To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week:

Federal Activities

State Activities

Federal Activities:

• On April 11, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra and Commissioner for Justice and Consumer Protection of the European Commission (EC) Didier Reynders, released a joint statement summarizing three meetings of senior staff and subject matter experts to discuss shared priorities. For more information, click here.
• On April 11, General Counsel and Senior Advisor to the CFPB Director Seth Frotman, gave prepared remarks at the National Consumer Law Center/National Association of Consumer Advocates Spring Training covering, among other things, medical billing, collections, and credit reporting. Frotman noted that over the past two years, the CFPB has reported receiving more than 15,000 complaints about medical debt collection and that it recently clarified that medical debt collectors are strictly liable for any inaccuracies in the amount owed. Frotman also stated that medical debt can impact a consumer’s credit report, which in turn can affect their ability to secure loans, employment, or housing. The CFPB has initiated a rulemaking process to exclude medical bills from credit reports. This federal initiative is supported by state-level actions, with laws being proposed or enacted to offer consumer protections regarding the collection and reporting of medical bills. The CFPB has also noted issues with the financial assistance programs of nonprofit hospitals. There have been complaints about debt collectors pursuing medical bills that have been resolved by these financial assistance programs. Furthermore, some hospitals have requirements in their financial assistance policies that may be inconsistent with Internal Revenue Service (IRS) regulations and possibly state law. Frotman said that the CFPB is keen to collaborate with states in overseeing debt collectors and emphasized that collecting debts that are not owed, or collecting incorrect amounts violates the Fair Debt Collection Practices Act (FDCPA). For more information, click here.
• On April 10, Uniswap’s CEO Hayden Adams announced on social media platform “X” that the U.S. Securities and Exchange Commission (SEC) intends to pursue an enforcement action against Uniswap. Adams announced the receipt of the so-called “Wells Notice,” stating he was not surprised but “just annoyed, disappointed, and ready to fight.” In a press conference, Uniswap’s COO Mary-Catherine Lader and Chief Legal Officer Marvin Ammori stated that the notice focused on Uniswap acting as an unregistered securities broker and an unregistered securities exchange. However, it is unclear whether Uniswap’s native token “UNI” was implicated as a potential security in the notice. For more information, click here.
• On April 10, the Acting Comptroller of the Currency Michael J. Hsu discussed the value of financial literacy for new Americans in remarks during the Financial Literacy and Education Commission’s Public Meeting. For more information, click here.
• On April 10, the Federal Trade Commission (FTC) issued a report to Congress detailing the FTC’s law enforcement cooperation with state attorneys general (AG) nationwide and presenting best practices to ensure continued effective collaboration. The report detailed best practices used to enhance strong information-sharing between the FTC and its state law enforcement partners, discussed how the FTC coordinates joint and parallel enforcement actions with state AGs and other state consumer protection agencies, and presented ideas on expanding the sharing of expertise and technical resources between agencies. Finally, the report also stressed the legislative need to restore the FTC’s Section 13(b) authority to seek equitable monetary refunds for injured consumers, presented ways to enhance collaboration and conserve resources by providing the FTC with the independent authority to seek civil penalties, and described the agency’s need for clear authority to pursue legal actions against those who assist and facilitate unfair or deceptive acts or practices. For more information, click here.
• On April 10, the Office of the Comptroller of the Currency (OCC) announced that it will extend the comment period on its proposal to update its rules for business combinations until June 15, to allow interested parties more time to provide comments. For more information, click here.
• On April 10, the Federal Deposit Insurance Corporation (FDIC) released a report on its plans and readiness to step in as a receiver for a financial company under Title II of the Dodd-Frank Act. The FDIC chairman said this report was the “most detailed description to date of the FDIC’s preparedness to use its Title II resolution authority.” For more information, click here.
• On April 9, the U.S. Department of the Treasury released the testimony of Deputy Secretary of the Treasury Wally Adeyemo before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, concerning the illicit finance risks associated with cryptocurrencies. In his testimony, Adeyemo expressed the department’s concerns regarding how terrorist groups and other harmful actors are exploiting cryptocurrencies to evade sanctions. He provided numerous examples of how these actors have manipulated cryptocurrencies to solicit, launder, and store illicit funds. Adeyemo proposed three reforms to counter these threats: the introduction of a secondary sanctions tool aimed at foreign digital asset providers facilitating illicit finance; modernizing and closing gaps in existing authorities by broadening their scope to explicitly include key players and core activities in the digital ecosystem; and addressing jurisdictional risks from offshore cryptocurrency platforms, which Adeyemo identified as a significant challenge. For more information, here.
• On April 8, President Joe Biden announced a new plan for student loan forgiveness. President Biden’s revised plan targets specific borrowers. In these remarks, President Biden also discussed his plan to “cancel runaway interest” for millions of borrowers. The Biden administration estimates that, if its new plan is enacted as proposed, borrowers will get up to $20,000 of unpaid interest on their federal student debt forgiven, regardless of their income. For more information, click here.
• On April 8, the U.S. District Court for the District of Minnesota granted the FDIC’s motion to dismiss in a case brought by a trade association and a commercial bank challenging the FDIC’s guidance related to insufficient fund fees. For more information, here.
• On April 5, the CFPB issued a report on the relationship between trends in discount points and interest rates. The report used HMDA data between Q1 of 2019 and Q3 of 2023 when interest rates were at “record-highs” and before the Federal Reserve announced its intention to lower interest rates. For more information, click here.
• On April 4, FDIC Chairman Martin J. Gruenberg delivered a speech on the FDIC’s economic inclusion strategy. The speech highlighted the corporation’s commitment to economic inclusion, efforts to understand the size and characteristics of the unbanked market, and past FDIC economic inclusion efforts. For more information, click here.
• On April 3, the FDIC made its Community Reinvestment Act Performance Evaluation for a bank from September 2022 public for the first time. During its supervision window from 2019 to 2022, the FDIC rated the bank’s CRA rating as “Needs to Improve,” which was a downgrade from its previous rating of “Satisfactory.” For more information, click here.
• The Bank of International Settlements (BIS) and the Financial Stability Institute have recently released a report evaluating regulatory reactions to issuers of flat-pegged stablecoins. The report delves into various risks associated with fiat-pegged stablecoins, such as maintaining parity with fiat currency, risks of illicit activities, and redemption risks. It also contrasts regulatory frameworks from 11 authorities across seven jurisdictions, aiming to pinpoint emerging trends and commonalities. The report highlights that standard-setting bodies and international organizations are striving for a uniform policy response to fiat-pegged stablecoins. For more information, click here.
• On April 4, the Federal Reserve released an enforcement action against Mode Eleven Bancorp, a Wyoming-based bank holding company as part of a September 2023 inspection that found alleged deficiencies related to the “fintech business strategy, board oversight, capital, earnings, liquidity, risk management, and compliance.” For more information, click here.

