Financial services providers, marketplace lenders and secondary market purchasers doing business in the state of New York can breathe at least a temporary sigh of relief this week. Controversial changes proposed to the state’s Licensed Lender Law included in a pair of companion budget bills were dropped when these bills were amended on Monday. Assembly Bill 3008 and Senate Bill 2008, as introduced in the legislature on January 23, 2017 would have expanded the scope of consumer and commercial loans, and types of business activities, subject to licensing by the New York Department of Financial Services (the “Department”) under the Licensed Lender Law. If enacted into law, these proposed amendments would have triggered new licensing obligations for companies doing business in the state, potentially reaching marketplace lenders, other Fintech companies and secondary market purchasers.
On November 17, 2016, the Consumer Financial Protection Bureau (CFPB) announced a request for information (RFI) to better understand the benefits and risks associated with market developments that rely on access to consumer financial records. The Bureau indicated that the information it obtains in response to its request may help shape industry best practices for delivering consumer benefits and minimizing consumer harm, and also could serve as a foundation for future CFPB guidance.
The Bureau’s RFI comes in the wake of the CFPB’s first report on its Project Catalyst and CFPB Director Cordray’s speech at the October 2016 Money 20/20 conference. During his remarks, the Director conveyed strong support for the ability of consumers to access their financial data and “grave concerns” about reports that financial institutions are seeking to limit such access. Although banks and other institutions have expressed privacy- and information security-related concerns about providing consumer financial information to third parties, Director Cordray emphasized the importance of consumers being able to obtain their information and suggested that the focus should be on ensuring that the information remains secure, rather than on limiting access. Continue Reading CFPB Enters the Fray: Agency Solicits Information About “Screen Scraping”