More “true lender” laws are coming, as legislative bodies in Washington, Maryland, and the District of Columbia have introduced bills that would severely impact bank partnership arrangements.
If adopted, the “true...more
On January 23, the FTC entered into a settlement agreement with a cash-advance fintech app for $3 million over violations of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), and ECOA....more
1/29/2024
/ Bank Service Providers ,
Consumer Financial Products ,
Disclosure ,
ECOA ,
Enforcement Actions ,
Federal Trade Commission (FTC) ,
FinTech ,
FTC Act ,
Refunds ,
ROSCA ,
Settlement Agreements
On December 21, the Office of Inspector General (OIG) of the FDIC issued its audit memorandum on the FDIC’s Regional Service Provider (RSP) Examination Program. The OIG’s objective was to assess the effectiveness of the...more
On November 30, Washington D.C. introduced District of Columbia Council Bill B 25-0609, which would opt the state out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”) with...more
On October 9, Florida introduced SB 146, which amends the Florida Consumer Finance Act (CFA), and joins other states that have passed laws characterizing certain nonbanks as the “true lender” of loans made through a bank...more
On November 21, a Washington-based bank confirmed through a public filing that it entered into a consent order with the FDIC alleging that the bank engaged in unsafe or unsound banking practices, primarily related to products...more
On November 15, the CFPB issued an order requiring an Illinois-based fintech lender to pay $15 million in fines. The order additionally prohibits the company from operating in certain lines of business and requires revision...more
11/17/2023
/ Borrowers ,
Civil Monetary Penalty ,
Consumer Financial Protection Bureau (CFPB) ,
Enforcement Actions ,
Executive Compensation ,
Financial Regulatory Reform ,
Financial Services Industry ,
FinTech ,
Informed Consent ,
Lenders ,
Redress Payments ,
Short-Term Loans
On November 2, the FTC entered into a settlement agreement with a Manhattan-based fintech company for $18 million over alleged deceptively marketed cash advances to consumers and impeding customers’ ability to cancel...more
On October 30, the Superior Court of California County of Los Angeles denied the DFPI’s motion for a preliminary injunction to force a Chicago-based fintech company to stop facilitating loans to California borrowers from its...more
11/10/2023
/ Banks ,
Borrowers ,
California ,
Consumer Financial Products ,
Department of Financial Protection and Innovation (DFPI) ,
Financial Institutions ,
Financial Services Industry ,
FinTech ,
Interest Rates ,
Loans ,
Preliminary Injunctions ,
True Lender
On October 17, the CFPB took action against a nonbank fintech company for allegedly deceiving consumers about the speed and cost of remittance transfers through its mobile app. The Bureau also alleges that the company...more
The Federal Reserve Board recently issued two Supervision and Regulation Letters that provide guidance on the agency’s supervision of novel activities and the process such as fintech partnerships, crypto-related activities,...more
On January 11, 2023, a Texas federal court dismissed a class action lawsuit against a leading financial technology company alleging it violated Texas usury laws by charging interest on loans it made through a partnership with...more
In December, a Utah-based bank and its service provider entered into an assurance of discontinuance with the Iowa Attorney General and the Iowa Division of Banking, settling an investigation into allegedly usurious...more
The U.S. Department of the Treasury recently released a report titled “Assessing Impacts of New Entrant Non-bank Firms on Competition in Consumer Finance Markets,” a product of the Biden administration’s effort to assess...more
On September 7, Acting Comptroller of the Currency, Michael Hsu, discussed the long-term threats to trust in banking in remarks at the TCH + BPI Annual Conference. Hsu provided updates on key priorities at the OCC, including...more
9/16/2022
/ Banking Sector ,
Banks ,
BSA/AML ,
Comptroller ,
Cryptocurrency ,
FDIC ,
Federal Reserve ,
Financial Services Industry ,
FinTech ,
OCC ,
Risk Management
On August 10, the CFPB issued a consent order against a FinTech company for a faulty algorithm utilized in its personal finance management app that caused consumer accounts to overdraft and incur overdraft penalties....more
On June 3, a federal court filing in the Southern District of Florida by an Atlanta-based FinTech company revealed that the small business lender is under DOJ investigation for alleged PPP loan approval practices. According...more
7/29/2022
/ CARES Act ,
Coronavirus/COVID-19 ,
Department of Justice (DOJ) ,
Enforcement Actions ,
False Claims Act (FCA) ,
Financial Institutions ,
FinTech ,
Investigations ,
Loans ,
Paycheck Protection Program (PPP) ,
SBA
A federal court filing by a fintech company revealed that it has been under investigation by the Department of Justice (“DOJ”) in relation to its Paycheck Protection Program (“PPP”) loan approval practices for over a year...more
On May 4, the Connecticut Department of Banking issued a temporary cease and desist order directing a peer-to-peer lending platform that connected borrowers with third-party lenders to cease its lending-related activities on...more
6/8/2022
/ Borrowers ,
Cease and Desist Orders ,
Consumer Lenders ,
Consumers ,
Financial Services Industry ,
FinTech ,
Lending ,
Licenses ,
Loans ,
Peer-to-Peer ,
Popular ,
State and Local Government ,
Third Party Funding
On April 8, the California Department of Financial Protection and Innovation (DFPI) filed a cross-complaint against a Chicago-based FinTech company alleging that as the “true lender” of consumer installment loans, it is...more
4/29/2022
/ California ,
California Consumer Financial Protection Law (CCFPL) ,
Consumer Financial Products ,
Cross-Complaints ,
Department of Financial Protection and Innovation (DFPI) ,
Financial Services Industry ,
FinTech ,
Interest Rate Caps ,
Loans ,
True Lender ,
UDAAP
On April 25, the CFPB announced that it is using its “dormant authority” in order to conduct examinations of nonbanks posing risks to consumers. The Bureau has direct supervisory authority over banks and credit unions,...more
On April 7, the FDIC issued a Financial Institution Letter (FIL-16-2022) calling on all FDIC-supervised intuitions that intend to engage in, or that are currently engaged in, any activities involving or related to crypto...more
On April 8, the acting comptroller of the currency, Michael J. Hsu, discussed many aspects of stablecoins (we previously discussed the President’s Working Group report on stablecoins and Hsu’s comments...). In his speech at...more
On March 7, a Chicago-based FinTech company filed a Complaint for Declaratory and Injunctive Relief in Los Angeles County Superior Court against the Commissioner of the California Department of Financial Protection and...more
3/14/2022
/ Borrowers ,
California ,
Class Action ,
Consumer Financial Products ,
Declaratory Judgments ,
Department of Financial Protection and Innovation (DFPI) ,
Fair Access to Credit ,
FinTech ,
Injunctive Relief ,
Interest Rate Caps ,
Loans ,
Local Ordinance ,
Non-Bank Lenders ,
State and Local Government ,
True Lender
On February 8, the U.S. District Court for the Northern District of California ruled against three states – California, Illinois, and New York – challenging the OCC’s rule on the “valid when made” doctrine. In 2020, the OCC...more