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 8, the Consumer Financial Protection Bureau (CFPB) published a blog post seeking consumer input on experiences with the closing process of consumer mortgages, and in particular, closing costs. The blog post posited that closing costs significantly impact a borrower’s financial commitment and, potentially, monthly payments and identified a “noticeable increase” in closing costs, with median total loan expenses on home purchase loans increasing by 21.8% between 2021 and 2022. For more information, click here.
• On March 7, Axios reported that Senators Cynthia Lummis and Kirsten Gillibrand are working on legislation aimed at regulating stablecoins and providing clarity and protection for investors in this growing sector of the cryptocurrency market. Drawing on expertise from key governmental bodies, the proposed legislation seeks to establish a comprehensive framework for stablecoin governance. This is not the first time the senators have tackled cryptocurrency regulation, having previously announced efforts to introduce legislation aimed at regulating digital assets. Senator Lummis, a vocal supporter of Bitcoin, has been more critical of stablecoins, particularly Tether, and has opposed central bank digital currencies. The senators’ collaborative efforts represent a significant step toward addressing the regulatory challenges posed by the rapidly growing stablecoin sector. For more information, click here.
• On March 6, the Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam called on Congress to pass legislation addressing regulatory jurisdictions in the crypto industry. During an annual appearance before the House Agriculture Committee, Behnam emphasized the need to fill the regulatory gap in crypto, particularly around Bitcoin, which he affirmed is a commodity. He also referred to Bitcoin and Ether as the two largest tokens, accounting for approximately 60-70% of the total crypto market capitalization. Behnam expressed confidence that, if Congress passes the Financial Innovation and Technology Act for the 21st Century (FIT Act), the CFTC could establish a regulatory framework within 12 months. He further clarified that if a digital asset is not a security, it is classified as a commodity. For more information, click here.
• On March 5, the SEC charged Shapeshift AG with operating without proper registration, sparking debate on crypto regulation. The SEC alleged that Shapeshift violated Section 15(a) of the Securities Exchange Act of 1934 by facilitating trades in crypto assets without registration. The charges highlight the ambiguity in crypto asset classification and regulatory expectations. SEC Commissioners Hester Peirce and Mark Uyeda criticized the SEC’s approach, arguing that it adds to the ambiguity in the crypto space and hinders innovation. They called for clearer guidance on which assets are considered securities and a more transparent approach to regulation that supports market participants. For more information, click here.
• On March 5, the CFPB finalized a rule to cut excessive credit card late fees by closing a loophole exploited by large card issuers. The rule will curb fees that cost American families more than $14 billion a year. The CFPB estimates that American families will save more than $10 billion in late fees annually once the final rule goes into effect by reducing the typical fee from $32 to $8. This will be an average savings of $220 per year for the more than 45 million people who are charged late fees. For more information, click here.
• On March 4, the Small Business Administration (SBA) announced the next generation of the SBA’s Lender Match tool for small businesses to connect to capital through SBA’s network of approved banks and private lenders. The enhanced Lender Match will provide Americans seeking funding to start and grow their businesses with a simple, online tool that will more effectively match them with the SBA’s competitive lending products and additional offerings from a trusted network of banks and private lenders. For more information, click here.
• On March 1, the U.S. Department of Energy (DOE) agreed to discontinue its emergency cryptocurrency mining survey following a settlement with a cryptocurrency company. The company had claimed that the survey, initiated by the DOE in January, did not comply with statutory and regulatory requirements. The settlement, approved by the U.S. District Court for the Western District of Texas, also stipulated that the DOE would destroy any information already collected and will follow notice-and-comment procedures for future data collection. Additionally, the DOE agreed to pay $2,199.45 toward the plaintiff’s litigation expenses and will publish a new Federal Register notice for proposed information collection. For more information, click here.
• On February 29, the Federal Housing Finance Agency (FHFA) announced updates to the implementation of new credit score requirements for single-family loans acquired by Fannie Mae and Freddie Mac. For more information, click here.
