In this Issue. The Federal Trade Commission (FTC) provided its annual letter to the Consumer Financial Protection Bureau (CFPB) on its 2023 Equal Credit Opportunity Act (ECOA) activities; the CFPB updated its supervisory appeals process; and the Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) released Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) stress test scenarios for 2024. These and other developments are discussed in more detail below.
Regulatory Developments
FTC Provides Annual Letter to CFPB On 2023 Equal Credit
Opportunity Act Activities
On February 16, in response to a CFPB request for information
regarding the FTC's enforcement actions, the FTC provided its
annual letter to the CFPB on the FTC's
2023 ECOA activities, including information on its enforcement
activities, research, and policy developments under the purview of
ECOA and Regulation B. Among other topics, the letter highlighted
successful settlements with auto dealers that were alleged to have
discriminated against black consumers and the FTC's work as a
member of the Interagency Task Force on Fair Lending. The letter
also outlined the FTC's initiatives designed to assist
businesses and consumers navigate various ECOA issues.
CFPB Updates Supervisory Appeals Process
On February 16, the CFPB updated to its appeals process for supervisory
findings made during examinations. Changes include:
- Any CFPB manager may now sit on the appeals committee, as long as the manager has experience in the relevant issue and did not participate in the underlying matter, whereas, previously, only managers from the CFPB's Supervision team could participate;
- Appeals may now be remanded to Supervision staff for consideration of a modified finding, adding to the existing options of the finding being upheld or rescinded; and
- Institutions may now appeal any compliance rating arising out of an examination, whereas, previously, institutions could only appeal "adverse ratings" of three to five.
The Federal Reserve, FDIC, and OCC Release Dodd-Frank
Act Stress Test Scenarios for 2024
On February 15, the Federal Reserve, FDIC, and OCC released the annual Dodd-Frank Act stress
test scenarios for 2024 for their respective covered institutions.
The scenarios test for resilience under hypothetical economic
conditions, including under baseline and severely adverse
scenarios, such as severe global recession. The OCC and FDIC stress
tests must be submitted to their respective agency on or before
April 5, and the reporting entity must publish the results on their
website or in any other forum that is reasonably accessible to the
public between June 15 and July 15. The Federal Reserve will
release results of its stress test in June 2024.
Check Out Goodwin's Latest Industry Insights
Upcoming Webinar: Consumer Financial Services: Emerging
Issues for 2024 (March 7, 2:00-3:00 PM ET)
Goodwin partner Kyle Tayman will moderate a webinar with partner
Levi Swank and associate Viona Harris following Goodwin's
publication of its annual report on consumer financial services.
This report highlights the market trends, legal developments, and
enforcement dynamics that defined 2023, and offers insights about
the evolving opportunities and challenges facing stakeholders in
2024. This webinar will cover key areas of regulatory and
enforcement focus Goodwin expects to see in 2024. It will also
address key rules, regulations, and guidance related to: consumer
fees, including "junk" fees and fees for requesting
financial accounting information; data privacy and the CFPB's
rulemaking on personal financial data rights; fair lending and the
use of artificial intelligence; and consumer payments and small
dollar lending in the digital age.
To register, click here.
FinCEN Proposes AML Program Rule for Investment
Advisers
The Financial Crimes Enforcement Network (FinCEN), a
bureau within the US Treasury Department, has issued a proposed
rule that would subject certain investment advisers to anti-money
laundering (AML) and countering terrorist financing (CTF)
compliance requirements under the Bank Secrecy Act (BSA). In
proposing the rule, FinCEN cited concerns that investment advisers
could be exploited by illicit actors to gain access to the US
financial system or by foreign governments to obtain access to or
information about certain technologies and services with national
security implications. Read the full client alert here.
SEC to Ban Exchange Volume-Based Pricing Tiers
While the SEC meddling in industry pricing and other
commercial matters is not a new phenomenon, a recent SEC proposal
reflects an enhanced willingness by the agency to tightly grip the
industry's purse strings (and a slow but steady regulatory
creep that some would argue has degraded free enterprise). In
taking this step, the agency has also pitted those exchanges that
currently use volume-based pricing tiers against their members that
historically have not been able to qualify for the most attractive
pricing. This proposal also comes at a peculiar time, given that
the SEC has separately proposed changes to minimum stock pricing
increments, access fee caps, and best execution standards that
could conflict with, if not wreak havoc on, exchange and member
pricing and order routing decisions. Read the full client alert here.
Corporate Transparency Act (CTA) Resource
Center
Go-to resource with on-demand webinars and compliance toolkit.
Consumer Finance Insights (CFI)
Blog
The latest on consumer finance regulation, litigation, and
enforcement.
Fintech Flash
The latest news and developments for the rapidly evolving fintech
industry – which often can change in a flash.
Bank Failure Knowledge
Center
Timely updates on important developments following the March 2023
US bank failures.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
