All in Regulatory Update

CFPB Finds Unlawful Junk Fees During Supervisory Activities

Adam Witmer
Regulatory Update

On March 8, 2023, the CFPB released a special edition of its Supervisory Highlights that reports on unlawful junk fees uncovered in deposit accounts and in multiple loan servicing markets, including in mortgage, student, and payday lending. The said findings were found during examinations between July 1, 2022, and February 1, 2023. According to the CFPB, these unlawful fees corrode family finances, force up families’ banking and borrowing costs, and are not easily avoided, thus the agency is continuously rooting unlawful fees out of consumer financial markets.

IRS Warns Taxpayers from Filing Fake Returns

Adam Witmer
BSA, Regulatory Update

On March 3, 2023, the IRS issued a consumer alert to warn taxpayers of new scams that urge people to use wage information on a tax return to claim false credits in hopes of getting a big refund. According to the agency, the scheme encourages people to use tax software to manually fill out Form W-2, Wage and Tax Statement, and include false income information to get substantial refunds based on the large amount of withholding.

Agencies Crack Down on Third-Party Intermediaries Used to Evade Russia-Related Sanctions

Adam Witmer
BSA, Regulatory Update

On March 2, 2023, the Department of Commerce, Department of the Treasury, and Department of Justice issued a Tri-Seal Compliance to constrain the use of third-party intermediaries or transshipment points to circumvent restrictions, disguise the involvement of Specially Designated Nationals and Blocked Persons (SDNs) or parties on the Entity List in transactions, and obscure the true identities of Russian end users. The Compliance Note highlights several of these tactics to assist the private sector in identifying warning signs and implementing appropriate compliance measures.

Treasury Sanctions Companies for Timeshare Fraud

Adam Witmer
BSA, Regulatory Update

On March 2, 2023, the OFAC sanctioned eight Mexican companies linked to timeshare fraud on behalf of the Cartel de Jalisco Nueva Generacion (CJNG). A timeshare is a shared ownership model of vacation real estate in which multiple purchasers own allotments of usage in the same property. Timeshare fraud happens when scam artists call sellers of timeshares, posing as a reseller or real estate agent, then claims to have a buyer for the timeshare or guarantees he can sell the timeshare for a good price.

CFPB Examines High Fees Affecting Public Benefits

Adam Witmer
Regulatory Update

On March 1, 2023, the CFPB released a new issue spotlight examining how the financial products used to deliver public benefits, like Social Security and unemployment compensation, affect individuals’ ability to fully access the assistance provided through those programs. The issue spotlight outlines how governments often choose to deliver public benefits through financial products, particularly prepaid cards, that may subject recipients to high fees and cut into the amount of funds the consumer receives. 

CFPB: Why Credit Card Companies are Suppressing Actual Payment Data on Credit Reports

Adam Witmer
Regulatory Update

On February 16, 2023, the CFPB published a summary of its key findings after the Bureau requested information from the largest credit card companies in the U.S. regarding their practices around suppressing actual payment information from the nationwide consumer reporting system. These companies included JPMorgan Chase, Citibank, Bank of America, Capital One, Discover, and American Express.

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