Firm News

On Wednesday, the U.S. District Court for the Southern District of Texas expanded the injunction it previously placed on the CFPB’s Section 1071 rule (“Rule”) so that it covers all banks, credit unions, fintechs and other lenders subject to the CFPB’s authority nationwide pending a decision in the Supreme Court case challenging the constitutionality of the CFPB’s funding mechanism. The original injunction, which was granted in July, applied only to members of the American Bankers Association, the Texas Bankers Association and Rio Bank of McAllen, Texas. Read More

On October 13, 2024 the California Governor signed A.B. 666, a bill prohibiting a broker or provider of commercial financing from charging certain fees in connection with a commercial financing transaction with a small business or small business owner. The prohibited fees are as follows:

1. A fee for accepting or processing a payment required by the terms of the commercial financing contract as an ACH transfer debit;

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A recent trend in consumer lawsuits has furnishers of credit reports under fire for Metro 2 code usage. The trend sees a consumer with a creative consumer advocate start by disputing a debt with a creditor or debt collector; the creditor or debt collector, as the furnisher, will then report an “XB” to the credit reporting agencies to indicate that the consumer has disputed the account information with the furnisher directly. Next, the creditor or debt collector will proceed with an investigation and report a code of “XH” at the conclusion of the investigation. The “XH” indicates that the account was previously in dispute and the furnisher has concluded the investigation. Read More

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