Banking & Consumer Finance

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Banking & Consumer Finance

TOP STORY—M.D. Pa.: Consumer’s putative class action dismissed where bank withdrawal fees did not violate Regulation D

The bank was “fully transparent,” and nothing about Federal Reserve Board Regulation D (Reg D) prevented the bank from assessing withdrawal fees in excess of the fee “floor” that Regulation D established in order to stabilize bank deposits on hand. T...

TOP STORY—M.D. Pa.: Consumer’s putative class action dismissed where bank withdrawal fees did not violate Regulation D
FINANCIAL STABILITY—FDIC Publishes 2022 Risk Review
May 23, 2022
Joe Cox, J.D.

The annual report highlights emerging risks within the banking system, particularly for community banks. The Federal Deposit Insurance Corporation has released its annual Risk Review, which discusses emerging threats and risks within the banking syst...

FINANCIAL STABILITY—Treasury Department releases G-7’s ‘communiqué’ summarizing its recent meeting in Germany
May 23, 2022
Thomas G. Wolfe, J.D.

The G-7 finance ministers and central bank governors, who were joined by leaders of other prominent international groups, not only reported on their “concrete actions to deepen multilateral economic cooperation” and bolster global financial stability...

REGULATION TRACKER—Upcoming comment deadlines and effective dates
May 23, 2022
WK Editorial Staff

Comment deadlines and effective dates for regulatory activity issued by the federal financial institution agencies. The Banking and Finance Law Daily Regulation Tracker includes a Proposed Rules Comment Calendar and a table of Final Rule Effective Da...

CHECKS AND ELECTRONIC TRANSFERS—MoneyGram plans to ask for dismissal of CFPB/NY complaint
May 23, 2022
Colleen M. Svelnis, J.D.

Moneygram submits pre-motion letter, noting intention to request transfer to Northern District of Texas or dismissal of the suit. Remittance provider MoneyGram International, Inc. and MoneyGram Payment Systems, Inc. (collectively, MoneyGram) have sub...

CONSUMER FINANCIAL PROTECTION BUREAU—Motion to quash denied for subpoenas seeking relevant and proportional information
May 23, 2022
George M. Gullo, J.D.

The court determined that the defendants did not claim any “personal right to, or privilege in,” the information sought by the subpoenas and further failed to demonstrate standing to challenge any of plaintiffs’ subpoenas to the extent the sought aft...

Banking & Consumer Finance

TOP STORY—Fed finalizes Regulation J amendments governing funds transfers over FedNow Service

The final rule adds Subpart C to Regulation J to establish a comprehensive set of rules governing funds transfers over the new FedNow Service and to explain the legal rights and obligations of Reserve Banks and FedNow Service participants. The Federa...

TOP STORY—Fed finalizes Regulation J amendments governing funds transfers over FedNow Service
COMMUNITY DEVELOPMENT—FDIC details MDI application process, criteria
May 20, 2022
Jeff Williams

The framework follows the Statement of Policy the FDIC issued last year regarding the agency’s efforts to preserve and promote Minority Deposit Institutions. The Federal Deposit Insurance Corporation has issued a Financial Institution Letter (FIL) ou...

CONSUMER FINANCIAL PROTECTION BUREAU—CFPB’s new interpretive rule lays a strong foundation for states’ enforcement efforts
May 20, 2022
Sherri M. Schroeder, J.D.

The interpretive rule describes states’ authorities to pursue companies and individuals that violate federal consumer financial protection law. The Consumer Financial Protection Bureau has released a new interpretive rule intended to provide further ...

FINANCIAL TECHNOLOGY—FinCEN’s associate director discusses ‘intersection of cryptocurrencies, compliance, and national security’
May 20, 2022
Thomas G. Wolfe, J.D.

Speaking at the May 2022 “Chainalysis Links Conference,” Alessio Evangelista provided his perspective from his perch in the Enforcement and Compliance Division of the Financial Crimes Enforcement Network. Alessio Evangelista, the Financial Crimes Enf...

