January 18, 2019

Consumer Financial Services Practice Digest

3 min

Consumer Financial Services Outlook 2019 Webinar

Members of Venable's Consumer Financial Services practice discussed the current status of federal and state consumer financial protection law and policy, outlining what you and your company should keep on your radar as we head into 2019. Jonathan Pompan led the discussion with colleagues Andy Arculin, Allyson Baker, Ellen Berge, Laura Biddle, Andrew Bigart, Meredith Boylan, and Josh Raymond on hot topics and shared experiences from the front lines, offering strategies to help you navigate the evolving legal and regulatory landscape.

Click here to listen to the recording and/or view the slides, which touch on the following topics:

  • New Congress: Policymaking and Investigations
  • State Attorneys General and Regulators
  • New CFPB Management, FTC Update, and Banking Agencies
  • Rulemaking Updates: Small Dollar Loans, Debt Collection, and More
  • State Legislative and Regulatory Trends
  • Forging Ahead with Compliance Initiatives
  • Enforcement and Litigation Trends
  • Future of Bank FinTech Partnerships and Chartering

CFPB Seeks Explicit MLA Supervisory Authority

CPFB Director Kathy Kraninger has asked Congress to amend the Consumer Financial Protection Act (CFPA) to explicitly permit the Bureau to supervise banks and financial institutions under the Military Lending Act (MLA). Among other things, the MLA sets a 36% interest rate cap on the Military Annual Percentage Rate (MAPR) and requires mandatory disclosures on loans to servicemembers. The MLA covers a wide variety of credit products, including payday loans, auto title loans, deposit advance loans, tax refund loans, credit cards, installment loans, unsecured lines of credit, and overdraft lines of credit.

The Bureau has enforcement authority under the MLA granted by the statute itself. However, the CFPA only provides for Bureau supervisory examinations under "Federal consumer financial laws"—including 18 enumerated laws and the CFPA itself—and the MLA is not among those enumerated laws. Under former CFPB director Richard Cordray, the Bureau included reviews for compliance with the MLA in its examinations, but former acting director Mick Mulvaney reversed this position and suspended MLA exams.

The proposed amendments do not seek to add the MLA to the enumerated laws that make up the CPFA's "Federal consumer financial laws." Rather, the amendments would add a specific provision authorizing the CFPB to conduct examinations to, inter alia, assess compliance with the requirements of 10 U.S.C. § 987.

Kraninger's CFPB – A First Look

An email from newly appointed CFPB Director Kathy Kraninger (reported on by American Banker) provides a glimpse at the goals and directions of the Bureau under her leadership. This first look may provide valuable insights into the new director's plan for the agency, which was not widely explored during her confirmation process. A question as Kraninger takes the reins of the Bureau is whether her leadership will be a continuation of the policies begun by Acting Director Mulvaney, or a distinct third iteration of the Bureau.