Kraninger Questioned on CFPB Nomination
Kathleen Kraninger, the nominee for director of the Consumer Financial Protection Bureau (the Bureau), answered questions on July 19 regarding how she would handle the directorship of the Bureau. As widely expected, Senate Democrats were critical of Kraninger, and Republicans were more supportive. Kraninger described her approach to the position and the Bureau's mission, should she be confirmed by the Senate. She stated that her priorities would be increased transparency, cooperation with other regulators, the Bureau's information security, and accountability.
CFPB Office of Innovation to Be Headed by Arizona Fintech Sandbox Leader
Under new management, "Project Catalyst" was recently transitioned to the Office of Innovation. The Bureau launched Project Catalyst in 2012 to facilitate innovation in consumer financial products and services. According to the Bureau's press release, "the new office will focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators, and reviewing outdated or unnecessary regulations."
New York DFS Calls for Increased Regulation of Online Lending in Industry Report
The New York DFS is calling for increased supervision of online lending to New York residents. The DFS Online Lending Report, released on July 11, 2018, makes the following recommendations: (1) apply New York's consumer protection laws equally to all consumer and small business lending activities, including those related to loan pricing disclosures, fair lending, fair debt collection, and data protection; (2) impose New York's usury laws on all credit extended to New York residents; and (3) require all companies involved in online lending to obtain a license from the DFS.
FTC and CFPB Part of a New Consumer Fraud Task Force
The FTC and CFPB announced their participation in a "Task Force on Market Integrity and Consumer Fraud." Created by an executive order, the Task Force is a DOJ-led effort to "provide guidance for the investigation and prosecution of cases involving fraud on the government, the financial markets, and consumers … [and] enhance cooperation among agencies in the investigation and prosecution of fraud and other financial crimes."
Executive Order Addresses ALJ Appointments Post-Lucia
In the wake of Lucia v. Securities and Exchange Commission, discussed here, a recent executive order removes ALJs from the Office of Personnel Management's competitive service. In Lucia, the Supreme Court determined that ALJs are "inferior officers" of the United States and, therefore, are subject to the Appointments Clause of the Constitution. This means that ALJs must be appointed by the president, courts, or heads of departments, but historically ALJs have been hired through the OPM process.
The California Consumer Privacy Act of 2018
On June 28, 2018, the California governor signed into law AB 375, which will come into force as the California Consumer Privacy Act of 2018 (CCPA) on January 1, 2020. The CCPA was passed by the California legislature in exchange for the withdrawal of a ballot initiative that had proposed a different consumer privacy law that was viewed as more onerous by many in the industry. The CCPA will cover companies doing business in California that collect personal information from California residents and meet certain thresholds related to company revenue or amount of data. For companies subject to the CCPA, the law is likely to compel significant changes in business practices at a time when many are still grappling with the impact of the EU General Data Protection Regulation.
Upcoming Events
July 24, 2018: "CFPB/FTC Debt Collection Update," ACA International 2018 Convention
July 31, 2018: "Working with Banks: What Online Lenders Need to Know Regarding Bank-Fintech Partnerships," 2018 Online Lenders Alliance Compliance University at Venable's Washington, DC office
August 1, 2018: "Preparing for CFPB Supervision: What Compliance Officers Need to Know," 2018 Online Lenders Alliance Compliance University at Venable's Washington, DC office
October 9, 2018: "As American as Apple Pie? The Trial by Media Phenomenon," 2018 Government Investigations & Civil Litigation Institute (GICLI) Annual Meeting