To help you keep abreast of relevant activities, below find a breakdown of some of the biggest events at the federal and state levels to impact the Consumer Finance Services industry this past week:

Federal Activities

State Activities

Federal Activities:

• On June 9, the Office of the Comptroller of the Currency (OCC) announced a request for information to gather input on a proposed annual trust survey with the goal of understanding, measuring, and tracking the public’s trust in banking and bank supervision by the OCC and other banking regulators over time. For more information, click here.
• On June 8, the board of governors for the Federal Reserve (the Fed), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and the OCC requested public comment on proposed guidance addressing reconsiderations of value (ROV) for residential real estate transactions. The proposed guidanceadvises on policies that financial institutions may implement to allow consumers to provide financial institutions with information that may not have been considered during an appraisal or if deficiencies are identified in the original appraisal. ROVs are requests from a financial institution to an appraiser or other preparer of a valuation report to reassess the value of residential real estate. An ROV may be warranted if a consumer provides information to a financial institution about potential deficiencies or other information that may affect the estimated value. Comments must be received within 60 days of the proposed guidance’s publication in the Federal Register. For more information, click here.
• On June 8, the CFPB released its Semi-Annual Report to Congress for the period beginning April 1, 2022, and ending September 30, 2022. For more information, click here.
• On June 8, the Commodities Futures Trading Commission (CFTC) obtained a default judgment against a decentralized autonomous organization (DAO) Ooki Dao in the U.S. District Court, Northern District of California. According to U.S. District Judge William H. Orrick’s order, bZeroX, LLC operated a smart contract on the Ethereum blockchain that essentially functioned as an “exchange” for commodity derivative transactions. In 2021, bZeroX LLC transferred control of the software protocol to the Ooki Dao, which the CFTC alleged the founders did to “insulate the … protocol from regulatory oversight and accountability to U.S. law.” Finding the CFTC sufficiently alleged violations of the Commodities Exchange Act and weighing the Eitel factors, the court granted a permanent injunction against the Ooki Dao, assessed civil penalties in the amount of $643,542, and ordered removal of the Ooki Dao’s website. For more information, click here.
• On June 8, the Federal Trade Commission (FTC) announced that it had conducted a new analysis, which shows that bogus bank fraud warnings were the most common form of text message scam reported to the agency, and that many of the most common text scams impersonate well-known businesses. The FTC ranked the top five types of text message scams reported in 2022, with examples of each showing the ways that scammers craft messages designed to deceive consumers. Consumers reported losing $330 million to text message scams in 2022, more than doubling what was reported in 2021. For more information, click here.
• On June 8, the U.S. Department of the Treasury announced a new effort to help ensure fairness and increase transparency in the department’s compliance and enforcement practices. The framework, laid out in a memo authored by Deputy Secretary of the Treasury Wally Adeyemo, is intended to provide a roadmap for department bureaus and offices to guide their compliance and enforcement efforts with the public. For more information, click here.
• On June 8, the CFPB acted against a medical debt collector for numerous debt collection and credit reporting violations. In at least thousands of cases, the debt collector continued to attempt to collect on a debt that was not substantiated after a consumer disputed the validity of the debt. The order requires the debt collector to pay redress to affected consumers, and to pay a $1.68 million penalty to the CFPB’s victims relief fund. For more information, click here.
• On June 7, the FTC announced that it is seeking public comments and suggestions on ways it can work more effectively with state attorneys general nationwide to help educate consumers about, and protect them from, potential fraud. The request for public information comes at the direction of the FTC Collaboration Act of 2021, which President Biden signed into law last October. For more information, click here.
