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 February 25, during the G20 Finance Ministers and Central Bank Governors Meeting in Bengaluru, India, India announced that a global crypto-regulatory framework is forthcoming, which will be premised on a synthesis paper expected to be jointly submitted by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to India’s G20 presidency in September. For more information, click here.

• On February 25, during an interview with Reuters at the G20 Finance Ministers and Central Bank Governors Meeting in Bengaluru, India, U.S. Treasury Secretary Janet Yellen revealed that the United States is not suggesting an “outright [ban] of crypto activities,” and it is “critical to put in place a strong regulatory framework.” For more information, click here.

• On February 24, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of Comptroller of the Currency (OCC) conveyed in the “2022 Shared National Credit (SNC) Report” that credit quality associated with large, syndicated bank loans improved in 2022, but noted the results do not fully reflect increasing interest rates and softening economic conditions that began to impact borrowers in the second half of 2022. Overall, the report found that credit risks for syndicated loans — large loans originated by multiple banks — were moderate at the end of the review period. While risks to borrowers impacted by COVID-19 have declined, they remain high for leveraged loans, as well as the entertainment, recreation, and transportation services industries. For more information, click here.

• On February 23, the Consumer Financial Protection Bureau (CFPB) took action against a web of corporate entities for violating the financial rights of military families and other consumers in providing auto title loans. The CFPB found that the entities violated the Military Lending Act by extending prohibited title loans to military families and, oftentimes, by charging nearly three times over the 36% annual interest rate cap. The CFPB ordered the company to pay more than $5 million in consumer relief and a $10 million civil money penalty. For more information, click here.

• On February 23, Board of Governors of the Federal Reserve System, the FDIC, and the OCC issued a joint statement, highlighting the purported liquidity risks associated with engaging crypto-asset sector participants that utilize cryptocurrency as a source of funding. For more information, click here.

• On February 23, the International Monetary Fund (IMF) discussed its white paper Elements of Effective Policies for Crypto Assets, which examines the purported benefits and risks of crypto-assets and possible policy solutions through a nine-element framework:

• Safeguard monetary sovereignty and stability by strengthening monetary policy frameworks and do not grant crypto-assets official currency or legal tender status.
• Guard against excessive capital flow volatility and maintain effectiveness of capital flow management measures.
• Analyze and disclose fiscal risks and adopt unambiguous tax treatment of crypto-assets.
• Establish legal certainty of crypto-assets and address legal risks.
• Develop and enforce prudential, conduct, and oversight requirements to all crypto-market actors.
• Establish a joint monitoring framework across different domestic agencies and authorities.
• Establish international collaborative arrangements to enhance supervision and enforcement of crypto-asset regulations.
• Monitor the impact of crypto-assets on the stability of the international monetary system.
• Strengthen global cooperation to develop digital infrastructures and alternative solutions for cross-border payments and finance.

For more information, click here.

• On February 22, the Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), announced a 30-basis point reduction to the annual mortgage insurance premiums (annual MIP) charged to homebuyers who obtain an FHA-insured mortgage. The premium will be reduced from 0.85% to 0.55% for most homebuyers seeking an FHA-insured mortgage, which could mean an estimated savings of $678 million for American families in aggregate by the end of 2023 alone. For more information, click here.

• On February 21, U.S. House of Representatives Majority Whip Tom Emmer (R-MN) introduced a bill, prohibiting the Federal Reserve from issuing a retail central bank digital currency (CBDC) directly to the American public. The bill — the CBDC Anti-Surveillance Act — shares similarities to a prior version introduced by Emmer in 2022. However, the updated version provides additional protections designed to prevent the Federal Reserve from issuing a retail CBDC by prohibiting both the Board of Governors and the Federal Open Market Committee from using “any central bank digital currency to implement monetary policy.” For more information, click here.

• On February 21, the FDIC, the Board of Governors of the Federal Reserve System, and the OCC published proposed regulatory reporting changes in the Federal Register for public comment. The proposed revisions to the reporting forms and instructions for the Call Reports and the FFIEC 002 relate primarily to the statutorily mandated review of the Call Reports. Section 604 of the Financial Services Regulatory Relief Act of 2006 requires that the agencies review information collected in the Call Reports to reduce or eliminate any requirement to file certain information or schedules if the continued collection of such information or schedules is no longer necessary or appropriate. The changes to eliminate and consolidate items in the Call Reports included in the attached proposal resulted from the agencies’ evaluation of user survey responses, covering all the Call Report schedules, similar to the group of surveys the agencies conducted as part of the previous statutorily mandated review. For more information, click here.

