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 March 29, the Consumer Financial Protection Bureau (CFPB) published its annual report analyzing complaints submitted by consumers to the CFPB between January and December 2023. For more information, click here.
• On March 28, a federal district court granted the CFPB’s motion to transfer a lawsuit challenging its credit card late fee to a federal court within the District of Columbia. For more information, click here.
• On March 27, the Ninth Circuit Court of Appeals reinstated a putative class action accusing Apple of violating California’s Unfair Competition Law (UCL) and Maryland’s Consumer Protection Act (MCPA). The class alleged that after downloading an app called Toast Plus from Apple’s iOS App Store, which required them to disclose the private keys associated with their digital asset wallets, they found that Toast Plus, which functioned as a “phishing” version of the legitimate Toast Wallet app, absconded with their digital assets. On balance, Apple argued that the limitation of liability provision contained in its App Store’s terms and conditions states that Apple is not liable for damages “arising out of or related to use of” third-party apps. The district court agreed with Apple and held that the limitation of liability provision was valid and enforceable, and dismissed the class’ UCL and MCPA claims. On appeal, the Ninth Circuit reversed the district court’s decision. Because the class alleged that Apple made affirmative misrepresentations about the safety of its App Store, the Ninth Circuit held that Apple could not, through the limitation of liability provision, disclaim liability for its own false, misleading, or fraudulent statements. For more information, click here.
• On March 27, the CFPB issued a new circular warning remittance transfer providers that false advertising about the cost or speed of sending a remittance transfer can violate federal law. Companies in the marketplace are charging junk fees on international money transfers and making false claims about the speed of transfers. The circular highlights several marketing practices relating to sending international money transfers that may violate the Consumer Financial Protection Act’s (CFPA) prohibition on deceptive acts or practices. This prohibition is enforced by the CFPB, states, and other regulators. Guidance in the circular applies both to traditional providers of international money transfers and to “digital wallets” that offer the capability to send money internationally from the U.S. For more information, click here.
• On March 27, CFPB Director Rohit Chopra gave prepared remarks at an industry conference, with a focus on fair competition in the consumer credit card market. Chopra discussed the effect credit card fees have on consumer debt: “Total outstanding credit card debt has surpassed $1 trillion, and CFPB data shows that consumers paid more than $130 billion in interest and fees in 2022, including more than $25 billion in fees. And persistent debt is a growing problem: many households are paying more in interest and fees than they pay toward the principal each year.” According to Chopra, “The fact that prices have risen, or that consumers are struggling, merit a closer look by the CFPB. And recent data and research has raised serious questions about how competition is working, or not working, in the credit card market. Given the size of the market and its importance in consumers’ lives, the stakes are high.” For more information, click here.
• On March 27, the Office of the Comptroller of the Currency (OCC) reported cumulative trading revenue of U.S. commercial banks and savings associations of $11.6 billion in the fourth quarter of 2023. The fourth quarter trading revenue was $1.6 billion, or 11.8%, less than in the previous quarter and $2 billion, or 20.4%, more than a year earlier. For more information, click here.
• On March 26, the Federal Reserve Board released the 2023 combined annual audited financial statements for the Federal Reserve Banks. An independent public accounting firm issued unqualified opinions, asserting that its audit found the financial statements for the Board, the 12 Federal Reserve Banks, and three limited liability companies (LLCs), to be free of material misstatements in accordance with the applicable auditing standards. For more information, click here.
• On March 26, the CFPB announced its release of an agency-specific action statement that, among other things, sets forth the CFPB’s short-term goals regarding its evaluation of the usage of transformative technologies in consumer finance markets: (1) embed more technologists across the CFPB’s core functions; (2) conduct research and analysis on emerging technologies; and (3) advance competitive marketplaces and assist law abiding market participants. For more information, click here.
• On March 26, the U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) announced parallel enforcement actions against foreign digital asset exchange KuCoin and its founders, Chun Gan and Ke Tang, for conspiring to operate an unlicensed money transmitting business, conspiring to violate the Bank Secrecy Act by willfully failing to maintain an adequate anti-money laundering program, and by soliciting and accepting orders for commodity futures, swaps, and leveraged, margined, or financed retail commodity transactions without registering with the CFTC as a futures commission merchant. For more information about the DOJ’s enforcement action, click here. For more information about the CFTC’s enforcement action, click here.