• On June 7, the FTC announced that it has provided its annual report to the CFPB on its enforcement and related activities in 2022 in regards to the Truth in Lending Act, Consumer Leasing Act, and Electronic Fund Transfer Act. The report highlights enforcement actions related to the acts and their implementing regulations, including in the areas of automobile purchases and financing, payday lending, credit repair and debt relief, other credit, and electronic fund transfers. For more information, click here.
• On June 7, the CFPB released a blog discussing the fact that the pause on federal student loan interest, payments, and collections is now scheduled to end 60 days after June 30, which means borrowers will have to start making payments soon. For more information, click here.
• On June 6, the FTC announced that its law enforcement actions resulted in more than $392 million in refunds to consumers in 2022, the agency said in its annual report on refunds. More than 1.9 million consumers benefited from FTC refund payments. For more information, click here.
• On June 6, Swift announced that it is testing the use of its existing financial market infrastructure to transfer tokenized value over blockchain networks. The test includes managing and trading assets over public and private blockchain networks, and aims to solve the problem of having multiple networks that are not interoperable, and therefore, create friction in handling assets. The project’s purpose reportedly is to make interactions as secure and trusted as the current means of trading traditional assets, while using blockchain technology to improve efficiencies, costs, and opportunities. For more information, click here.
• On June 6, the CFPB released a new issue spotlight on the expansive adoption and use of chatbots by financial institutions. Chatbots are intended to simulate human-like responses using computer programming and help institutions reduce the costs of customer service agents. These chatbots sometimes have human names and use popup features to encourage engagement. Some chatbots use more complex technologies marketed as “artificial intelligence,” to generate responses to customers. For more information, click here.
• On June 6, the Fed, CFPB, and FDIC issued final joint guidance designed to help banking organizations manage risks associated with third-party relationships, including relationships with financial technology companies. The final guidance describes principles and considerations for banking organizations’ risk management of third-party relationships. The guidance covers risk management practices for the life cycle stages of third-party relationships: planning, due diligence and third-party selection, contract negotiation, ongoing monitoring, and termination. For more information, click here.
• On June 6, the Securities and Exchange Commission (SEC) charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Coinbase for failing to register the offer and sale of its crypto asset staking-as-a-service program. For more information, click here.
• On June 5, the CFPB revised its Supervision and Examinations Manual to incorporate minor changes for larger participants under “Module 7 – Consumer Alerts, Identity Theft, and Human Trafficking Provisions.” The updates specifically included FCRA and Regulation V requirements that prohibit credit reporting agencies from including information in consumer reporting in cases of human trafficking. For more information, click here.
• On June 5, the SEC sued Binance and its CEO, Changpeng Zhao, in a 13-count complaint that alleges violations of a host of securities laws. The complaint alleges that despite knowing that many customers were located in the U.S., and despite federal law barring the unregistered offer and sale of securities, Binance nonetheless offered unregistered securities to Americans. Binance allegedly used its U.S. platform (Binance.US) to insulate itself, and “reveal, retard, and resolve law enforcement targets.” The SEC also alleged that Binance and Zhao used market-making companies under their control to inflate trading prices, and to profit from their customers. For more information, click here.
• On June 1, the Fed, CFPB, FDIC, OCC, NCUA, and Federal Housing Finance Agency requested public comment on a proposed rule designed to ensure the credibility and integrity of models used in real estate valuations. In particular, the proposed rule would implement quality control standards for automated valuation models (AVMs) used by mortgage originators and secondary market issuers in valuing real estate collateral securing mortgage loans. For more information, click here.

