Rulemaking

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On September 8, 2026, the Internal Revenue Service (IRS) published final regulations implementing the interest deduction on loans for the purchase of specified vehicles assembled in the U.S. Taxpayers’ ability to deduct that interest comes with reporting and disclosure requirements for applicable lenders, similar to the requirements imposed on persons receiving mortgage loan interest. The final regulations become effective on November 9, 2026, and the deadline to provide interest statements to applicable taxpayers is January 31, 2027.

In 2025, Congress passed legislation providing the temporary ability to deduct up to $10,000 of interest paid on loans for the purchase of vehicles assembled in the U.S. That ability applies to indebtedness incurred after December 31, 2024, and continues through the taxable year ending December 31, 2028. The final regulations provide the following parameters for that interest deduction eligibility.

Continue Reading Lenders Must Report Interest on U.S. Auto Loans

The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have proposed new regulations under the Community Reinvestment Act (“CRA”). Since 2020, the banking agencies have proposed significant overhauls to the CRA regulations, but with little agreement on the actual changes. Comments on the latest attempt are due by October 13…

In January 2026, the New York State Department of Financial Services (“DFS”) adopted its regulations (the “Regulations”) implementing the provisions of the state’s Community Reinvestment Act covering non-bank, independent mortgage bankers, also known as independent mortgage bankers, licensed under the New York Licensed Mortgage Bankers Law (“Mortgage Bankers”). Because the federal Community Reinvestment Act only applies to insured depository institutions, some states, including Illinois, Massachusetts, and New York, have adopted similar laws and applied those laws to non-depository mortgage companies. The Regulations impose filing, self-testing, and self-assessment requirements on Mortgage Bankers; require DFS to evaluate Mortgage Bankers, including by testing their performance in meeting community credit needs; and implicate applications. The evaluation requirements are similar to those imposed on insured depository institutions under the federal Community Reinvestment Act and its implementing regulations.

While the Regulations became effective the same day of their publication—January 7, 2026—the compliance date is July 7, 2026.

Continue Reading New York State Department of Financial Services Adopts Regulations Implementing the Community Reinvestment Act Covering Mortgage Bankers

On October 1, 2025, the interagency final rule implementing quality control standards for automated valuation models (“AVMs”) became effective. The rule requires the adoption and maintenance of policies, practices, procedures, and control systems for the use of AVMs by mortgage originators in making credit decisions, and by secondary market issuers that use AVMs…

The Securities and Exchange Commission (SEC) has published a concept release inviting public comment on potential reforms to disclosure requirements for residential mortgage-backed securities (RMBS) in the registered asset-backed securities (ABS) market. The initiative aims to address longstanding concerns that current rules, particularly those under Item 1125 of Regulation AB, have stifled public issuance of…

Illinois continues to move forward in regulating “shared appreciation agreements.” On August 15, 2025, the Illinois Department of Financial and Professional Regulation proposed regulations implementing the Residential Mortgage License Act of 1987 to govern “shared appreciation agreements.” The term “shared appreciation agreements” is generally interpreted to include products commonly known as home equity contracts,” “home…

Consistent with expectations for lighter regulation under the Trump administration, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) indicated in a March 26, 2025 court filing that it intends to revoke an Interpretative Rule it issued in May 2024 that would regulate certain Buy Now, Pay Later (“BNPL”) products as credit cards for the purposes of the federal Truth in Lending Act (“TILA”).

As discussed in an earlier Mayer Brown blog post, the Bureau previously issued an Interpretative Rule clarifying that lenders who issue “digital user accounts” that allow consumers to access credit for retail purchases are considered “card issuers” who must comply with additional disclosure and substantive requirements under TILA and its implementing regulation, Regulation Z. Prior to the issuance of the CFPB’s Interpretive Rule, providers of what has become the “core” BNPL product in the US—a closed-end loan that does not bear a finance charge and is repayable in not more than four installments—generally took the position that their activities did not trigger Regulation Z compliance obligations. The Interpretive Rule, however, explained that certain Regulation Z requirements nevertheless apply where a credit card is involved, and characterized “digital user accounts” as credit cards.  The Interpretive Rule followed over three years of market research on the BNPL industry during which the CFPB determined that consumers often used BNPL as a substitute for conventional credit cards, and represented an attempt to close what it characterized as a regulatory loophole, notwithstanding various ways in which typical BNPL accounts differ materially from credit cards in the way in which consumers access credit.

Continue Reading CFPB Indicates That It Will Rescind Buy Now, Pay Later Interpretative Rule

Mayer Brown has published a new edition of Licensing Link, a periodic publication that will keep you informed on hot topics and new developments in state licensing laws, and provide practice tips and primers on important issues related to state licensing across the spectrum of asset classes and financial services activities.

In this issue, we…

On January 27, 2025, the Fifth Circuit Court of Appeals held that the Federal Trade Commission’s rule to curb certain practices in the automobile dealer industry was invalid on procedural grounds because the agency did not issue an advance notice of proposed rulemaking.

On January 4, 2024, the Federal Trade Commission (“FTC”) published a final “Combating Auto Retail Scams Trade Regulation Rule,” or “CARS Rule.” The rule was scheduled to become effective on July 30, 2024. The FTC issued that rule after publishing a proposed rule for public comment in July 2022 and after a series of public roundtables with input from industry participants, consumers, and others.

The final rule provides that certain acts or practices of motor vehicle dealers are prohibited as unfair or deceptive, including misrepresentations about the costs or terms of purchasing, financing, or leasing a vehicle or of any add-on product or service (such as extended warranties, service and maintenance plans, payment programs, guaranteed automobile or asset protection (“GAP”) agreements, emergency road service, VIN etching and other theft protection devices, or undercoating). The final rule also would prohibit misrepresentations regarding many other aspects of purchasing or financing a vehicle, or the circumstances under which a vehicle may be repossessed.

The final rule also provides that it is a prohibited unfair or deceptive act or practice not to disclose in advertisements or consumer communications a vehicle’s full cash offering price (excluding only government charges), or not to disclose that an add-on product or service is voluntary (if true). When making any representations about the amount of monthly payments for vehicle financing, the final rule provides that the dealer must disclose the total amount the consumer will pay after making all payments, including the amount of any down payment or trade-in.

As to add-on products or services, the final rule provides that it is a prohibited unfair or deceptive act or practice for a dealer to charge for any such product or service that provides no benefit to the consumer, including certain nitrogen-filled tire-related products or services; products or services that are merely duplicative of otherwise applicable warranty coverage; or any item without the consumer’s express, informed consent.

The auto dealer and finance industries quickly objected to the rule, arguing in part that the FTC did not adequately consider the costs of the rule and that the rule is arbitrary and capricious. The FTC then determined that it was in the interests of justice to stay the rule’s effective date to allow for judicial review.

The Fifth Circuit did not address the validity of the rule’s substantive provisions, or the FTC’s authority to declare those or other practices as unfair or deceptive. However, the court held that the final rule is invalid because the FTC did not issue an advance notice of proposed rulemaking (“ANPRM”) prior to issuing its proposed rule.

Continue Reading Fifth Circuit Vacates the FTC’s CARS Shopping Rule

The US Consumer Financial Protection Bureau is giving no-action letters a second chance. On January 8, 2025, the CFPB issued a policy statement setting forth new procedures for companies to request supervisory and enforcement relief through no-action letters. The policy statement was issued at the same time as a related policy statement setting forth procedures…