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 November 9, while at the New York Bankers Association’s Financial Services Forum, Federal Reserve Governor Michelle Bowman spoke about the current state of the banking regulatory framework and disclosed that “[t]he current framework represents a risk-based, tailored approach, which strives to align regulation with institution and activity risk, fulfilling the congressional mandate to tailor the prudential regulatory framework.” For more information, click here.
• On November 9, the Department of Education (DOE) announced its plan to implement an oversight strategy of federal student loan servicers that provides several pathways for identifying problems that can harm borrowers, in real-time. For more information, click here.
• On November 8, while at the Central Bank of Ireland, Federal Reserve Governor Lisa D. Cook spoke about financial stability and how “asset valuations have generally risen notably above their historical levels” this year. For more information, click here.
• On November 8, the European Banking Authority issued draft guidelines defining how stablecoin issuers should structure their risk and management recovery plans concerning reserve assets. In relevant part, the guidelines state “… [a]ll issuers should consider carefully the type of events that may lead to a breach of the regulatory requirements applicable to the reserve of assets.” For more information, click here.
• On November 8, the G7 met in Tokyo, Japan to discuss competition in digital markets with the aim of promoting competitive markets and effective competition law enforcement. According to the G7, “[w]hile new, transformative technologies can encourage more competitive markets, there is also potential competition harm” as “[a]nticompetitive mergers or exclusionary conduct can quickly tip emerging digital markets and give one or a few dominant firms control over developing technologies.” For more information, click here.
• On November 7, the Commodity Futures Trading Commission (CFTC) announced that, in 2023 alone, the cumulative penalty amount stemming from consent orders it entered with digital asset-based companies totaled $4.3 billion. For more information, click here.
• On November 7, the Consumer Financial Protection Bureau (CFPB) issued a proposed rule with request for public comment to amend the existing regulations defining “larger participants” the CFPB supervises by adding a new section to define larger participants that offer digital wallets, payment applications, and similar services. For more information, click here.
• On November 6, the Bank of England, Financial Conduct Authority, and Prudential Regulation Authority issued guidance explaining how current and proposed regulatory regimes governing “e-money, stablecoins, and tokenised bank deposits” will interact, indicating that applicable financial institutions will be subject to dual or triple regulation. For more information, click here.
• On November 6, the Federal Reserve published participant data from its October 2023 Senior Loan Officer Survey on Bank Lending Practices. For more information, click here.
• On November 3, the Financial Stability Oversight Council (FSOC) voted to issue final versions of a new analytic framework for financial stability risks and updated guidance on the council’s nonbank financial company determination process. The updated analytic framework for nonbank financial company determinations sets forth FSOC’s procedures for considering whether to designate a nonbank financial company for Federal Reserve supervision and prudential standards under section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For more information, click here.
• On November 2, the Federal Housing Administration (FHA) announced its publication of updated appraisal requirements for valuation of certain manufactured homes. The new appraisal requirements require appraisers to use the most appropriate site-built-home comparable sales when there are less than two comparable sales of these certified manufactured homes available. For more information, click here.

State Activities:

• On November 9, the State of Minnesota enacted a bill, Chapter 70 — S.F.No. 2995, to amend various statutory provisions related to health care in the state. The revisions address a variety of medical issues and concerns, such as prescription contraceptives, long COVID, mental health, and childcare. One revision now requires hospitals to complete a screening process to determine whether a particular patient is eligible for charity care before taking certain action, such as enrolling the patient in a payment plan or referring the account to in-house or third-party collections, on the patient’s account. Another revision makes it mandatory for hospitals seeking to garnish a patient’s wages or bank accounts to include with the summons and complaint initiating such action an “affidavit of expert review” making various certifications. Such certifications include, for example, confirmation that there is a reasonable basis to believe that the patient owes the debt and that the hospital has properly billed all known third-party payors. For more information, click here.
• On November 8, California’s Department of Financial Protection and Innovation (DFPI) announced it was seeking comments on the state’s Debt Collection Licensing Act (DCLA). On July 15, 2022, DFPI released a draft text related to the scope, annual report, and document retention requirements of the DCLA for public comment. DFPI is proposing additional changes for a second round of public comments. The current draft concerns only the scope and document retention requirements of the DCLA. Annual report requirements will be adopted through a separate rulemaking. Among other things, the updated draft includes the following:
  
  ○ Employees of debt collectors are not required to be licensed under the DCLA when acting within the scope of their employment by a licensed debt collector;
  
  ○ A creditor, including a provider of nonfinancial services, seeking repayment in its own name of consumer debt arising from a consumer credit transaction between itself and a customer is not engaged in the business of debt collection for purposes of licensure, except in certain circumstances;
  
  ○ Licensees shall make and preserve a record of any contact with a debtor, regardless of who initiated the contact;
  
  ○ Licensees shall keep and maintain a list of all training, performance, and interactions with debtors;
  
  ○ Licensees shall keep all records of fees, interest, and any charges on debtor accounts accrued since acquisition; and
  
  ○ Licensees shall keep records establishing that the licensee is no longer attempting to collect on accounts that have been resolved and showing the consumer has been informed of the resolution.
• DFPI invites interested parties to submit comments, including comments describing the potential financial impact of the draft regulations, by January 15, 2024.
  
  For more information, click here.

• On November 7, B25-0508 was approved by the Council by a vote of 13-0. As the “Public Health Emergency Credit Alert Temporary Amendment Act of 2023,” signed by the Mayor on October 11, has not finished its 30-day congressional review, the Council sought to introduce and pass a bill to prevent a gap between the expiration of the emergency act and the effective date of the temporary act. This bill would allow consumers to request that credit reporting agencies include a statement with their credit reports to indicate they were financially impacted by the COVID-19 pandemic. An emergency amendment, B25-0550, was also approved on the same day by a vote of 13-0. For more information, click here.
• On November 3, Colorado State Attorney General Phil Weiser announced that state regulators reached an agreement with a Florida-based debt management company over violations of the Colorado Debt Management Services Act. State law obligates debt management companies to include consumer protections in their agreements and requires companies to provide consumers with a signed agreement. In this case, the debt management company failed to sign and date its agreements, and must now issue partial refunds for fees collected. Under the terms of the agreement, the company will refund more than $110,000 to consumers. For more information, click here.