State Activities:

• On June 8, California Attorney General Rob Bonta issued a statement in response to the Federal Communications Commission’s (FCC) cease-and-desist order against Avid Telecom. On May 23, Bonta, along with 49 other attorneys general (AGs), filed a lawsuit against the company for allegedly initiating and facilitating several unlawful robocalls in the state and around the U.S. On June 7, Bonta joined 28 other AGs in submitting a comment letter to the FCC regarding proposals to reduce the number of robocalls and robotexts received by consumers. The comment letter outlines the AGs’ support for the FCC’s proposed rule clarifying that the Do-Not-Call registry also apply to robotexts. The letter also outlines support for the FCC’s proposed rule that would require telecommunications companies to investigate and block texts of senders suspected of sending illegal texts upon receipt of notice from the FCC. The AGs also pushed in the letter for clarification regarding what it means for a consumer to “consent” to receiving telemarketing calls or texts under the Telephone Consumer Protection Act. For more information, click here.
• On June 7, Oregon Governor Tina Kotek signed SB 981 into law. The bill exempts certain accounts that originate in the Department of Revenue from the general requirement to assign liquidated and delinquent accounts to a private collection agency within one year of the most recent payment on the account. For more information, click here.
• On June 7, Manhattan District Attorney (DA) Alvin Bragg, Jr. announced seizure of the website domain for Coin Dispute Network (CDN). CDN is a fraudulent cryptocurrency company that was exposed in a recent investigation into the company’s crypto asset recovery business, which purported to act as a tracing and recovery service for investors who experienced theft of their cryptocurrency. However, the DA’s office alleges that the company kept the fees associated with the tracing and recovery services and also took additional Ethereum from its customers by making false promises of asset recovery. CDN is also accused of generating inaccurate blockchain tracing reports to victims. For more information, click here.
• On June 6, New York Attorney General Letitia James released a report detailing the accomplishments of the AG’s Health Care Bureau’s Helpline (the Helpline). The Helpline is a free service that handled more than 2,300 consumer complaints regarding, among other things, the receipt of unexpected medical bills following office visits; medical charges that were twice the quoted in-network estimate; and illegal billing practices for ambulance services. The Helpline has helped to recover more than $1.5 million in restitution and savings for New Yorkers. Aside from identifying the challenges that consumers face, the complaints sent to the Helpline also assist with exposing systemic problems in the state’s health care system that need to be addressed. For more information, click here.
• On June 6, the Alabama Securities Commission (ASC) announced that it has issued a Show Cause Order to crypto asset company Coinbase, Inc. and its parent corporation Coinbase Global, Inc. (collectively, “Coinbase”). The order allows Coinbase 28 days to show cause in terms of why the company should not be ordered to cease and desist from selling unregistered securities in the state. The order alleges that Coinbase’s staking rewards offerings are not properly registered despite having been made available for purchase by Alabama residents. This action is a result of a multistate task force of ten securities regulators, including Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin. For more information, click here.
• On June 6, the California Department of Financial Protection and Innovation (DFPI) initiated an action against Coinbase Global, Inc., alleging that the company has offered and sold unqualified securities, in the form of asset staking rewards offerings, to the California residents and other consumers throughout the U.S. The DFPI commissioner is seeking a desist and refrain order preventing any further offer and sale of the Coinbase securities, unless they have first been qualified under the law, or are otherwise excepted or exempted from qualification. Additionally, the commissioner is seeking to levy administrative penalties against Coinbase as allowed by statute. For more information, click here.
• On June 6, Florida Governor Ron Desantis approved SB 262, creating the Florida Digital Bill of Rights and promoting increased transparency related to technology. Among other things, the bill (1) with certain exceptions, limits the ability of a governmental agency to form agreements or working relationships with social media platforms, and limits the government’s ability to restrict certain content or accounts on the platform; (2) establishes certain guidelines and restrictions with respect to how an online platform that provides an online service, product, game, or feature likely to be predominantly accessed by children must process and handle data in connection with such transactions; (3) establishes any violation of the provisions related to prohibited conduct with respect to the protection of children in online spaces as an actionable unfair and deceptive trade practice. and grants the Department of Legal Affairs the authority to bring an action against such platform; (4) establishes consumers’ rights regarding their personal data, including, but not limited to, (a) the right to confirm whether their personal data is being processed or accessed, (b) the right to correct inaccuracies in their data, (c) the right to delete their data, (d) the right to obtain a copy of data used by a controller, and (e) the right to opt out of processing, sale, or profiling of certain data. For more information, click here.
• On June 6, Colorado Governor Jared Polis signed HB 23-1229, which amends the state’s Uniform Consumer Credit Code (UCCC). With the amendment, the state has opted out of a Depository Institutions Deregulation and Monetary Control Act provision that permits state-charted banks to preempt interest rates applicable to consumer credit transactions. The amendments to the UCCC relate to loans that do not exceed $1,000 and, among other things, they (1) reduce the permissible acquisition charge on original and refinanced loans; (2) reduce the allowed monthly installment account handling charges; (3) increase the minimum loan term to six months from 90 days; (4) eliminate a lender’s ability to assess delinquency charges on a loan; (5) revise certain provisions that deal with the terms upon which an acquisition charge must be refunded to a consumer; and (6) reduce the number of times a lender can refinance a consumer loan to one time per year. These amendments will become effective on July 1, 2024, and will govern consumer credit transactions occurring after that date. For more information, click here.
• On June 5, Colorado Governor Jared Polis signed SB 248. The bill, among other things, amends Colorado Revised Statutes 5-16-119, the state’s collection agency licensing law, to clarify that nothing in the new bill prohibits a licensee from permitting employees to work from a remote location, with some exceptions. The bill also amends C.R.S. 5-20-106, the state’s student loan servicing law to (a) require licensees to file an annual report, (b) prohibit any student loan servicer from doing business at a location other than those named in the license, and (c) clarify that nothing in the new bill prohibits a licensee from permitting employees to work from a remote location, subject to certain requirements. For more information, click here.
• On June 5, the DFPI announced the initiation of three enforcement actions against various debt collection operations for allegedly attempting to collect in the state without a license. Additionally, the companies are also alleged to have violated the Federal Debt Collection Practices Act (FDCPA) and the state’s equivalent statute by making false or misleading representations when attempting to collect certain debts. The companies will pay combined fines of $85,000 and will be required to refrain from engaging in such activities in the future. For more information, click here.
• The DFPI recently released the 2022 Annual Report of Activity Under the California Financial Protection Law, which provides a survey of the actions DFPI took during the prior year pursuant to the California Consumer Financial Protection Law (CCFPL). This report marks the second full year of CCFPL implementation, and provides data and statistics related to CCFPL implementation activities from January 1, 2022, through December 31, 2022. For more information, click here.