December 20, 2019

Consumer Financial Services Practice Digest

3 min

Director Kathy Kraninger Provides Insights into CFPB's Focus

In recent public remarks, CFPB Director Kathy Kraninger provided an overview of the CFPB's performance over the past year and insight into the Bureau's upcoming areas of focus. Her remarks addressed CFPB supervision and enforcement, partnership with state governments and other federal agencies, and updates on CFPB rulemaking activities, including the Payday Rule and proposed Debt Collection Rule.

Hey, Payments and Fintech Companies: Have You Met the FDIC?

The FDIC issued a proposal to update its brokered deposits rules, significantly updating a framework that was created almost 30 years ago. Technology has changed how banks source deposits, and the FDIC understands that the brokered deposits rules created difficulties for payments and fintech companies and the banks that partner with them. The proposal adds activities that would be covered by the primary purpose exception and introduces an application process for nonbanks to obtain a determination that they are not deposit brokers.

After Years of False Starts, OCC and FDIC Move to Update CRA Regulations

The FDIC and OCC issued a joint proposal to update their Community Reinvestment Act (CRA) regulations for the first time in nearly 25 years. Interestingly, the Federal Reserve Board did not join with the other agencies. The proposed changes are significant, and banks should take advantage of the opportunity to submit comments on the proposals. The NPR modifies all aspects of CRA compliance, including (1) qualifying activities, (2) assessment areas, (3) methods of measuring performance, and (4) data collection, recordkeeping, and reporting.

CFPB's Proposed Remittance Rule Seeks to Address Industry Concerns

The CFPB has proposed to amend Regulation E's Remittance Rule to account for industry concerns regarding, among other things, the July 21, 2020 expiration of a statutory exception allowing for estimated disclosures. Comments on the Proposed Rule are due no later than January 21, 2020.

INSIGHT: Providing Financial Services in the CBD Industry—What’s Legal?

The legality of CBD is complicated, with the product sitting at the intersection of numerous federal and state laws. Venable attorneys examine those laws and suggest ways banks and payment companies can minimize risk. Bottom line, they need compliance programs tailored for CBD businesses, including controls for customer onboarding, due diligence, monitoring, and reporting of suspicious activities.

"CFPB Structure to Be Tested by the Supreme Court" Webinar Recap

Attorneys from Venable's Consumer Financial Services Practice Group recently presented the webinar, "CFPB Structure to Be Tested by the Supreme Court". Topics included the constitutionality of the Consumer Financial Protection Bureau's structure and the ramifications of the U.S. Supreme Court's decision to take on this issue in Seila Law LLC v. CFPB. Litigants have argued, and current leaders at the Bureau and Department of Justice have agreed, that the CFPB's status as an independent agency led by a single director who is removable only for cause (rather than at the will of the president) violates the separation of powers. Panelists discussed the origins of the constitutional argument regarding the Bureau, the path to the Supreme Court, the possible decisions by the Court, and their effect on the CFPB and the industry.