• On March 25, the OCC announced it will host a public meeting of the Minority Depository Institutions Advisory Committee (MDIAC) on Tuesday, April 16. The meeting, which will be hosted in person and virtually, is open to the public and will begin at 8:30 a.m. EDT. For more information, click here.
• On March 25, the U.S. Department of the Treasury’s Office of Foreign Assets Control sanctioned 13 entities and two individuals for operating in the financial services and technology sectors of the Russian Federation economy. Three of the entities sanctioned were issuers of digital assets. For more information, click here.
• On March 25, the Office of the Inspector General for the Federal Deposit Insurance Corporation (FDIC) issued a Failed Bank Review memorandum that discusses a bank collapse that resulted in a $14.8 million loss to the FDIC’s Deposit Insurance Fund and constituted 23% of the bank’s $65 million in total assets. For more information, click here.
• On March 25, while providing remarks at the Consumers Bankers Association, Acting Comptroller of the Currency Michael J. Hsu discussed fairness and effective compliance risk management in banking and noted that “[b]anks’ deployment of more and better resources can improve the effectiveness of their compliance risk management programs, as can their adoption of modern technologies.” For more information, click here.
• On March 21, the Board of Governors of the Federal Reserve System (Fed), the OCC, and the FDIC jointly issued an interim final rule that amends, and requests comment on, the applicability date of the facility-based assessment areas provision and public file provision included in the 2023 CRA Final Rule. For more information, click here.

• On March 21, the FDIC issued a request for comment on its proposed Statement of Policy on Bank Merger Transactions that is relevant to all insured depository institutions. The proposed Statement of Policy would replace the FDIC’s current Statement of Policy and integrate a principles-based overview that describes the FDIC’s administration of its responsibilities under the Bank Merger Act. For more information, click here.
• On March 19, the Federal Housing Authority issued Mortgagee Letter 2024-04 to implement the provisions of a final rule titled “Changes in Branch Office Registration Requirements.” The final rule will eliminate the requirement for mortgagees to register branch offices where they conduct FHA business and change applicable fees for branch offices. For more information, click here.
• On March 18, the National Automated Clearinghouse Association announced rule amendments intended to reduce incidents of fraud such as business email compromise scams that make use of credit-push payments. For more information, click here.

State Activities:

• On March 28, New York Attorney General (AG) Letitia James announced settlements worth more than $1.9 million against several car dealerships, resolving claims the that the dealerships falsified the price of vehicles or added junk fees when consumers attempted to purchase the leased vehicles at the end of the leasing term. In some instances, according to the AG’s investigation, consumers were overcharged as much as $7,000 on an $18,000 vehicle. As a part of the settlement agreement, the dealerships will collectively pay more than $1.6 million to consumers as restitution and a civil penalty of $340,000. For more information, click here.
• On March 28, North Carolina AG Josh Stein, along with seven other AGs, urged a federal court sitting in Texas to take more stringent action against the owner of an illegal robocall operation. In support of their request, the AGs assert that the “defendant has repeatedly violated the court’s order and continued to make harmful scam calls.” Stein obtained judgments on behalf of North Carolinians last year against the robocall operation, which enjoined the company from placing deceptive and abusive robocalls to consumers. However, the company continued to make such calls despite the existence of a permanent injunction. Moreover, the owner of the robocall operation has reportedly established three new businesses through which he has engaged in telemarketing and facilitated robocalls. The AGs are seeking dissolution of the defendant’s telephone service companies, along with a payment of $122 million. For more information, click here.
• On March 27, SB450 was signed by Wisconsin Governor Tony Evers (D). The bill updates the Uniform Fraudulent Transfer Act to the Uniform Voidable Transactions Law. Under current law, a creditor may challenge certain transfers of property or obligations incurred by a debtor that may deprive the creditor of assets that would otherwise be available to satisfy debts if the debtor is or is about to become insolvent, such as the transfer of the debtor’s assets to a family member or corporate insider. For more information, click here.
