In this issue. The Consumer Financial Protection Bureau (CFPB) finalized a rule on federal oversight of popular digital payment apps; the CFPB proposed a rule to regulate the sale of sensitive personal data by data brokers; the Federal Deposit Insurance Corporation (FDIC) updated guidance on advertising and use of the FDIC official signs, name, and logo; the Office of the Comptroller of the Currency (OCC) increased 2025 assessment rates for national banks and federal savings associations; and the CFPB issued final rules announcing the annual adjustments to Truth in Lending Act (TILA) and Fair Credit Reporting Act (FCRA) thresholds for 2025. These and other developments are discussed in more detail below.
Regulatory Developments
CFPB Finalizes Rule to Supervise Popular Digital Payment
Apps
On November 21, the CFPB finalized a rule granting the CFPB supervisory
authority over large non-bank companies with payment transfer and
digital wallet apps. Under the rule, the CFPB has authority to
oversee companies offering services that facilitate payments for
“personal, household, or family purposes” and
conducting greater than 50 million transactions annually. The rule
only applies to transactions made in US dollars and not foreign
currencies or cryptocurrency. Such oversight is in line with the
authority the CFPB already exercises over banks and credit unions
and will allow the CFPB to conduct proactive examinations of
payment companies. The CFPB has noted that it plans to focus on
whether data collection by these entities complies with privacy
laws, whether they facilitate resolution of incorrect or fraudulent
transactions in compliance with the Electronic Fund Transfer Act,
and whether consumers lose access to payment apps without notice or
recourse.
“Digital payments have gone from novelty to
necessity and our oversight must reflect this reality. The rule
will help to protect consumer privacy, guard against fraud, and
prevent illegal account closures.”
— Rohit Chopra, CFPB Director
CFPB Proposes Rule to Regulate the Sale of Sensitive
Personal Data by Data Brokers
On December 3, the CFPB issued a notice of proposed rulemaking (Proposed
Rule) and request for public comment concerning data brokers and
the sale of sensitive personal and financial information. The
Proposed Rule seeks to restrict the sale of personal information
identifiers by data brokers, such as Social Security Numbers, phone
numbers, and certain financial data, and require that such
information be shared only for legitimate purposes. Additionally,
the Proposed Rule specifies that data brokers who sell certain
sensitive consumer information qualify as “consumer reporting
agencies” subject to the FCRA's requirements on
accuracy, providing consumers access to their information, and
implementing safeguards to prevent misuse. Comments on the Proposed
Rule must be received on or before March 3, 2025.
FDIC Updates Guidance on Advertising and Use of FDIC
Official Signs, Name, and Logo
On December 2, the FDIC announced additional questions and
answers (Q&As) regarding its final rule governing FDIC Official
Signs and Advertising Requirements, False Advertising,
Misrepresentation of Insured Status, and Misuse of the FDIC Name or
Logo. The final rule was issued in December 2023 and became
effective on April 1, 2024; however, full compliance with subpart
A, related to FDIC Official Signs and Advertisement of Membership,
of the final rule is not required until May 1, 2025. The FDIC
previously updated the Q&As in July and August of 2024. The
additional Q&As are intended to provide additional information
regarding the use of the FDIC's digital sign and placement of
the official sign in bank branches.
OCC Increases 2025 Assessment Rates for National Banks
and Federal Savings Associations
On November 27, the OCC announced an increase in assessment rates
for 2025 to enhance staff recruitment, training, and technology
systems, ensuring effective supervision of the federal banking
system. Institutions with assets over $40 billion will see rates
rise by 16%, reflecting higher supervisory costs for the largest
institutions, while smaller institutions' rates will increase
by 2.65% to account for inflation. The OCC will continue imposing a
surcharge on institutions that require more oversight, calculated
based on asset levels and risk ratings, with an increase in the
asset cap used in the surcharge calculation from $40 billion to
$250 billion. The new rates will take effect on January 1, 2025 and
apply to assessments due on March 31 and September 30, 2025.
CFPB Announces Annual Adjustments to TILA Thresholds for
2025
On November 20, the CFPB issued a final rule, effective January 1, 2025,
amending the official interpretations for Regulation Z, which
implements TILA, to adjust the dollar amounts of various thresholds
that impact open-end consumer credit plans, HOEPA loans, and
qualified mortgages.
CFPB Announces Maximum Allowable Charge Threshold Under
FCRA for 2025
On November 21, the CFPB issued a final rule, effective January 1, 2025,
amending an appendix for Regulation V, which implements the FCRA,
to maintain at the 2024 ceiling of $15.50 the maximum amount that a
consumer reporting agency may charge a consumer for disclosing to
the consumer information in the consumer's file.
Check Out Goodwin's Latest Industry Insights
New Client Alert: An Overview of the NIS2 Directive and
Its Implementation in France and Luxembourg
With the arrival of the Regulation on Digital Operational
Resilience (DORA) and the Network and Information Security 2 (NIS2)
Directive, the security of information systems and the protection
of critical infrastructures have become priorities for the European
Union. NIS2 entered into force on 13 January 2023 and aims to
strengthen the cybersecurity of critical infrastructures in the
European Union. To read the full alert, click here.
New Fintech Flash: Money20/20 Zeros in on AI, Open
Banking, and Payment Innovation
The end of October marked the conclusion of another
successful year of Money20/20, the premier event for the payments,
banking, fintech, and financial services industries. If you missed
the conference, fear not. Goodwin attorneys have recapped some of
the most talked-about topics in fintech. To read the full alert,
click here.
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