On June 6, 2023, the CFPB released an issue spotlight that examines the use of chatbots in the banking industry. The spotlight specifically focuses on the use of artificial intelligence (AI) chatbots and the potential risks of violating the regulations when customer needs are not met.

Jun 12
Jun 12 PAVE Task Force Takes Action to Address Appraisal Bias

Adam Witmer

Appraisals, Regulatory Update

On June 1, 2023, the Biden-Harris Administration’s PAVE Task Force announced a new set of actions to address appraisal bias in the housing market. The Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) was created in June 2021 by President Biden, with the aim of rooting out bias in the home appraisal process.

Jun 8
Jun 8 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.

Jun 5
Jun 5 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.

Jun 5
Jun 5 CFPB Warns Consumers That Funds on Payment Apps May Be Unsafe

Adam Witmer

Regulatory Update

On June 1, 2023, the CFPB published an issue spotlight on digital payment apps heavily used by consumers and businesses. The CFPB also issued a consumer advisory for customers holding funds in these apps and how they can make sure their funds remain safe.

Jun 2

Jun 2 VIDEO: How to Identify Covered Borrowers Under MLA

Adam Witmer

MLA

In this Compliance Clip (video), Adam discusses how to identify covered borrowers under the Military Lending Act (MLA). MLA provides special protections for active duty servicemembers like capping interest rates on many loan products. In particular, Adam talks about the two safe harbors that the regulation provided in determining a covered borrower.

Jun 1
Jun 1 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.

May 29
May 29 OCC Revises Bank Enforcement Actions and Related Matters Manual

Adam Witmer

Regulatory Update

On May 25, 2023, the OCC released a revised Policies and Procedures Manual (PPM) for bank enforcement actions and related matters. The revised version of the manual, particularly PPM 5310-3, replaces the version issued on November 13, 2018.

May 29
May 29 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.

May 24
May 24 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.

Jun 13
Jun 13 CFPB Issues Spotlight Regarding Use of AI Chatbots in Banking

Jun 12
Jun 12 PAVE Task Force Takes Action to Address Appraisal Bias

Jun 8
Jun 8 FTC Submits Annual Report on TILA, CLA, and EFTA Enforcement

Jun 5
Jun 5 Agencies Propose Rule on AVMs Quality Control Standards

Jun 5
Jun 5 CFPB Warns Consumers That Funds on Payment Apps May Be Unsafe

Jun 2 VIDEO: How to Identify Covered Borrowers Under MLA

Jun 1
Jun 1 CFPB Fines OneMain for Deceptive Sales Practices

May 29
May 29 OCC Revises Bank Enforcement Actions and Related Matters Manual

May 29
May 29 CFPB: Overdraft/NSF Down Nearly 50% Versus Pre-Pandemic Levels

May 24
May 24 CFPB Takes Action Against Citizens Bank for Unlawful Credit Card Servicing

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