On July 22, a Texas-based lease-to-own company filed suit against the CFPB in Federal District Court for the Eastern District of Texas alleging that its “illegal and unconstitutional investigation” into the company’s business...more
On May 21, the Massachusetts Attorney General entered into an Assurance of Discontinuance (“AOD”) with a California-based fintech alleging that it was the “true lender” of its consumer installment loans. Under the terms of...more
On April 4, the CFPB published a new Issue Spotlight, titled “Banking in Video Games and Virtual Worlds” that analyzes the increased commercial activity within online video games and virtual worlds and the apparent risks to...more
4/8/2024
/ Consumer Financial Products ,
Consumer Financial Protection Bureau (CFPB) ,
Crypto Exchanges ,
Cryptoassets ,
Cybersecurity ,
FinTech ,
Games ,
In-Game Purchases ,
Online Marketplace ,
Privacy Laws ,
Rulemaking Process
On March 25, a coalition of trade groups filed suit in the United States District Court for the District of Colorado, challenging a Colorado law which would have opted the state Section 521 of the Depository Institutions...more
On January 30, a Tennessee-based community bank entered into a consent order with the Federal Deposit Insurance Corp. following the agency’s allegations that the Bank engaged in unsafe or unsound banking practices relating to...more
On January 12, South Dakota’s Division of Banking issued a mandate setting March 31, 2024 as the deadline for all South Dakota licensed money lenders and non-residential mortgage brokers to comply with their Bank Secrecy...more
2/19/2024
/ Anti-Money Laundering ,
Bank Secrecy Act ,
Banking Sector ,
BSA/AML ,
CFTC ,
Compliance ,
FDIC ,
Final Rules ,
Financial Services Industry ,
FinCEN ,
FinTech ,
NCUA ,
Non-Depository Institutions ,
OCC ,
OTS ,
Regulatory Agenda ,
Regulatory Requirements ,
Risk Assessment ,
Risk Management ,
Securities and Exchange Commission (SEC)
On January 29, a Missouri-based bank and its Kansas-based fintech loan servicer filed a joint motion to dismiss a purported class action filed against them alleging violations of the Georgia Installment Loan Act (GILA) and...more
More “true lender” laws are coming, as legislative bodies in Washington, Maryland, and the District of Columbia have introduced bills that would severely impact bank partnership arrangements.
If adopted, the “true...more
On January 23, the FTC entered into a settlement agreement with a cash-advance fintech app for $3 million over violations of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), and ECOA....more
1/29/2024
/ Bank Service Providers ,
Consumer Financial Products ,
Disclosure ,
ECOA ,
Enforcement Actions ,
Federal Trade Commission (FTC) ,
FinTech ,
FTC Act ,
Refunds ,
ROSCA ,
Settlement Agreements
On December 21, the Office of Inspector General (OIG) of the FDIC issued its audit memorandum on the FDIC’s Regional Service Provider (RSP) Examination Program. The OIG’s objective was to assess the effectiveness of the...more
On November 30, Washington D.C. introduced District of Columbia Council Bill B 25-0609, which would opt the state out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”) with...more
On October 9, Florida introduced SB 146, which amends the Florida Consumer Finance Act (CFA), and joins other states that have passed laws characterizing certain nonbanks as the “true lender” of loans made through a bank...more
On November 21, a Washington-based bank confirmed through a public filing that it entered into a consent order with the FDIC alleging that the bank engaged in unsafe or unsound banking practices, primarily related to products...more
On November 15, the CFPB issued an order requiring an Illinois-based fintech lender to pay $15 million in fines. The order additionally prohibits the company from operating in certain lines of business and requires revision...more
11/17/2023
/ Borrowers ,
Civil Monetary Penalty ,
Consumer Financial Protection Bureau (CFPB) ,
Enforcement Actions ,
Executive Compensation ,
Financial Regulatory Reform ,
Financial Services Industry ,
FinTech ,
Informed Consent ,
Lenders ,
Redress Payments ,
Short-Term Loans
On November 2, the FTC entered into a settlement agreement with a Manhattan-based fintech company for $18 million over alleged deceptively marketed cash advances to consumers and impeding customers’ ability to cancel...more
On October 30, the Superior Court of California County of Los Angeles denied the DFPI’s motion for a preliminary injunction to force a Chicago-based fintech company to stop facilitating loans to California borrowers from its...more
11/10/2023
/ Banks ,
Borrowers ,
California ,
Consumer Financial Products ,
Department of Financial Protection and Innovation (DFPI) ,
Financial Institutions ,
Financial Services Industry ,
FinTech ,
Interest Rates ,
Loans ,
Preliminary Injunctions ,
True Lender
On October 17, the CFPB took action against a nonbank fintech company for allegedly deceiving consumers about the speed and cost of remittance transfers through its mobile app. The Bureau also alleges that the company...more
The Federal Reserve Board recently issued two Supervision and Regulation Letters that provide guidance on the agency’s supervision of novel activities and the process such as fintech partnerships, crypto-related activities,...more
On January 11, 2023, a Texas federal court dismissed a class action lawsuit against a leading financial technology company alleging it violated Texas usury laws by charging interest on loans it made through a partnership with...more
In December, a Utah-based bank and its service provider entered into an assurance of discontinuance with the Iowa Attorney General and the Iowa Division of Banking, settling an investigation into allegedly usurious...more
The U.S. Department of the Treasury recently released a report titled “Assessing Impacts of New Entrant Non-bank Firms on Competition in Consumer Finance Markets,” a product of the Biden administration’s effort to assess...more
On September 7, Acting Comptroller of the Currency, Michael Hsu, discussed the long-term threats to trust in banking in remarks at the TCH + BPI Annual Conference. Hsu provided updates on key priorities at the OCC, including...more
9/16/2022
/ Banking Sector ,
Banks ,
BSA/AML ,
Comptroller ,
Cryptocurrency ,
FDIC ,
Federal Reserve ,
Financial Services Industry ,
FinTech ,
OCC ,
Risk Management
On August 10, the CFPB issued a consent order against a FinTech company for a faulty algorithm utilized in its personal finance management app that caused consumer accounts to overdraft and incur overdraft penalties....more
On June 3, a federal court filing in the Southern District of Florida by an Atlanta-based FinTech company revealed that the small business lender is under DOJ investigation for alleged PPP loan approval practices. According...more
7/29/2022
/ CARES Act ,
Coronavirus/COVID-19 ,
Department of Justice (DOJ) ,
Enforcement Actions ,
False Claims Act (FCA) ,
Financial Institutions ,
FinTech ,
Investigations ,
Loans ,
Paycheck Protection Program (PPP) ,
SBA
On May 4, the Connecticut Department of Banking issued a temporary cease and desist order directing a peer-to-peer lending platform that connected borrowers with third-party lenders to cease its lending-related activities on...more
6/8/2022
/ Borrowers ,
Cease and Desist Orders ,
Consumer Lenders ,
Consumers ,
Financial Services Industry ,
FinTech ,
Lending ,
Licenses ,
Loans ,
Peer-to-Peer ,
Popular ,
State and Local Government ,
Third Party Funding