Category: Bureau of Consumer Financial Protection (CFPB)

1
COVID-19: Credit Reporting in the Age of COVID-19
2
COVID-19: Impact on Consumer Financial Service Providers
3
The CFPB and the Fed Adjust Regulation CC for Inflation
4
California Continues Its Role as a Privacy Vanguard: California Consumer Privacy Act Of 2018
5
CFPB Left with Rulemaking to Modify or Delay Payday Rule
6
Another Shot at the Target: CFPB Payday Loan Rule Faces New Challenge from Trade Groups
7
SAVED BY THE EN BANC: CFPB Appears Here To Stay
8
Back from the Dead: The D.C. Circuit Breaths Life Into RESPA Section 8 Safe Harbor
9
Payday Loan Rule To Be Officially Reconsidered
10
Payday Loan Rule Is Officially A Go—Or Is It?

COVID-19: Impact on Consumer Financial Service Providers

A Summary of Federal and State Statutes, Rules and Orders

By David E. FialkowBrian M. Forbes, and Jeffrey S. Patterson

The coronavirus (“COVID-19”) pandemic has been and will continue to be a major business disrupter that will have a substantial impact on the consumer financial services industry in the weeks and months to come. Notably, federal, state and local governments and agencies are acting swiftly and changing the rules by which consumer financial services companies are to do business in the short and long term. K&L Gates LLP (“K&L Gates”) has developed a COVID-19 Task Force to closely monitor these developments and is tracking them in several jurisdictions across the firm’s footprint. Below is a summary, current as of March 30, 2020, of key new and proposed statutes, rules, and orders that are likely to impact consumer financial services companies. Keeping track of these almost daily developments to foreclosure, eviction, debt collection, student loans and other business lines, which vary state to state, is critical for consumer financial services companies to respond to their customers. As with previous nationwide crises, how these companies implement and apply these changes will have a substantial impact on post-pandemic compliance, litigation, and risks. K&L Gates has team members assigned to each of the states listed below who are able to help answer your questions and help companies address ongoing issues associated with the pandemic. Please click on a jurisdiction below for more information:

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The CFPB and the Fed Adjust Regulation CC for Inflation

By John ReVeal and Daniel S. Cohen

On June 24, 2019, the Consumer Financial Protection Bureau (“CFPB”) and the Federal Reserve Board (“Fed”) (collectively, the “Agencies”) amended Regulation CC, which implements the Expedited Funds Availability Act (the “EFAA”), to adjust for inflation the amount of funds depository institutions must make available to their customers after funds have been deposited and the civil liabilities for failing to meet these obligations (the “Amendment”).  However, depository institutions will not need to adjust their compliance procedures right away.  To “help ensure that institutions have sufficient time to implement the adjustments,” the Agencies set July 1, 2020 as the compliance deadline. Below is a summary of the key funds availability rules and how they are changed (or not) by the Amendment. 

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California Continues Its Role as a Privacy Vanguard: California Consumer Privacy Act Of 2018

By Julia B. Jacobson, Jeffrey S. King, Alidad Vakili                   

On June 28, 2018, California Governor Jerry Brown signed into law the California Consumer Privacy Act of 2018 (“CCPA”).[2] CCPA grants new privacy rights to Californian residents and applies a notice and consent framework to most businesses operating in California that collect personal information from those residents.

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CFPB Left with Rulemaking to Modify or Delay Payday Rule

By: Jennifer Janeira Nagle, Robert W. Sparkes, Scott B. Hefferman

On Tuesday, June 12, 2018, a Texas federal judge denied a joint request from the Consumer Financial Protection Bureau (“CFPB”) and two payday-lending trade groups to stay the August 2019 deadline for industry compliance with the Payday Loan Rule (the “Rule”). The decision was issued in Community Financial Services Association of America, Ltd., v. Consumer Financial Protection Bureau, No. 1:18-cv-295-LY, an action that was filed in April 2018 by the trade groups against the CFPB, seeking to invalidate the Rule as arbitrary and capricious in violation of the Administrative Procedures Act (“APA”), among other things.  (For more about the litigation, click here.)  In late May 2018, the plaintiff trade groups and the defendant CFPB jointly asked the Court to stay the Rule’s compliance deadline, but the Court’s decision Tuesday quickly and summarily rejected that request.  The Court stayed only the litigation, leaving August 2019 as the operative date for industry participants to comply with the Rule.

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Another Shot at the Target: CFPB Payday Loan Rule Faces New Challenge from Trade Groups

By Jennifer Janeira Nagle, Robert W. Sparkes, III, Hayley Trahan-Liptak

The Consumer Financial Protection Bureau’s Payday Loan Rule (the “Rule”), with a looming compliance deadline in August 2019, is facing yet another attack—this time from trade groups seeking relief directly from the courts. On April 9, 2018, two payday lending industry trade associations — the Community Financial Services Association of America, Ltd. and the Consumer Services Alliance of Texas — filed suit in the U.S. District Court for the Western District of Texas against the Consumer Financial Protection Bureau (“CFPB”) and its Acting Director, Mick Mulvaney, seeking an order enjoining and setting aside the Rule.

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SAVED BY THE EN BANC: CFPB Appears Here To Stay

By Andrew C. Glass, Daniel F. C. Crowley, Jennifer Janeira Nagle, Brandon R. Dillman   

The Consumer Financial Protection Bureau (“CFPB” or “Bureau”) has been an agency under fire. Acting Director Mick Mulvaney has begun to institute significant changes at the Bureau. And last year, a panel of the D.C. Circuit Court of Appeals held that the Bureau’s leadership structure – a single director who can be removed only for cause – violates the separation of powers requirement of Article II of the U.S. Constitution. But in a long awaited en banc decision, the D.C. Circuit reversed that panel’s decision. Rather, in PHH Corp. v. Consumer Financial Protection Bureau, the court held that the Bureau’s structure is consistent with separation of powers principles. As discussed below, businesses subject to the CFPB’s supervisory and enforcement authority will need to continue to remain vigilant.

To read the full alert, click here.       

Back from the Dead: The D.C. Circuit Breaths Life Into RESPA Section 8 Safe Harbor

By Brian M. ForbesDavid D. Christensen and Matthew N. Lowe

Through its recent en banc decision in PHH Corp. v. Consumer Financial Protection Bureau, the D.C. Circuit reinstated the holding of the three-judge panel regarding the safe harbor provision in Section 8(c) of the Real Estate Settlement Procedures Act (RESPA). Specifically, the court reaffirmed that under Section 8(c), payments made by one settlement service provider to another do not violate Section 8(a), even if made in connection with a captive relationship or a referral, when the payments are reasonably related to the market value of the goods, services, or facilities provided. Although potentially overshadowed by the portion of the en banc court’s holding that the leadership structure of the Consumer Financial Protection Bureau (CFPB) is constitutional, the panel court’s reinstated holding regarding RESPA’s Section 8(c) safe harbor is notable and important for the simple confirmation that the safe harbor “is what it is.”

To read the full alert, click here.

Payday Loan Rule Is Officially A Go—Or Is It?

By Jennifer Janeira Nagle and  Robert W. Sparkes III

Today, January 16, 2018, officially marks the effective date of the Consumer Financial Protection Bureau’s final rule targeting what it refers to as “payday debt traps” (the “Rule”).  As outlined in our previous publications (found here and here), the Rule marks a significant change in the landscape for lenders offering short-term loans or longer-term loans with balloon payments, including payday and vehicle title loans.  Looming large is the new requirement that lenders determine a borrower’s ability to repay prior to originating covered loans.

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