• On March 25, three trade groups filed a lawsuit in federal court against the Colorado AG and the administrator of the Colorado Uniform Consumer Credit Code to prevent the enforcement of Section 3 of House Bill 23-1229, which attempts to opt Colorado out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980. Section 521 provides that a state-chartered bank may lend nationwide at rates up to the higher of (i) its home state’s interest caps, or (2) a federal interest-rate cap (1% above a specific Federal Reserve discount rate). For more information, click here.
• On March 22, the governor of Wisconsin enacted SB 628, which permits financial service providers to refuse or delay financial transactions when financial exploitation of a vulnerable adult (defined as an individual who is 65 years of age or older) is suspected. For more information, click here.
• On March 22, H179 was signed by Florida Governor Ron DeSantis (R). The bill, affecting automobiles, requires the following, among other provisions:
  • Towing-storage companies must make a “good faith effort” to establish the prior state of registration and title of a vehicle or vessel that has been towed or stored by the company. This would include, among other things: (1) a check of the department’s database for the owner and any lienholder; (2) a check of the electronic National Motor Vehicle Title Information System to determine the state of registration when there is not a current registration record for the vehicle or vessel on file with the department; and (3) a check of the law enforcement report to determine whether an out-of-state address is indicated from driver license information;
  • Towing-storage operators may only charge certain fees, including any lien release administrative fee;
  • If an approved third-party service cannot obtain the vehicle’s owner, lienholder, and insurer information, the towing-storage operator must contact the Department of Highway Safety and Motor Vehicles, or another appropriate agency of the state of registration, if known, within 24 hours through electronic communications, giving the full description of the vehicle; and
  • A towing-storage operator must retain records produced for all vehicles or vessels recovered, towed, stored, or released, for three years.
  For more information, click here.
• On March 21, Wisconsin Governor Tony Evers approved SB628 relating to financial exploitation of vulnerable adults. The bill permits (but does not require) a financial service provider to refuse or delay transactions if such provider reasonably suspects that financial exploitation of a vulnerable adult has occurred or been attempted. Under the bill, “financial service provider” includes financial institutions, mortgage bankers and brokers, other types of lenders, and check cashing services. The bill also allows a financial service provider to refuse or delay a transaction if an elder-at-risk agency, adult-at-risk agency, or law enforcement agency notifies the financial service provider that exploitation of a vulnerable adult may have occurred. The bill requires financial service providers to give certain notice if they refuse or delay a transaction due to suspected exploitation. The bill also grants a financial service provider immunity from criminal, civil, and administrative liability for all of the following: (1) refusing or not refusing, or delaying or not delaying, a financial transaction; (2) refusing to accept or accepting power of attorney; (3) contacting a person or not contacting a person to convey a suspicion of financial exploitation; and (4) any action based on a reasonable determination related to the preceding items 1 to 3. For more information, click here.
• On March 21, AB574 was signed by Wisconsin Governor Tony Evers (D). The bill regulates companies that provide earned wage access services in the state to consumers and requires such companies to be licensed by the Division of Banking in the Department of Financial Institutions before providing those services. This requirement applies even if the provider is not physically located in this state, such as when the provider conducts business by means of a website. There is an exemption for financial institutions and their affiliates. A similar bill, SB579, was introduced by Wisconsin State Senator Rob Stafsholt (R) and 14 other Republicans on October 30, 2023. For more information, click here.
• On March 18, the governor of Utah signed House Bill 118 into law. The novel bill protects digital asset holders from being compelled to produce their private keys in any civil, criminal, administrative, legislative, or other proceeding in the state “that relates to a digital asset, digital identity, or other interest or right to which the private key provides access.” On its face, the law is unclear about its application to civil or criminal proceedings that do not “relate[] to a digital asset,” such as a prosecution where criminal proceeds were paid in crypto. The law also provides an exception permitting disclosure of a private key to be compelled where “a public key is unavailable.” The law goes into effect on May 1. For more information, click here.