To help you keep abreast of relevant activities, below find a breakdown of some of the biggest events at the federal and state levels to impact the Consumer Finance Services industry this past week:

Federal Activities

State Activities

Federal Activities:

• On May 12, Federal Reserve Board Governor Phillip Jefferson spoke at the How to Get Back on Track: A Policy Conference at the Hoover Institution on the assessment of current monetary policy under the Biden administration. For more information, click here.
• On May 11, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra issued a statement on the Federal Deposit Insurance Corporation’s (FDIC) proposed special deposit insurance assessment on large banks. For more information, click here.
• On May 11, the FDIC board of directors approved a notice of proposed rulemaking, which would implement a special assessment to recover the cost associated with protecting uninsured depositors following the closures of two banks. The Federal Deposit Insurance Act requires the FDIC to take this action in connection with the systemic risk determination announced on March 12. For more information, click here.
• On May 10, the CFPB issued a new circular, affirming that a bank may violate federal law if it unilaterally reopens a deposit account to process transactions after a consumer already closed it. The CFPB observed in complaints that even after a consumer completed all the required steps to close an account, their bank “reopened” the closed account and assessed overdraft and nonsufficient funds fees. Consumers reported to the CFPB that financial institutions also charged account maintenance fees upon reopening, even if the consumer was not required to pay account maintenance fees prior to account closure. For more information, click here.
• On May 10, the House Financial Services Committee Member Bill Foster (D-IL) argued that crypto trading cannot be controlled without establishing federally regulated “traceable digital identities” for all wallets and users. For more information, click here.
• On May 10, the Federal Housing Finance Agency (FHFA) announced that it rescinded the upfront fees based on borrowers’ DTI ratios for loans acquired by Fannie Mae and Freddie Mac. FHFA announced that it would delay implementation to engage with industry stakeholders and better understand their concerns. For more information, click here.
• On May 9, CFPB General Counsel and Senior Advisor to the Director Seth Frotman spoke at the Innovative Payments Association, where he discussed the growing use of noncash payments. For more information, click here.
• On May 8, the Federal Trade Commission (FTC) announced that it stopped a pair of student loan debt relief schemes that bilked students out of approximately $12 million by using deceptive claims about nonexistent repayment programs and loan forgiveness. The FTC also said the companies falsely claimed to be or be affiliated with the Department of Education and told students that the illegal payments the companies collected would count toward their loans. For more information, click here.
• On May 8, the Biden administration announced its plan to write new regulations, requiring airlines to compensate travelers and pay for their meals and hotel rooms when they become stranded for reasons within the airlines’ control. Airlines must make these concessions for travelers in addition to providing ticket refunds. Despite receiving $54 billion in federal aid when the pandemic hit, airlines still encourage workers to quit or retire early. The airlines, however, added a considerable number of workers and now exceed the number of pre-pandemic employees by 5%. The number of canceled flights declined in 2023, but delays are longer and more common than before. The U.S. Department of Transportation will be tasked with drafting the new rules, but there is no indication of when the rules may be completed. For more information, click here.
• On May 8, the CFPB issued a blog on medical debt, stating that nearly one in five households in the United States reported having some form of overdue medical debt. Debt collectors contact patients and their families about medical bills more than any other type of debt, commonly resulting in negative information appearing on credit records. For more information, click here.

State Activities:

• On May 12, California Attorney General Rob Bonta announced the felony conviction of a former mortgage investment company president who reportedly engaged in a mortgage investment scheme, leading to a combined loss of over $7 million. Victims of the schemer were elderly individuals and individuals experiencing economic distress who sought mortgage relief from a company called Grand View Financial LLC. Company operators allegedly conspired to steal money from distressed homeowners, promising consumers that by transferring title to their homes and paying money, the company would eliminate the mortgage lien and deed the property back to the homeowner free of any liens. The company, however, did nothing to eliminate the liens, which led every victim losing his/her home. For more information, click here.
• On May 11, Tennessee Governor Bill Lee signed HB 1181 to enact the Tennessee Information Protection Act. For more information, click here.
• On May 10, New York Attorney General Letitia James announced that the AG’s office secured $615,000 from three companies accused of falsifying comments to influence a proceeding by the Federal Communications Commission (FCC) involving the repeal of net neutrality rules. Net neutrality prevents broadband providers from blocking, slowing down, or charging companies to prioritize certain content on the internet. According to the AG’s investigation, the companies used the identities of millions of consumers without their consent to generate comments that provided “cover” for the FCC to repeal net neutrality rules. These tactics reportedly led to more than 8.5 million fake comments impersonating real consumers being submitted to the FCC and more than half a million fake letters being sent to Congress. This agreement is the second series of agreements secured by the AG with companies accused of supplying fake comments to the FCC. For more information, click here.
• On May 9, New York State Department of Financial Services Superintendent Adrienne A. Harris released proposed guidance for banking organizations and nondepository financial institutions chartered or licensed under the New York Banking Law, notifying them that they must update their framework for the review and assessment of the character and fitness of their directors, senior officers, and managers, both upon onboarding and on an ongoing basis. For more information, click here.
• On May 8, Maryland Governor Wes Moore signed HB 913 to amend certain provisions relating to student financing company registration and reporting requirements. The act defines the term “student financing company” to mean “an entity engaged in the business of securing, making, or extending student financing products, or any purchaser, assignee, or holder of student financing products.” Student financing companies seeking to provide services in the state must register with the commissioner of financial regulation beginning March 15, 2024. For more information, click here.
• On May 8, Maryland Governor Wes Moore signed HB 686, which eliminates the requirement that collection agencies and certain nondepository financial institutions maintain separate licenses for branch locations, while allowing them to conduct business at multiple licensed locations under a single license. For more information, click here.
• On May 5, Oklahoma Governor Kevin Stitt recently signed SB 794, which increases the maximum loan finance charge for certain loans. For more information, click here.
• On May 4, Indiana Governor Erick Holcomb signed SB 452, amending a provision to require the Department of Financial Institutions to adopt emergency rules no later than June 30, 2024 to authorize certain licensees to sponsor one or more mortgage loan originators who are not employees of the sponsoring person to perform mortgage loan originator activities. For more information, click here.
• On May 4, Indiana Governor Erick Holcomb signed SB 458, which repeals current Indiana code, governing the licensing and regulation of money transmitters by the Department of Financial Institutions. For more information, click here.
• On May 1, New York State Department of Financial Services issued a consent order against a cryptocurrency trading platform for engaging in alleged violations of the state’s cybersecurity regulation. For more information, click here.