million dollars had to be spent. 10,000 transactions. According to the SEC’s order, Stoner Cats violated the Securities Act of 1933 by offering and selling these crypto asset securities to the public in an unregistered offering that was not exempt from registration. Click here for more information.
- On September 13, the OCC announced that it would host a public meeting of the Mutual Savings Association Advisory Committee on Tuesday, October 3. The meeting, which will be held in person and virtually, is open to the public. Click here for more information.
- On September 11, the FTC announced that it would require two background report providers to settle charges that they deceived consumers about whether consumers had criminal records and that the companies acted as consumer reporting agencies. Violated the Fair Credit Reporting Act (FCRA). Among other things, they have failed to ensure the maximum possible accuracy of their consumer reports. Click here for more information.
- On September 8, Philadelphia Federal Reserve (Fed) Senior Vice Chairman William Spaniel addressed the Fed’s recent guidance, which requires banks to receive pre-approval by the Fed before offering stablecoins. Spaniel explained that he does not see this process as an “obstacle” for companies, but instead as a “necessary discussion between the supervisor and the entity” regarding the entity’s preparation to offer such a product. Let’s look at what “conforms to safety” soundness or consumer compliance. Click here for more information.
State Activities:
- On September 14, a federal district court in the Eastern District of Kentucky became the second court to issue an order granting the plaintiffs’ motion for a preliminary injunction to prevent the CFPB from implementing its final rule under Dodd § 1071. Partially approved. Frank Wall Street Reform and Consumer Protection Act (Final Rule) against Plaintiffs and their members. (A discussion of the first injunction issued by a Texas federal court can be found here.) Injunction Monticello Banking Company v. CFPB Will be dissolved if the US Supreme Court reverses the Fifth Circuit Community Financial Services Association (CFSA) V CFPB Case, which found the CFPB’s funding structure to be unconstitutional and, therefore, invalidated the rules promulgated by the CFPB. Click here for more information.
- On September 13, New York Attorney General (AG) Letitia James filed a lawsuit against a travel company and its founder, alleging that the company failed to refund canceled trips to more than 100 residents of the state, including some Also included were trips that were cancelled. COVID-19 pandemic. The lawsuit alleges that the Massachusetts-based company engaged in unfair and deceptive trade practices, failing to honor the company’s cancellation policy to promptly refund consumers whose trips the company canceled or consumers who had canceled their trips for health reasons. The lawsuit also alleges that the company misrepresented cancellations as “postponements”, sometimes rescheduling trips more than a year after the initial trip date. In other cases, the company would only offer credits to consumers who did not want to postpone their trips, according to the complaint. The AG is seeking civil penalties and recoveries as well as full compensation for all affected consumers within the state. Click here for more information.
- On September 12, Maryland AG Anthony G. Brown announced a $35 million settlement with a specialized consumer finance company, resolving a multistate investigation into the company’s advertising and leasing practices. The investigation, which involved 41 states and the District of Columbia, exposed several of the company’s marketing and sales practices that led consumers to believe they were purchasing pursuant to an installment plan or credit sale, when they were actually purchasing a lease agreement. Were entering. As a result, consumers often have to pay two to three times the purchase price for a product or service. Under the terms of the agreement, the company is permanently barred from engaging in consumer leasing activities. Additionally, all of the company’s existing leases will be cancelled, although consumers will be allowed to retain leased product without making further payments. The Company must also refrain from submitting negative information regarding consumers’ accounts to any consumer reporting agency. The company is also required to pay $1 million to states participating in the settlement and $1 million to the CFPB. Click here for more information.
- On September 11, California AG Rob Bonta sent a letter in response to a Request for Information (Request) issued jointly by the CFPB, the U.S. Department of Health and Human Services, and the U.S. Department of the Treasury, seeking public comment on medical credit cards, loans Went. , and other financial products used by agencies to pay for health care, particularly with regard to health equity concerns, consumer confusion, best practices for medical providers offering Medicare payment products, and consumer protection. Let’s address the requested questions. According to Bonta, “California is uniquely qualified to comment on [Request] Because it has enacted a strong consumer protection act to protect patients from harm caused by these products.” Click here for more information.
Source: www.jdsupra.com