OVERSIGHT AND INVESTIGATION—House Republicans question Bureau UDAAP, adjudication authority; address Fed digital currency concerns
May 20, 2022
Charles A. Menke, J.D.

In a letter to the CFPB Director, the legislators contended the Bureau’s UDAAP supervisory policy and adjudication procedures deviate from prior practices. A separate letter to the Fed Chair addressed guiding principles and concerns over a potential ...

WORTH NOTING—Other regulatory, legislative, litigation, and industry developments
May 20, 2022
WK Editorial Staff

A weekly roundup of other items of interest to the banking and finance law community. BANKING OPERATIONS —The Office of the Comptroller of the Currency and the Federal Reserve Board have scheduled public hearings on two proposed acquisitions by two C...

Banking & Consumer Finance

TOP STORY—Government responds to taxpayer’s petition asking Supreme Court to review FBAR penalty issue

The federal government argued that the $2.72M penalty imposed on a taxpayer for failure to report interests in foreign bank accounts was correctly determined, based on the number of accounts he failed to report. The federal government responded to a ...

TOP STORY—Government responds to taxpayer’s petition asking Supreme Court to review FBAR penalty issue
DEPOSIT INSURANCE—FDIC issues compliance guide for small entities on ‘Simplification of Deposit Insurance Rules’ amendment
May 19, 2022
Sherri M. Schroeder, J.D.

The guide is intended to help community banking organizations and other interested parties understand the recently published final rule that amends the deposit insurance rules governing certain types of trust accounts and mortgage servicing accounts....

OVERSIGHT AND INVESTIGATION—FHFA inspector general notes accomplishments, challenges in semiannual report
May 19, 2022
Nora Macaluso

The office’s activities were mostly remote during the six-month period covered by the report, noted Inspector General Brian Tomney. The Federal Housing Finance Agency’s Office of Inspector General (OIG) said it published 16 reports, including audits ...

STATE BANKING LAWS—NYDFS sends guidance regarding reverse mortgage loans for cooperative apartments
May 19, 2022
Colleen M. Svelnis, J.D.

The letter, sent to all institutions engaged in reverse mortgage lending in the state, lays out the expectations once the New York state banking law goes into effect with provisions regarding reverse mortgages. The New York Department of Financial Se...

DEBT COLLECTION—Global Payments opposes CFPB’s appeal of dismissed action alleging debt collection scheme
May 19, 2022
Justin Marcus Smith, J.D.

While similar to Global Connect, LLC’s previously filed brief, Global Payments Inc.’s brief focuses more on the lower court’s factual record and on what the federal district court found to be improper. Appellee Global Payments Inc., one of five alleg...

BLOG TRACKER—Noteworthy blog posts and other commentary
May 19, 2022
WK Editorial Staff

The week’s most insightful, intriguing, or entertaining blog posts from the banking and financial services community. American Action Forum, Regulatory Magic , by Douglas Holtz-Eakin Federal Reserve Bank of Atlanta, Take On Payments Blog, The Cost of...

Banking & Consumer Finance

TOP STORY—FDIC adopts final rule addressing false advertising, misrepresentation of deposit insurance

The FDIC Act did not require the agency to promulgate regulations to implement those provisions that prohibit false or misleading representations about deposit insurance, but the final rule will timely formalize the enforcement process. The Federal D...

TOP STORY—FDIC adopts final rule addressing false advertising, misrepresentation of deposit insurance
Organizations Mentioned:American International Group | Bloomberg
BANKING OPERATIONS—FDIC amends guidelines for appeals of material supervisory determinations
May 18, 2022
Ursula Furi-Perry, J.D.

The amendments restore supervisory committee and permit the electronic submission of appeals. The Federal Deposit Insurance Corporation (FDIC) has amended the guidelines it adopted for appeals of material supervisory determinations, effective May 17,...

