Troutman Pepper Weekly Consumer Financial Services Newsletter - August 2024

To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week:

Federal Activities

State Activities

Federal Activities:

• On August 2, the Consumer Financial Protection Bureau (CFPB), along with several other federal financial regulatory agencies, announced a proposed rule to establish data standards for certain information collections submitted to financial regulatory agencies. The proposal aims to promote the interoperability of financial regulatory data across the agencies by establishing data standards for identifiers of legal entities and other common identifiers. For more information, click here.
• On August 1, CFPB Director Rohit Chopra issued remarks at the public meeting of the strike force on unfair and illegal pricing. For more information, click here.
• On July 31, U.S. Senator Cynthia Lummis (R-WY) announced the introduction of the Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act. The BITCOIN Act establishes a strategic Bitcoin reserve to serve as an additional store of value to bolster America’s balance sheet and to ensure the federal government’s transparent management of Bitcoin holdings. For more information, click here.
• On July 31, the Bank of International Settlements (BIS) and the Bank of England announced Project Pyxtrial, a collaborative initiative aimed at exploring how technology solutions can enable the monitoring of asset-backed stablecoins’ balance sheets, providing insight into whether the backing assets always exceed their liabilities. For more information, click here.
• On July 30, the Federal Deposit Insurance Corporation (FDIC) Board of Directors approved a notice of proposed rulemaking to strengthen the important prudential protections of the agency’s safety and soundness rule on brokered deposits (12 CFR 337.6) that implements Section 29 of the Federal Deposit Insurance Act. Based on the FDIC’s experience since the adoption of the 2020 final rule and the large bank failures in 2023, the proposed revisions seek to strengthen the safety and soundness of the banking system, help ensure uniform and consistent reporting of brokered deposits, and reduce operational challenges and reporting burdens on insured depository institutions (IDIs). For more information, click here.
• On July 30, the FDIC approved a notice of proposed rulemaking to amend Part 354 of the FDIC Rules and Regulations governing parent companies of industrial banks and industrial loan companies. The proposed amendments would revise Part 354 to clarify and enhance the agency’s framework to supervise industrial banks, mitigate risks to the Deposit Insurance Fund, and provide necessary transparency for market participants. For more information, click here.
• On July 30, the FDIC approved a request for information (RFI) soliciting the public’s comments on deposit data that is not currently reported in the Call Report or other regulatory reports, including for uninsured deposits. For more information, click here.
• On July 30, the FDIC approved revisions to regulations under Section 19 of the Federal Deposit Insurance (FDI) Act to conform to the Fair Hiring in Banking Act (FHBA), which became effective on December 23, 2022. For more information, click here.
• On July 30, Acting Comptroller of the Currency Michael J. Hsu issued statements at the FDIC board meeting regarding proposed rulemakings on bank liquidity and bank ownership, and provided final guidance on bank resolvability. For more information, click here.
• On July 30, the Securities Commission of the Bahamas announced that the Digital Assets and Registered Exchanges Act (DARE) of 2024 has been passed into law by the Parliament of the Bahamas. Key highlights of the DARE Act include, but are not limited to, enhanced consumer protection obligations imposed on digital asset exchanges. For more information, click here.
• On July 29, the CFPB submitted a brief to move its credit card late fee case from the U.S. District Court for the Northern District of Texas to the U.S. District Court for the District of Columbia. For more information, click here.
• On July 25, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the FDIC released an RFI regarding arrangements in which one or more fintech companies, as defined in the RFI, engage with banks to distribute banking products and services to consumers and businesses (referred to as bank-fintech arrangements). For more information, click here.
• Last week, the Board of Governors of the Federal Reserve System, the FDIC, the National Credit Union Administration, and the OCC issued a joint statement announcing their own notice of proposed rulemaking for their supervised institutions. The purpose of the proposed rulemaking is to align the agencies’ respective AML/CFT program rules with FinCEN’s proposed revisions, ensuring a unified standard for compliance. On June 28, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed significant amendments to the anti-money laundering and countering the financing of terrorism (AML/CFT) program requirements for financial institutions subject to the Bank Secrecy Act (BSA). For more information, click here.

State Activities:

• On August 1, New York Attorney General (AG) Letitia James issued two advanced notices of proposed rulemaking related to two recently enacted laws pertaining to children’s online safety — the SAFE for Kids Act and Child Data Protection Act. The two bills were enacted to address the rising mental health crisis impacting children, the tracking and selling of private information, and poor sleep quality concerns due to children’s excessive social media usage. The proposed rulemaking notices seek input from parents, children, advocates, stakeholders, social media companies, and tech industry professionals regarding the rules that the AG is required to generate under the new laws. The comment period will close on September 30. For more information, click here.
• On July 31, Pennsylvania AG Michelle Henry announced a new platform for consumers to file complaints related to hardships with airline travel. The new complaint form addresses airline-related issues, ranging from flight delays and cancellations to issues with boarding. The new form is a response to an increase in consumer complaints nationwide related to air travel. According to Henry, this form “is a part of an ongoing initiative with federal partners to hold airlines and agents accountable when they mistreat consumers.” Consumers can report concerns using the new form whether they purchased tickets directly from an airline, or through a third party. For more information, click here.