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 October 4, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) issued a press release documenting its collaborative central bank digital currency (CBDC) cross-border payment pilot project with Capgemini, which accomplished facilitating real-time gross settlement CBDC-to-CBDC transactions between different distributed ledger networks run on Quorum and Corda. For more information, click here.
• On October 4, the Consumer Financial Protection Bureau (Bureau) filed an enforcement action against Choice Money Transfer for allegedly violating the Remittance Transfer Rule and the Electronic Fund Transfer Act (EFTA) by failing to accurately disclose important prepayment information to remittance senders and maintaining deficient recordkeeping practices, which made it difficult for consumers to dispute erroneous transactions and receive a refund of certain fees. For more information, click here.
• On October 4, the Federal Housing Administration (FHA) issued a request for information (RFI) on how it can increase access to small balance mortgages through its single-family mortgage insurance programs, which generally apply to mortgages with an original principal obligation of $70,000 or less. In conjunction with the RFI, the U.S. Department of Housing and Urban Development (HUD) released a report titled Financing Lower-Priced Homes: Small Mortgage Loans, which highlighted the challenges faced by borrowers who need loans to purchase lower-priced homes. For more information about the RFI, click here. For more information about the HUD report, click here.
• On October 3, the Federal Reserve finalized updates to Regulation II (Final Rule), which establishes standards for assessing whether a debit card interchange fee received by a debit card issuer for an electronic debit transaction is reasonable and proportional to the costs incurred by the issuer with respect to the transaction. Like the proposed rule issued in 2021, the final rule requires debit issuers to enable unaffiliated payment card networks across all transaction types, including but not limited to online (card-not-present) transactions. For more information, click here.
• On October 3, the U.S. Financial Stability Oversight Council (FSOC) released its Report on Digital Asset Financial Stability Risks and Regulation, which was issued in response to President Biden’s Executive Order 14067, Ensuring Responsible Development of Digital Assets. The report identified three gaps in the regulation of crypto-asset activity in the United States: (1) the spot markets for crypto-assets that are not securities are subject to limited direct federal regulation; (2) crypto-asset businesses do not have a consistent or comprehensive regulatory framework and can engage in regulatory arbitrage; and (3) a number of crypto-asset trading platforms have proposed offering retail customers direct access to markets by vertically integrating the services provided by intermediaries such as broker-dealers or futures commission merchants. For more information, click here.
• On October 3, the Consumer Bankers Association, American Bankers Association, Bank Policy Institute, and The Clearing House expressed their collective disagreement with a report by Sen. Elizabeth Warren (D-MA) regarding the prevalence of fraud on Zelle, the popular peer-to-peer (P2P) payment service. In the statement, the banking groups stated “Today’s report from Sen. Warren fails to acknowledge that 99.9% of the 5 billion transactions processed on the Zelle network in the past 5 years were sent without any report of fraud or scams. Zelle has soared in popularity with bank customers because it’s fast, free and easy to use. Customers also take comfort in knowing that Zelle transactions are provided by and through their trusted bank.” For more information, click here. 
• On September 30, the Federal Deposit Insurance Corporation (FDIC) released a list of orders of administrative enforcement actions taken against banks and individuals in August 2022. For more information, click here.
• On September 30, the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury released guidance entitled Sanctions Compliance Guidance for Instant Payments, which suggested financial institutions should implement risk-based approaches to manage sanction risks and, to the extent possible, deploy innovative sanctions compliance technologies to eliminate such sanction risks. For more information, click here.
• On September 30, OFAC entered a settlement with Tango Card, Inc., a gift card distributor, in the amount of $116,048.60 for potential civil liability arising from Tango’s alleged transmission of 27,720 gift cards (an economic benefit totaling $386,828) to individuals with IP addresses associated with Cuba, Iran, Syria, Ukraine, and North Korea, which are sanctioned jurisdictions. For more information, click here.

State Activities:

• On October 4, New York Attorney General Letitia James provided $2 million to Erie County to strengthen consumer protection laws in western New York. James secured the funds in an action against several companies accused of engaging in predatory debt collection practices nationwide. A portion of the funds will be used to hire a full-time, in-house counsel in the Erie County Consumer Protection Office. The county thanked James, stating that it “will now be able to better investigate consumer complaints and improve [its] ability to educate [its] residents about predatory and unlawful businesses.” For more information, click here.
• On October 3, Florida Attorney General Ashley Moody issued a consumer fraud alert to Florida residents regarding the potential for disaster scams, price gouging, and fraud in the wake of Hurricane Ian. Moody warned residents that qualified contractors are generally in “high demand,” leaving room for out-of-state scammers to prey upon Floridians in need of expert services. Moody gave residents a list of tips for avoiding a scam, including, for example, researching the company’s reputation and making sure the company is bonded and verified with a bonding agency. Additionally, on October 5, Moody announced she will send consumer protection investigators to parts of Florida to assist with protecting vulnerable consumers. For more information, click here.
• On October 1, amendments to the Maryland Personal Information Protection Act took effect. Some of the changes include (1) expanding the scope of the statute to include businesses that maintain personal information of Maryland residents, as opposed to only those that own or license such information; (2) requiring specific information that must be disclosed in a company’s notice to the Maryland Attorney General of a security breach; (3) shortening the period of time a business that maintains personal information on behalf of a data owner has to notify the owner of a security breach from 45 days to 10 days; and (4) expanding the nature of information that will be considered protected genetic information under the statute. For more information, click here.
• On September 28, California Gov. Gavin Newsom approved Senate Bill 786, which requires vital records offices in the state to allow for the use of blockchain technology and verifiable credentials. The change will allow Californians to receive PDFs of birth, death, and marriage records immediately, as opposed to a standard 10-day postal delivery. The senator responsible for introducing the bill, Sen. Robert Hertzberg, argued that blockchain technology is a “faster, cheaper, more efficient delivery method” for Californians that is “more secure” because it “is nearly impossible to hack.” For more information, click here.