Firm Alerts

In response to a written request by the Small Business Finance Association, the Consumer Financial Protection Bureau published a notice of intent to make a preemption determination regarding whether the Truth in Lending Act preempts the New York Commercial Finance Disclosure Law with respect to certain provisions. See our Alerts dated Sept. 29, 2022 and Dec. 14, 2020 for our discussion of the New York law. The CFPB also provided notice that it is considering whether to make a preemption determination regarding state laws in California, Utah and Virginia that are potentially similar to the...

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. TILA establishes special appraisal requirements for “higher-priced mortgage loans.” The...

The Federal Trade Commission (“FTC”) issued a notice of advanced public rulemaking on so-called “junk fees.” The notice is an early step in the administrative process for drafting a regulation. The FTC is seeking public comments on twenty-one separate questions on various practices relating to the advertisement and disclosure of fees, competition on fees, the extent the fees cover a value-added, consumer perception of fees and how to best write a precise rule governing fees. Read More

Members of Alloy Labs Alliance, a consortium of midsized and community banks, released its “playbook” for “Banking as a Service” (“BaaS”) relationships between depositary institutions and non-bank financial technology firms. Drafted in partnership with leading technology providers, the Alloy Labs Playbook seeks to establish industry standards and a common vocabulary of buzzwords and common terms. The BaaS business model focuses primarily on banking services other than lending and has been around for over a decade. However, the BaaS industry is still evolving rapidly. Read More

The California Department of Financial Protection and Innovation (“DFPI”) plans to start issuing conditional licenses on January 1, 2023 to debt collectors that have applied under the state’s Debt Collection Licensing Act (“DCLA”). The DFPI also plans to end the regulatory safe harbor allowing debt collectors that have applied for a license to continue to collect consumer debt in California at the same time. Read More

On October 18, 2022, the New York Department of Financialb Services (the “Department”) announced that it entered into a consent order with EyeMed Vision Care LLC for alleged violations of New York’s Cybersecurity Regulation related to a cybersecurity event. EyeMed is licensed to sell life, accident and health insurance in New York by the Department and subject to oversight by the Department. Read More

On December 9, 2022, certain provisions of the updated FTC Safeguards Rule will take effect. The provisions of the updated Safeguards Rule mentioned below were adopted in December of 2021 but are not effective until December 9, 2022, to allow time for compliance. The Safeguards Rule is applicable to “financial institutions,” which include non-bank financial institutions like non-bank lenders and companies acting as a finder along with other entities engaged in activities financial in nature or incidental to such financial activities. Read More

The New York Department of Financial Services released revised regulations implementing the Commercial Finance Disclosure Law. These regulations set forth the precise formatting and calculation methods providers must use to make commercial financing offers in amounts under $2.5 million. This version was released after 18 comments were submitted to the Department during the public comment period. The revised regulations propose several key changes and clarifications. Read More

On August 29, 2022, Blue Ridge Bank (“Bank”), which has $2.8 billion in assets, entered into a formal written agreement with the Office of the Comptroller of the Currency (“OCC”) regarding the Bank’s oversight of its fintech partners. The OCC found unsafe and unsound practices relating to Bank oversight of third-party risk, Bank Secrecy Act/Anti-Money Laundering risk management, suspicious activity reporting and information technology control and risk governance.

The entire Eleventh Circuit Court of Appeals reheard Hunstein v. Preferred Collection and Management Services and reversed the previous panel holding. The entire Eleventh Circuit now holds (8 to 4) that plaintiff Hunstein failed to allege a concrete harm that would provide Article III standing to pursue his claims in federal court. Previously, a three-judge panel of the Eleventh Circuit previously found Hunstein had standing to sue, which spawned thousands of copycat cases across the country. See our ALERT dated Nov. 18, 2021. This case does not address the underlying substantive question of...