On February 9, 2024, the California Court of Appeal reversed a trial court judgment that had stayed enforcement of the most recent California Consumer Privacy Act (CCPA) regulations. The decision makes the CCPA regulations that had previously been stayed by court order until March 29, 2024 become immediately effective. The regulations implement the California Privacy Rights Act of 2020 (“CPRA”), passed in 2020 and effective January 1, 2023. Read More
Firm News
U.S. Supreme Court Hears Oral Arguments In Cases Challenging Chevron Deference
On January 17, 2024, the U.S. Supreme Court heard oral arguments in a pair of cases seeking to challenge the Chevron doctrine. The Chevron doctrine refers to the judicial deference given to administrative actions based on the 1984 case of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 468 U.S. 837 (1984). Under Chevron, the Court set forth a legal test as to when the court should defer to an agency’s interpretation, providing that judicial deference is appropriate where the agency’s interpretation was not unreasonable, so long as Congress had not spoken directly to the precise question. Read More
Colorado AG Enters Into Agreement With Collector Over Collecting Tribal Loans
The Colorado Attorney General entered into an Order and Assurance of Discontinuance with TrueAccord, a licensed debt collector, in regard to the collection of loans made by unlicensed entities associated with Native American tribes with finance charges that exceeded the rate permitted for unlicensed entities under the Colorado Uniform Consumer Credit Code (“UCCC”). Read More
Senate Fails To Override President’s Veto Of Small Business Data Lending Rule Resolution
The Senate failed to override President Biden’s veto of the joint Congressional resolution of disapproval of the CFPB’s Section 1071 rule (“Rule”). The Rule, known as 1071 for its section in the DoddFrank Act, is currently on hold pending the outcome of a Supreme Court case challenging the constitutionality of the CFPB’s funding based on decisions in Texas and Kentucky. Read More
Dollar Adjustments to Regulations Z and M
The Dodd-Frank Act amended The Truth in Lending Act (TILA) by requiring that the dollar threshold for exempt consumer credit transactions be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the exemption threshold from the prior year is not adjusted. The Dodd-Frank Act requires similar adjustments in the Consumer Leasing Act’s threshold for exempt consumer leases. Read More
How Is Your Company Incorporating AI?
While traditional artificial intelligence (“AI”) has been used by the financial services industry for years, the use of generative AI has become a hot topic. Generative AI is a newer form of AI that has the ability to produce original content, including text, images or other media. Many companies utilize and implement AI, both traditional and generative, in their business practices, including financial services and payment services companies like Stripe, Block (formerly known as Square), Brex, Klarna and the Commonwealth Bank of Australia. Read More
CFPB Proposes Oversight Of Digital Wallets And Payment Apps
The Consumer Financial Protection Bureau (“CFPB”) released a proposed rule to define a market for general-use digital consumer payment applications under its authority to supervise “larger participants” of a market for consumer financial products or services as defined by rule. Under the Proposed Rule the proposed market would cover providers of funds transfer and wallet functionalities through digital applications for consumers’ general use in making payments to other persons for personal, family or household purposes. Read More
NYC Proposes Amendments to Debt Collector Rules
In response to Industry feedback, the Consumer Financial Protection Bureau debt collection rules released in 2020 and comments on the prior Notice of Proposed Rulemaking in 2022, the New York City (“NYC”) Department of Consumer and Worker Protection (“DCWP”) has proposed new amendments to the city’s Debt Collector Rules. Read More
Indiana Court Rules That Silence and Inaction Does Not Effect Arbitration Addendum Assent
On October 24, 2023, the Supreme Court of Indiana ruled on a case involving a consumer’s acceptance of a credit union’s (“CU”) arbitration addendum. Land v. IU Credit Union, ___ N.E.3d ___, 2023 WL 6985790 (Ind., Oct. 24, 2023). The case focused on two key facts: (i) whether notice to the consumer of an arbitration addendum was reasonable and valid and (ii) whether the consumer’s silence and inaction amounted to assent to the arbitration addendum. The subject of the lawsuit is a proposed 2019 addendum to an agreement between a CU and its consumer. The addendum was provided to the consumer via email and U.S. postal mail, proposing the following amendments: (i) that either party may require arbitration for disputes regardless of the other party’s consent and (ii) that the consumer is prohibited from initiating or joining in a class action lawsuit. Read More
FTC Approves Amendment to Safeguards Rule
The Federal Trade Commission (“FTC”) has announced new amendments to the Safeguards Rule to go into effect 180 days after publication in the Federal Register. Over the last few years we have reported on amendments to the Safeguards Rule. See, e.g. our Alerts dated Nov. 17, 2021 and Oct. 5, 2022. Notably in 2021 the FTC amended the Safeguards Rule to, among other things, expand the definition of “financial institution” to include entities engaged in activities the Federal Reserve Board determines to be incidental to financial activities, which adds “finders”—companies that bring together buyers and sellers of a product or service—within the scope of the Rule. The 2021 amendments also added provisions to provide more guidance on how to develop and implement aspects of an information security program, such as access controls, authentication and encryption. Most of the 2021 amendments went into effect in December 2022. Read More