On 2/18/2021, the Federal Reserve Board announced a final rule that should reduce risk and increase efficiency in the financial system by applying netting protections to a broader range of financial institutions. This final rule amends Regulation EE - which is the regulation on financial institution netting - to apply netting provisions to certain new entities including swap dealers. The rule would also make minor clarifications to the existing activities-based test in Regulation EE to clarify how the activities-based test applies following a consolidation of legal entities.

On 2/11/2021, the Federal Trade Commission (FTC) announced that they are banning the owners and operators of a vast payday lending scheme that overcharged consumers millions of dollars. The settlement also wipes out almost all of the outstanding debt owed to the entity as this debt was made up entirely of illegal finance charges. The organization operated online under the names Harvest Moon Financial, Gentle Breeze Online, and Green Stream Lending.

In their release, the FTC explained that the scheme used deceptive marketing to convince consumers that their loans would be repaid in a fixed number of payments. The FTC’s complaint alleged that the company instead continued to draw millions of dollars in payments from consumers’ bank accounts long after the loans’ original principal amount and stated repayment cost had been repaid, and would do so until consumers completely closed their bank accounts or found some other way to cut off payments.

On February 11, 2021, the CFPB published a blog post warning of online romance scams. As bankers often know first hand, consumers who have fallen for an online romance scam can be difficult to convince that they are a victim of a scam. This blog post from the Consumer Financial Protection Bureau (CFPB) may be something that could assist bankers in educating customers on the prevalence and risks of romance scams. After providing a brief introduction to romance scams, the blog post provides guidance on how to spot romance scammers, and concludes with tips to avoid romance scams.

On 2/10/21, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the GSEs) will extend several loan origination flexibilities until March 31, 2021. The changes are designed to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on February 28, 2021.

On February 4, 2020, the Federal Trade Commission announced that they had received more than 2.1 million fraud reports from consumers in 2020. They noted that imposter scams remained the most common type of fraud reported while online shopping was the second-most common fraud category reported by consumers. The top five categories rounded out with internet services; prizes, sweepstakes, and lotteries; and telephone and mobile services.