State Activities:

• On April 9, Kentucky Governor Andy Beshear signed SB 488 into law. The bill establishes when a county clerk shall admit any amendment, renewal, modification, or extension of a recorded mortgage to record. Additionally, the bill establishes when a county clerk shall admit affidavits of amendment prepared and executed by an attorney to record. The bill further establishes when a promise, acknowledgement, or payment of money operates as an extension of a lien in a recorded mortgage or deed. For more information, click here.
• On April 9, Beshear signed HB 726 into law, which makes several revisions to existing state law relating to the regulation of financial institutions. Among other things, the bill makes numerous revisions to the required banking experience of the financial institutions commissioner, requires reporting for changes in control of bank holding companies that own a state bank, modifies the requirements for state trust companies conducting business outside of the state, and creates new provisions to establish rules of application and interpretation and establish regulatory authority of the commissioner. For more information, click here.
• On April 8, Arizona Governor Katie Hobbs signed SB 1034, which amends existing law related to money transmission. Under the revised law, licensees that engage in the business of receiving money for transmission on behalf of consumers for personal, family, or household purposes will be required to provide consumer fraud warnings containing certain information, including, but not limited to, the risks of consumer fraud, information about transmitting money to unknown person, and information about how to stop a money transmission. The revised law also sets forth certain requirements that the notice must meet and excludes certain money transmission from the consumer fraud notice requirements. For more information, click here.
• On April 8, HB1339 was signed by Virginia Governor Glenn Youngkin. The bill provides exemptions from garnishments and liens. The bill increases the amount that a householder may hold exempt from the creditor process for real or personal property that the householder or their dependent uses as a principal residence from $25,000 to $50,000. The bill also increases the amount a householder is entitled to hold exempt from the creditor process for their motor vehicle from $6,000 to $10,000. The bill also provides that such exemptions will adjust every three years based on changes in the Consumer Price Index. For more information, click here.
• On April 8, HB1248 was approved by Youngkin. The bill amends procedures related to ascertaining a judgment debtor’s estate. It would include the following provisions:
  • Clerks, to ascertain the estate of the debtor, are to issue summons against execution debtors, including (a) officers or employees of corporations and (b) any debtor to or bailee of the execution debtor if the judgment creditor files an affidavit that they know or reasonably suspect such person to have such a relationship to the execution debtor; and
  • For good cause, the court may transfer debtor interrogatory proceedings to a more convenient forum upon motion of an execution debtor or a debtor or bailee of the execution debtor.

