Year: 2023

The Consumer Financial Protection Bureau and the U.S. Department of Justice have issued a joint statement to remind financial institutions that the Equal Credit Opportunity Act (“ECOA”) prohibits discrimination based on national origin, race, and other covered characteristics, regardless of the immigration status of the credit applicant. Read More

The Consumer Financial Protection Bureau (CFPB) released additional guidance in an Advisory Opinion regarding Section 1034(c) of the Consumer Financial Protection Act (CFPA) on October 11, 2023. Read More

The Connecticut Banking Department has issued guidance on the recent amendments to the Connecticut Small Loan Lending and Related Activities Act under P.A. 23-126. See our ALERT of April 28, 2023. Read More

Since California and New York passed disclosure requirements for commercial financing in 2021, similar laws have been introduced and enacted in several state legislatures.Read More

Consumer-like protections continue to invade business finance. The latest example is a new rule expanding the California Department of Financial Protection and Innovation’s authority to regulate unfair, deceptive and abusive acts and practices (“UDAAP”) in “commercial financing transactions”, defined to mean consummated commercial financing transactions for which California disclosures are required. Read More

In the absence of federal action, states keep marching forward with their own comprehensive consumer data privacy laws with mixed results. Oregon joins California, Colorado, Connecticut,
Indiana, Iowa, Montana, Tennessee, Texas, Utah and Virginia in enacting a non-uniform privacy law. See S.B. 619 (signed by governor July 18, 2023, effective July 1, 2024).Read More

The Federal Deposit Insurance Corporation (FDIC) has issued a cease and desist letter to Unbanked, Inc. concerning potential violations of Section 18(a)(4) of the Federal Deposit Insurance Ac (12 U.S.C. § 1828(a)(4)) for deceptive statements suggesting that various crypto-related products may be covered by FDIC deposit insurance. Unbanked, a nonbank, maintains relationships with insured banks.Read More

The U.S. District Court for the Southern District of Texas has ruled on a motion for preliminary injunction, granting an injunction to members of two trade groups and a private bank that filed suit challenging the Consumer Financial Protection Bureau’s (CFPB) final rule implementing the “Small Business Lending Rule Under the Equal
Opportunity Act (Regulation B)” pursuant to Section 1071 of the Consumer Financial Protection Act (“Rule”). See Texas Bankers Association vs. CFPB, No. 7:23-cv-00144 (S.D. Tex., order filed July 31, 2023); see our Alerts of Mar. 28 and Apr. 28, 2023. The plaintiffs had sought a nationwide preliminary injunction to prevent the CFPB from enforcing the Rule. The Rule requires banks and nonbanks to collect and report information about small business credit applications. Read More

A federal judge has delivered a split-decision on the Ripple Labs XRP token, providing some mixed clarity on the question of whether digital tokens are or can be securities. SEC v. Ripple Labs, Inc., No. 1:20-cv-10832-AT-SN (S.D. N.Y., filed July 13, 2023). Judge Torres concluded that an XRP token is a security when sold by Ripple directly to sophisticated institutional investors capable of understanding that such tokens are “speculative value propositions,” meeting the test for an “investment contract,” but not a security when sold to “programmatic investors” (the broader public) on secondary markets (digital asset exchanges). Judge Torres noted that many statements cited by the Securities Exchange Commission (“SEC”) may not have been shared with the general public who might not know whether they were buying from Ripple or third parties in an even (bid/ask) exchange. (Additional XRP were distributed in various contexts for goods or services or as funding for initiatives.) Read More

On June 26, 2023, Florida Governor Ron DeSantis vetoed HB 1267, which would have amended the Consumer Finance Act to allow licensed lenders to charge a greater rate of interest on consumer loans, among other changes. See our ALERT of May 26, 2023. In his veto transmittal letter, Governor DeSantis stated that while the bill included provisions modernizing the licensing process and increasing transparency requirements, the increase in the interest rate for loans of $25,000 or less caused him concern, as he believes the increase in rates “may result in additional consumer indebtedness and could exacerbate the pinch already being felt due to federal government-induced inflation.” In vetoing the bill, the Governor leaves the old tiered rate caps in place. Read More