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
Rulemaking
New Disclosure and Other Requirements for Shared Appreciation Agreements Take Effect in Maryland
By Holly Spencer Bunting on
Maryland regulations governing “shared appreciation agreements” become effective November 25, 2024. After the Maryland Commissioner of Financial Regulation proposed regulations governing required disclosures for shared appreciation agreements in July 2024, the regulations were finalized on October 30, 2024, with no substantive revisions.
As a reminder, a “shared appreciation agreement” is defined for purposes of Maryland’s Credit Grantor mortgage laws as “a writing evidencing a transaction or any option, future, or any other derivative between a person and a consumer where the consumer receives money or any other item of value in exchange for an interest or future interest in a dwelling or residential real estate, or a future obligation to repay a sum on the occurrence of an event such as: (1) the transfer of ownership; (2) a repayment maturity date; (3) the death of the consumer; or (4) any other event contemplated by the writing.”
Below is a summary of the final regulations governing shared appreciation agreements. Continue Reading New Disclosure and Other Requirements for Shared Appreciation Agreements Take Effect in Maryland
CFPB Interpretive Rule Exposes Some BNPL Programs to Credit Card Requirements
On May 22, the Consumer Financial Protection Bureau (“CFPB”) issued an interpretive rule purportedly clarifying the breadth of the term “credit card” for Truth in Lending Act (“TILA”)/Regulation Z purposes in the buy-now/pay-later (“BNPL”) context (the “Interpretive Rule”). The clarification asserts that “digital user accounts” that permit consumers to access credit in the course of a retail purchase are “credit cards,” subjecting the “card issuer” to certain additional disclosure and substantive obligations under Federal law. The Interpretive Rule would become effective 60 days after publication in the Federal Register. The CFPB is accepting comments on the Interpretive Rule through August 1, 2024, notwithstanding that the Bureau’s position is that notice-and-comment rulemaking is unnecessary for its interpretation to become effective.Continue Reading CFPB Interpretive Rule Exposes Some BNPL Programs to Credit Card Requirements
CFPB Credit Card Late Fee Rule Stayed . . . For Now
On May 10, the United States District Court for the Northern District of Texas granted the credit card industry at least a temporary reprieve from a CFPB rulemaking that would have restricted late fees on consumer credit cards significantly (as described in more detail in our prior Legal Update).Continue Reading CFPB Credit Card Late Fee Rule Stayed . . . For Now
CFPB Finalizes Significant Restrictions on Credit Card Late Fees
On March 5, the CFPB issued a final rule that would significantly reduce late fees that may be charged on consumer credit card accounts from $30 or more to $8 in most cases. A proposed rule on this subject matter was issued February 1, 2023, and the credit card industry has paid close attention to the rulemaking process since.
The final rule amends provisions of Regulation Z, implementing the Truth in Lending Act, related to permissible penalty fees—including late fees, NSF fees, returned payment fees, etc.— that a card issuer may impose on consumers who violate the terms of a credit card account subject to the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”).Continue Reading CFPB Finalizes Significant Restrictions on Credit Card Late Fees
Court Dismisses Challenge to CFPB Payday Rule Repeal
A district court has dismissed a challenge to the Consumer Financial Protection Bureau’s (“CFPB”) repeal of the underwriting provisions of its 2017 payday rulemaking. The CFPB’s payday lending rule has a long and tortured history. First promulgated in 2017, the rule had two main prohibitions—a prohibition on making payday loans without assessing a borrower’s ability…
CFPB Payday Rule Upheld
Nearly four years after the Consumer Financial Protection Bureau (“CFPB”) first promulgated its rule regulating payday loans, a federal district court in Texas upheld the payment provisions of the rule against various constitutional and other challenges. The court, which had previously stayed the rule’s original compliance date, also provided that the provisions would become effective in 286 days—on June 13, 2022.
Continue Reading CFPB Payday Rule Upheld
Mind the Gap: CFPB Attempts to Address Regulatory Uncertainty With New Advisory Opinion Program
By Ori Lev, Stephanie C. Robinson & Anjali Garg on
On Thursday, June 18, 2020, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) announced a new pilot program to issue advisory opinions (“Pilot AO Program”) on areas of regulatory or statutory uncertainty. The CFPB simultaneously issued a proposed procedural rule on a permanent advisory opinion program (“AO Program”). The Bureau intends to issue advisory opinions (“AOs”) to address ambiguities in legal requirements that are not suited to be addressed through other Bureau programs such as the Regulatory Inquiries Function and Compliance Aids. The proposed AO Program comes more than two years after industry participants requested such a program in response to the Bureau’s March 2018 Request for Information Regarding Bureau Guidance and Implementation Support.
The proposed AO Program is similar to those offered by other state and federal regulators and, if implemented properly, could provide much needed certainty for regulated entities and consumers alike. The AO Program is intended to address areas of regulatory and statutory uncertainty and provide publicly available guidance for similarly situated parties and affected persons. AOs will be issued as interpretive rules under the Administrative Procedures Act, published in the Federal Register, and signed by the Director of the CFPB. Where information submitted to the Bureau is information the requestor would not normally make public, however, the Bureau will treat it as confidential to the extent applicable under its confidentiality regulations. The CFPB will summarize the material facts of the request, and the AOs will apply to situations that conform to those facts. The AO will also indicate where a safe harbor may apply, such as those under certain consumer financial protection laws. The AO Program is not intended for situations that would require a regulatory change or to create bright-line rules where the regulation or statute is intended to require a fact-intensive analysis.
The AO Program will focus on four of the Bureau’s five statutory objectives under 12 U.S.C. 5511(b)—namely, that: (1) consumers are provided with timely and understandable information to make responsible decisions about financial transactions; (2) outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens; (3) Federal consumer financial law is enforced consistently, without regard to the status of a person as a depository institution, in order to promote fair competition; and (4) markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation.
Notably, the Bureau will not use the AO Program to address the statutory objective that “consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination,” stating that “other regulatory tools are often more suitable for addressing” these issues.Continue Reading Mind the Gap: CFPB Attempts to Address Regulatory Uncertainty With New Advisory Opinion Program
OCC Goes Its Own Way on New Community Reinvestment Act Regulations
On May 20, 2020, the Office of the US Comptroller of the Currency announced its final rule overhauling the Community Reinvestment Act regulations. The CRA requires insured depository institutions to participate in investment, lending, and service activities that help meet the credit needs of their assessment areas, particularly low- and moderate-income communities and small businesses…
The OCC Finalizes “Madden Fix” Regulation, Codifying the “Valid-when-Made” Doctrine as Applicable to Loans Made by National Banks and Federal Savings Associations
On Friday, the United States Office of the Comptroller of the Currency (“OCC”) finalized a regulation regarding the “Permissible Interest on Loans that are Sold, Assigned, or Otherwise Transferred” by national banks and federal savings associations. Initially proposed in November 2019, the regulation provides that interest on a loan that is permissible under provisions of federal banking laws establishing the interest authority of national banks and federal savings associations is not affected by a sale, assignment, or transfer of the loan—effectively permitting subsequent holders of loans originated by OCC-regulated entities to take advantage of the originators’ “Interest Exportation Authority.” The rule will be effective 60 days after publication in the Federal Register.
Continue Reading The OCC Finalizes “Madden Fix” Regulation, Codifying the “Valid-when-Made” Doctrine as Applicable to Loans Made by National Banks and Federal Savings Associations