• On February 17, the FTC launched a new Office of Technology that will strengthen the FTC’s ability to keep pace with technological challenges in the digital marketplace by supporting the agency’s law enforcement and policy work. The Office of Technology will include dedicated staff and resources and will be headed by Chief Technology Officer Stephanie T. Nguyen. For more information, click here.

• On February 17, the FTC sued to stop an interconnected web of operations responsible for delivering tens of millions of unwanted Voice Over Internet Protocol and ringless voicemail phony debt service robocalls to consumers nationwide. The Department of Justice filed the complaint in federal court on the FTC’s behalf. For more information, click here.

• On February 17, the Federal Reserve updated sections of the Bank Holding Company Supervision Manual. Some changes include updates to sections on the supervision of savings and loan holdings companies; supervision of holding companies with less than $10 billion in total consolidated assets; liquidity planning and positions applicable to large financial institutions; holding company ratings applicability and inspection frequency; supervision of subsidiaries related to nondeposit investment products; control and ownership of bank holding company formations; asset securitization risk management and internal controls; retail-credit classification; supervision of savings and loan holding companies; and Bank Holding Company Act exemptions. For more information, click here.

• On February 16, the OCC issued the “Change in Bank Control” booklet of the Comptroller’s Licensing Manual, which replaces the booklet of the same title issued in September 2017. For more information, click here.

• On February 14, the Department of Veterans Affairs announced a funding fee charge update for loans closed on or after April 7. The funding fees are charged on VA transactions involving a home loan where a borrower does not qualify for a fee waiver. For more information, click here.

State Activities:

• On February 23, the Montana Senate passed SB 178 to help protect the rights of “digital asset mining businesses” that operate within the state of Montana. If the governor executes the bill, it would prohibit governmental entities from imposing arbitrary restrictions or taxes on digital asset mining businesses. Further, the bill would expressly prohibit the creation of a rate classification for digital asset mining businesses that creates “unduly discriminatory rates” for the use of electricity. For more information, click here.

• On February 22, New York attorney general’s office filed a civil enforcement action against Hong Kong-based cryptocurrency exchange CoinEx for allegedly selling commodities and securities in the form of virtual currencies without first registering with the New York AGs’ office as a commodity broker-dealer or a securities broker-dealer. Notably, in its complaint, the New York AGs’ office characterized the following cryptocurrencies as both securities and commodities: “AMP, LBC, LUNA, and RLY.” For more information, click here.

• On February 21, the New York Department of Financial Services (NYDFS) announced its enhanced ability to detect fraud and other illegal activity among New York state-regulated entities engaged in virtual currency through new insider trading and market manipulation risk monitoring tools. For more information, click here.

• On February 16, Massachusetts AG Andrea Joy Campbell announced a $2.5 million settlement with a Massachusetts-based company, resolving allegations that the company engaged in unfair, deceptive, and abusive debt collection practices in violation of the state consumer law and debt collection regulations. More specifically, the assurance of discontinuance (AOD) alleged that the company sent “Seriously Past Due” and “Final Demand” letters to consumers who failed to comply with Massachusetts regulation or otherwise violated the law by, among other things, (1) not including mandatory language informing consumers of their right to stop the company from placing debt collection calls to their place of employment; (2) including misleading threats, indicating that the company would use a debt collection agency or attorney to pursue the debt if not paid; (3) bringing lawsuits against consumers in a forum inconvenient for the vast majority of its consumers, which allowed the company to obtain default judgments against the consumers who could not get to the forum to defend the action; and (4) making false and misleading representations about the extent or amount of their debts. The AOD also alleged the company violated MassHealth regulations by, for example, charging the full value of equipment to MassHealth members, even when MassHealth had already paid part of the equipment balance. Under the terms of the settlement, the company must vacate every judgment it obtained against consumers in the Leominster District Court (the improper forum in many instances), subject to certain conditions, in addition to paying the $500,000 to the state. An estimated $2.1 million worth of judgments are expected to be vacated. For more information, click here.