Troutman Pepper Weekly Consumer Financial Services Newsletter - August 2022 #2

Troutman Pepper

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 August 7, the U.S. Senate passed the Inflation Reduction Act, which is supported by the U.S. Department of the Treasury. The Inflation Reduction Act incorporates tax policy that will collect more from top earners and large corporations. Taxes due or paid will not increase for any family making less than $400,000 a year. For more information, click here.
  • On August 4, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra spoke at the Philadelphia Federal Reserve Bank’s Sixth Annual Fintech Conference, arguing that enforcement actions, rather than financial literacy efforts, were necessary to prevent consumer abuse. Chopra said that while there is value in educating consumers to spot risks and find trustworthy advice, financial products are inherently challenging to understand. “Disclosures are not going to be what’s fixing it,” Chopra said. “What is often going to fix it is to eradicate unlawful actors who really prey on people.” For more information, click here.
  • On August 4, the Federal Trade Commission announced that it will send payments totaling more than $1 million to 1,966 consumers harmed by a phantom debt collection scheme that conned consumers into paying debts they did not owe. Consumers will recover all the money they lost to the scammers, averaging $516 for each payment. For more information, click here.
  • On August 3, U.S. Senators Debbie Stabenow (D-MI), John Boozman (R-AR), Cory Booker (D-NJ), and John Thune (R-SD) introduced the Digital Commodities Consumer Protection Act of 2022 to give the Commodity Futures Trading Commission (CFTC) new tools and authorities to regulate digital commodities. The bill would give the CFTC direct oversight over cryptocurrencies that qualify as “digital commodities,” which would include bitcoin and ether. For more information, click here.
  • On August 3, U.S. Senators Rob Portman (R-OH), Pat Toomey (R-PA), Mark Warner (D-VA), Cynthia Lummis (R-WY), and Kyrsten Sinema (D-AZ) introduced legislation to clarify the digital asset reporting requirements signed into law as part of last year’s Infrastructure Investment and Jobs Act. In August 2021, the senators announced an agreement with the Treasury Department on an infrastructure package amendment that would have clarified the definition of “broker” as to who must report to the government information about a digital asset transaction. The amendment specifically excluded from reporting requirements services like mining and wallet providers who do not take custody of other individuals’ cryptocurrency, nor are able to comply with the reporting requirements of a broker. The Senate never received the opportunity to vote on and pass this amendment last August due to a procedural hurdle. The legislation introduced is the exact same text introduced as a bipartisan amendment nearly one year ago. For more information, click here.
  • On August 2, the American Bankers Association, Consumer Bankers Association, Credit Union National Association, Housing Policy Council, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, National Bankers Association, and The Clearing House Association petitioned the CFPB to extend its supervision to “data aggregators.” For more information, click here.
  • On July 29, the Bank Policy Institute and the American Bar Association issued a letter to Congress to oppose language, creating a designation for “systemically important entities,” added to the House bill as Floor Amendment 554. The letter stated that: “Financial institutions are supportive of efforts to improve the identification and risk assessment of critical infrastructure but believe the provision, as written, would duplicate existing designations without addressing gaps in government efforts to help protect private critical infrastructure from national security threats.” For more information, click here.

State Activities:

  • On August 3, New York Attorney General Letitia James urged the U.S. Department of Transportation (DOT) to take action to address widespread airline cancelations and delays, which have disrupted travel plans for millions of consumers nationwide. According to an accompanying press release, “during the first half of 2022, 2.8 percent of flights were canceled, a 33 percent increase from the same time in 2019.” Attorney General James went on to state, “Airlines knowingly advertising and booking flights they do not have the adequate staff to operate are flying in the face of the law.” For more information, click here.
  • On August 2, New York Attorney General Letitia James joined a coalition of 50 attorneys general to form a nationwide, bipartisan Anti-Robocall Litigation Taskforce to investigate and take legal action against telecommunications companies responsible for enabling a majority of foreign robocalls into the United States. According to the press release, the taskforce will work together to reduce illegal robocalls made nationwide. “Robocalls are more than just a nuisance, they are used to scam seniors and defraud consumers,” said Attorney General James. “Across the country, phones are ringing off the hook with robocalls that sound legitimate but are actually a fraud.” For more information, click here.
  • On August 1, New York Attorney General Letitia James issued an investor alert, urging any New Yorker deceived or affected by the cryptocurrency crash to contact her office. Attorney General James also “encourage[d] workers in the cryptocurrency industry who may have witnessed misconduct or fraud to file a whistleblower complaint with her office, which can be done anonymously.” For more information, click here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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