For more information, click here.

• On April 8, Youngkin signed HB1370, which:
  • Prohibits collection entities from reporting their attempts to collect a medical debt to consumer reporting agencies.
  • Defines medical debt as any debt arising from health care services, including medical equipment. The term medical debt would not include debt charged to a credit card unless the credit card was extended solely for the purpose of purchasing health care services.

For more information, click here.

• On April 8, Youngkin signed HB845. The bill provides that, if an abandoned vehicle is found to have been titled in another jurisdiction, the Department of Motor Vehicles (DMV) must contact that jurisdiction to ascertain the requested information, unless the DMV is provided with such information by a business in possession of the abandoned vehicle that (a) acquired such vehicle from an insurance company in connection with a total loss unresolved claim, and (b) obtained information from a nationally recognized title database with access to such jurisdiction’s records about all entities having a security interest in such vehicle. For more information, click here.
• On April 5, Youngkin signed SB66. The bill prohibits towing and recovery operators from requiring an individual, who appears to retrieve a vehicle towed, to provide to the towing and recovery operator, in addition to payment of fees, any document not otherwise required by law before releasing the vehicle to the individual. For more information, click here.
• On April 4, Youngkin signed SB637. The bill requires the attorney for the Commonwealth to notify and obtain the concurrence of the clerk of the circuit court at least 30 days prior to contracting with private attorneys or private collection agencies to undertake the collection of fines, costs, forfeitures, penalties, and restitution. For more information, click here.
• On April 4, Youngkin signed SB214. The bill focuses on the process of serving garnishment summons to corporations and similar entities in the following ways:
  • Specifies how and to whom a garnishment summons must be served within corporations, limited liability companies, and other entities;
  • This bill impacts debt collectors by detailing the correct procedure for serving garnishment summons on these types of business entities; and
  • Ensures debt collectors adhere to the specified legal requirements to avoid invalid service.

For more information, click here.

• On April 4, Youngkin signed HB744 into law. The bill requires a supplier making automatic renewal or continuous service offers that automatically renew after more than 30 days and extend the automatic renewal or continuous service offer for more than a period of 12 months, to notify the consumer of the option to cancel no less than 30 days and no more than 60 days before the cancellation deadline or the end of the current contract term. In the amendments passed in the Senate, the bill also covers automatic renewal or continuous service offers to small businesses. For more information, click here.
• On April 4, Youngkin signed HB1082. The bill authorizes the court to order a restricted driver’s license to a judgment debtor who has had their license suspended for failure to satisfy certain judgments. For more information, click here.
• On April 4, Beshear signed HB15. The bill amends existing law to establish, among other things, consumer rights relating to personal data, including the rights to (a) confirm whether data is being processed, (b) to correct any inaccuracies in consumer data, (c) to delete personal data provided by the consumer, (d) to obtain a copy of the consumer’s personal data that was previously provided, and (e) to opt out of targeted advertising, the sale of data, or profiling of the consumer. The bill will take effect on January 1, 2026. For more information, click here.
• On April 4, Beshear signed HB88 into law. The bill, among other things, amends existing law to remove the prohibition against use of financial institution names in certain marketing and solicitations and establishes a civil penalty for violation its provisions. The bill also establishes a new section that prohibits the use of financial institution names in the marketing and solicitation of individuals who are not financial institutions under certain circumstances, and stipulates that a violation of these provisions constitutes an unfair, false, misleading, or deceptive trade practice. The bill also authorizes the AG to enforce its provisions. For more information, click here.
• On April 4, Wisconsin Governor Tony Evers signed SB668 into law. The bill makes several changes related to the Department of Financial Institutions’ (DFI) regulation of collection agencies, consumer lenders, and sellers of checks. Among other things, the bill authorizes DFI to use the Nationwide Multistate Licensing System and Registry (NMLSR) to administer its licensing functions. The bill also requires licensed financial services providers to keep all material information on file with DFI and the NMLSR up to date and accurate. With respect to DFI’s regulation of collection agencies, the bill, among other things, eliminates the requirement that a collector or solicitor hold a license separate from that of the collection agency that employs the collector or solicitor. The bill also amends the definition of collection agency and specifies that a separate collection agency license is required for each place of business maintained by the collection agency. The bill also makes several changes related to the regulation of consumer lenders, including, among other things, creating a definition of “consumer loan” that is similar to the definition used under the Wisconsin Consumer Act and specifying activities that require a person to be licensed as a lender. With respect to sellers of checks and money transmitters, the bill, among other things, replaces certain provisions of the previous law with new provisions, titled the Model Money Transmission Modernization Law. For more information, click here.