• On February 26, the Office of Inspector General for the CFPB released a report titled, “The CFPB Can Enhance Certain Practices to Mitigate the Risk of Conflicts of Interest for Division of Supervision, Enforcement and Fair Lending Employees.” The report found that the CFPB’s Office of Supervision Examinations (OSE) does not have a formal policy that requires bank examiners to rotate assignments in a specified time frame. For more information, click here.

State Activities:

• On March 11, California Attorney General (AG) Rob Bonta announced his support for SB 1061, a bill proposed by State Senator Monique Limon. If enacted, the bill would, among other things, prohibit medical debts from being reported on consumers’ credit reports. The bill would even prohibit credit reporting agencies from accepting information about consumers’ medical debts. In its current form, the bill does not appear to specify what debts will qualify as a “medical debt” under its provisions. With this bill, California seeks to join several other states that have now banned reporting of consumers’ medical debts on their credit reports. For more information, click here.
• On March 8, Wyoming enacted the Decentralized Unincorporated Nonprofit Association Act (DUNAA). DUNAA introduces a new corporate form known as Decentralized Unincorporated Nonprofit Associations (DUNAs), and allows token mergers, conversion of token projects into corporations, and the recognition of smart contracts as legal contracts. In particular, DUNAA allows companies to formalize crypto dealings and confer limited liability on their members, potentially representing one of the most radical changes in corporation law since the advent of the internet. The law also allows DUNAs to say that “the smart contract is the contract” without needing to provide plain-language equivalents. Critics argue that the new law could create a new realm of legal uncertainty, particularly in applying traditional contract law principles to hard-coded arrangements. For more information, click here.
• On March 7, Nebraska Governor Jim Pillen signed LB139. The bill updates the jurisdictional amounts of small claims courts to $6,000 from July 1, 2024, through June 30, 2025. The jurisdictional amount is $7,500 beginning July 1, 2025. For more information, click here.
• On March 6, New Hampshire Governor Chris Sununu signed Senate Bill 255 into law, making New Hampshire the 14th U.S. state to enact a comprehensive privacy law. The law, which becomes effective on January 1, 2025, is only enforceable by the state AG, and provides a 60-day cure period for compliance violations for one year after enactment. After that, beginning on January 1, 2026, the AG will have the discretionary power to provide any cure period. For more information, click here.
• On March 6, the Oregon legislature passed the Family Financial Protection Bill, which will now be placed before Governor Tina Kotek for signature or veto. The bill amends current state law that establishes what portions of a consumer’s financial assets can be garnished to satisfy a judgment. If the bill is ultimately enacted, it would, among other things: (a) increase the amount of wages protected from garnishment; (b) shield $2,500 of funds in a consumer’s bank account; (c) increase protections to guard consumers from losing their homes during debt collection proceedings; (d) increase consumer protection under the state’s Unfair Debt Collection Practices Act; (e) lengthen the statute of limitations period for consumers to initiate lawsuits related to debt collection practices; and (f) protect consumers from unfair attorney’s fees related to lawsuits for unlawful collection practices. For more information, click here.
• On March 4, New York AG Letitia James released a list of the top 10 consumer complaints that the Office of the Attorney General received in 2023. James released the list at the start of Nation Consumer Protection Week and included with the list several tips to help consumers avoid falling victim to common scams. According to the list, the greatest number of consumer complaints filed in 2023 related to online purchases, price gouging, retail sales, defective merchandise, poor customer service, pet stores, and animal breeders. The second and third largest categories of complaints filed by New York consumers in 2023 were landlord/tenant complaints and automobile-related complaints. For more information, click here.
• On February 29, eight state AGs filed an amicus brief in the SEC’s enforcement action against Kraken. The eight AGs, led by the Montana AG, warned that the SEC’s enforcement action overstepped the agency’s delegated powers in its attempt to regulate “nonsecurities.” The AGs further argued that the SEC’s exercise of authority puts consumers at risk by potentially preempting state statutes, which are better tailored to the risks associated with nonsecurities products. This is especially true, the AGs allege, since in many cases, state law may offer more protections to consumers than federal laws. For more information, click here.