CONSUMER FINANCIAL PROTECTION BUREAU—CFPB issues enforcement memorandum regarding misuse of FDIC logo
May 18, 2022
Colleen M. Svelnis, J.D.

The guidance addresses false advertising and misuse of the FDIC name and logo. The Consumer Financial Protection Bureau has released an enforcement memorandum that addresses prohibited practices on claims about Federal Deposit Insurance Corporation i...

FINANCIAL STABILITY—Morton ‘optimistic’ about the world’s transition to a net-zero future
May 18, 2022
Sherri M. Schroeder, J.D.

The inaugural Climate Counselor discussed the Treasury’s efforts to promote transparency and accountability at the MSCI Capital for Climate Action Conference. Remarks made by John Morton, the U.S. Treasury’s first Climate Counselor, at the MSCI Capit...

FINANCIAL STABILITY—OCC’s Acting Comptroller: Banks should take ‘fresh look’ at risk exposures
May 18, 2022
Thomas G. Wolfe, J.D.

“With significant monetary tightening projected in the short- to medium-term, banks should be asking themselves, ‘What would happen to us if the tide were to go out?’,” Michael Hsu said. Speaking at the “Bloomberg Risk & Regulation Week 2022” confere...

FINACIAL STABILITY—TARP to cost federal government $31B, CBO says
May 18, 2022
Charles A. Menke, J.D.

In a report, the CBO said TARP’s estimated cost derives mainly from continuing grant programs to prevent home mortgage foreclosures, assistance to AIG, and aid to the automobile industry. The Congressional Budget office has released a report on the T...

Banking & Consumer Finance

TOP STORY—9th Cir.: Lender’s inaccurate report to credit reporting agencies impairs borrower’s ability to secure mortgage

The lender erroneously reported that the borrower owed a debt, which had been abolished under Arizona law; whether the lender’s investigation into the borrower’s dispute was reasonable was for a jury to decide. Reversing the district court’s grant of...

TOP STORY—9th Cir.: Lender’s inaccurate report to credit reporting agencies impairs borrower’s ability to secure mortgage
CONSUMER FINANCIAL PROTECTION BUREAU—CFPB launches ‘Consumer Financial Protection Circular’ system
May 17, 2022
Charles A. Menke, J.D.

The new system aims to promote consistent enforcement of consumer financial protections and fair competition by providing guidance to other agencies having consumer financial protection responsibilities. The Consumer Financial Protection Bureau annou...

FINANCIAL TECHNOLOGY—Advisory warns firms against hiring North Korean tech workers
May 17, 2022
Lauren Bikoff, MLS

The individuals pose as non-North Korean to obtain employment that helps fund the country’s nuclear weapons and ballistic missile programs, the advisory says. The U.S. Treasury Department, State Department, and Federal Bureau of Investigation have is...

MORTGAGES—ABA urges CFPB to balance concerns, benefits of automated valuation model
May 17, 2022
Thomas G. Wolfe, J.D.

As the CFPB outlines its rulemaking for proposed AVM “quality control standards,” the ABA offers its recommendations. The American Bankers Association (ABA) has submitted a comment letter to the Consumer Financial Protection Bureau in connection with...

MORTGAGES—CFPB releases study on mortgage servicing during pandemic
May 17, 2022
Colleen M. Svelnis, J.D.

The study included observations from data reported by 16 servicers from May–December 2021. In a follow-up to its previous report issued in August 2021, the Consumer Financial Protection Bureau has released a report on mortgage servicing pandemic resp...

FINANCIAL TECHNOLOGY—‘Big Tech’s’ role in financial services raises policy issues, CRS report says
May 17, 2022
Nora Macaluso

Tech giants don’t currently have a large share of the financial services market, but any of them could scale up quickly in the future, the Congressional Research Service said in a report. Big technology companies’ growing involvement in the banking s...