All in Regulatory Update

FTC Submits Annual Report on TILA, CLA, and EFTA Enforcement

Adam Witmer
Regulatory Update

On June 8, 2023, the FTC submitted its annual enforcement report to the CFPB on its enforcement efforts and related activities in 2022 on the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA). The report highlights the FTC’s enforcement actions related to the acts and their implementing regulations, including in the areas of automobile purchases and financing, payday lending, credit repair and debt relief, other credit, and electronic fund transfers.

Agencies Propose Rule on AVMs Quality Control Standards

Adam Witmer
Regulatory Update, Appraisals

On June 1, 2023, the federal regulatory agencies requested public comment on a proposed rule designed to ensure the credibility and integrity of models used in real estate valuations. Specifically, the proposed rule would implement quality control standards for automated valuation models (AVMs) used by mortgage originators and secondary market issuers in valuing real estate collateral securing mortgage loans.

CFPB Fines OneMain for Deceptive Sales Practices

Adam Witmer
Regulatory Update, UDAAP

On May 31, 2023, the CFPB has ordered installment lender OneMain Financial to pay $20 million in redress and penalties for failing to refund interest charged to 25,000 customers who cancelled purchases within a purported “full refund period,” and for deceiving borrowers about needing to purchase add-on products to receive a loan. According to the CFPB, OneMain pushed its employees to hit sales targets and illegally withheld funds.

CFPB: Overdraft/NSF Down Nearly 50% Versus Pre-Pandemic Levels

Adam Witmer
Regulatory Update

On May 24, 2023, the CFPB published a report providing an analysis of overdraft and NSF fees reported by banks with assets over $1 billion, which have been required to report OD/NSF fee revenue in Call Report data since 2015. Based on the report, data from the fourth quarter of 2022 data suggest over $5.5 billion reduction on an annual basis going forward but fees still totaled $7.7 billion in 2022.

CFPB Takes Action Against Citizens Bank for Unlawful Credit Card Servicing

Adam Witmer
Regulatory Update

On May 23, 2023, the CFPB reached a settlement to resolve allegations that Citizens Bank violated consumer financial protection laws and rules that protect individuals when they dispute credit card transactions. According to the CFPB, Citizens Bank failed to manage and respond to credit card disputes and fraud claims properly. The order would, among other things, impose a $9 million civil money penalty on Citizens Bank.

FinCEN and BIS Issue Alert for Potential Russian Export Control Evasion Attempts

Adam Witmer
Regulatory Update, BSA

On May 19, 2023, FinCEN and U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a joint alert urging financial institutions to be vigilant against efforts by individuals and entities to evade BIS export controls implemented in connection with Russia's further invasion of Ukraine. The supplemental joint alert provides financial institutions additional information regarding new BIS export control restrictions related to Russia, as well as reinforces ongoing U.S. Government engagements and initiatives designed to further constrain and prevent Russia from accessing needed technology and goods to supply and replenish its military and defense industrial base.

Governor Bowman’s Speech at the 2023 TBA Annual Convention

Adam Witmer
Regulatory Update

On May 19, 2023, Federal Reserve Board Governor Michelle W. Bowman was invited to speak at the Texas Bankers Association Annual Convention where she talked about the considerations for revisions to the bank regulatory framework. Bowman was a former banker, former state bank commissioner, and a member of the Federal Reserve Board. Governor Bowman’s speech centered on the critical role of bankers in facilitating a strong economy.

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