April 22, 2024
Finance

Consumer Finance ABstract 2023 Year-End Reprise | Alston & Bird


As we reflect on the previous year and look toward the new year, we thought you’d appreciate our top 20 most-read Consumer Finance ABstract posts from 2023…


Majority of States Now Permit Remote Work for MLOs and Mortgage Company Employees
November 3, 2023 | By Aldys London
A&B ABstract:
On June 9, Illinois became the latest state in a growing trend to authorize remote work for mortgage loan originators and mortgage company employees. This makes five states joining the list of jurisdictions legislatively permitting MLOs to work remotely since Montana enacted similar legislation in March, with more states expected during the 2024 legislative sessions.
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Consumer Finance State Roundup (August 2023)
August 10, 2023
The pace of legislative activity this year can make it hard to stay abreast of new laws. The Consumer Finance State Roundup provides a brief overview of recently enacted legislation of potential interest. Between the end of July and the first week of August, two states enacted legislation of potential interest to Consumer Finance ABstract readers.
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Oh Snap! CFPB Sues Fintech Company Under CFPA and TILA
August 7, 2023 | By Sam Bragg
A&B ABstract:
On July 19, the Consumer Financial Protection Bureau sued a Utah-based fintech company and several of its affiliates for allegedly deceiving consumers and obscuring the terms of its financing agreements in violation of the Consumer Financial Protection Act, Truth in Lending Act, and other federal regulations.
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Consumer Finance State Roundup (July 2023)
July 18, 2023
The pace of legislative activity this year can make it hard to stay abreast of new laws. The Consumer Finance State Roundup provides a brief overview of recently enacted legislation of potential interest. Since our last update, eight states have enacted measures of potential interest to Consumer Finance ABstract readers.
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NYDFS Releases Revised Proposed Second Amendment of Its Cybersecurity Regulation
July 13, 2023 | By Kimberly Peretti, Kate Hanniford, Ashley Miller, and Lance Taubin
The New York Department of Financial Services published an updated proposed Second Amendment to its Cybersecurity Regulation in the New York State Register on June 28, updating its previous proposed Second Amendment, which was published November 9, 2022. While the proposed language is largely similar to the previous draft, which we previously summarized, the NYDFS incorporated a number of changes as a result of the 60-day comment period.
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Georgia, Florida, Connecticut Enact Commercial Financial Disclosure Laws
July 13, 2023 | By Stephen Ornstein and Josh Dhyani
A&B ABstract: 
Georgia, Florida, and Connecticut are among a growing list of states, including California, New York, Utah, and Virginia, that have enacted laws requiring consumer-style disclosures for commercial financing transactions. These laws are part of a burgeoning trend by state legislatures to impose burdensome disclosures, like those required by the federal Truth in Lending Act, on providers of small-balance commercial loans and financings. These laws apply to business-purpose transactions but not to transactions having a consumer, family, or household purpose.
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Being a Government Agency Is Not an Exception to the Federal Discovery Rules
June 15, 2023 | By Kelley Barnaby and Sam Bragg
A&B ABstract:
When litigating in federal court, government agencies are not exempt from the rules of discovery. The Eleventh Circuit reminded the Consumer Financial Protection Bureau of this in its recent decision CFPB v. Brown, et al. The Court affirmed a district court’s sanctions order dismissing the CFPB’s claims against five defendants because the CFPB had “engag[ed] in dramatic abuse of the discovery process.”
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CFPB Issues Preemption Determination That State Commercial Financing Disclosure Laws Are Not Preempted by TILA
May 5, 2023 | By Aldys London and Aileen Ng
A&B ABstract:
The Consumer Financial Protection Bureau announced that it issued a final preemption determination concluding that certain state disclosure laws that apply to commercial financing transactions in California, New York, Utah, and Virginia are not preempted by the federal Truth in Lending Act. As covered in a previous post, we note that the California, Utah, and Virginia laws have already gone into effect, and New York’s is set to become effective on August 1.
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New York’s Commercial Finance Disclosure Law Set to Take Effect August 1, 2023
April 4, 2023 | By Stephen Ornstein and Josh Dhyani
A&B ABstract: New York is one of the first states that enacted laws requiring consumer-style disclosures for commercial financing transactions . Previously, the New York Department of Financial Services issued guidance stating that compliance with the requirements would be delayed until it issued final implementing regulations. Those final regulations were published on February 1, with an effective date of August 1.
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Second Circuit Deepens Circuit Split over CFPB Funding Structure
March 28, 2023 | By Sam Bragg
A&B ABstract:
On March 23, the Second Circuit held that the Consumer Financial Protection Bureau’s funding structure is constitutional. This decision comes on the heels of the Supreme Court granting certiorari to review the Fifth Circuit’s ruling in Community Financial that reached the opposite conclusion.
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States Continue Trend Supporting Remote Work for MLOs and Mortgage Company Employees
March 27, 2023 | By Morey Barnes Yost and Aldys London
A&B ABstract:
Effective July 1, Montana will become the latest jurisdiction to codify authorization for mortgage loan originators and mortgage company employees to engage in remote work. That legislation follows a general trend over the past year – and, more so, since the early days of the COVID-19 pandemic – to allow remote operations. No longer a temporary measure necessitated by pandemic lockdowns, remote work is increasingly acknowledged by regulators as an acceptable permanent option for today’s working environment. Last year, 18 jurisdictions took action to extend temporary permission for, or permanently authorize, the practice, and the trend continues in 2023.
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CFPB Issues Special Edition of Supervisory Highlights Focusing on Junk Fees
March 24, 2023 | By Morey Barnes Yost
A&B ABstract:
In the 29th edition of its Supervisory Highlights, the Consumer Financial Protection Bureau focused on the impact of so-called “junk” fees in the mortgage servicing, auto servicing, and student loan servicing industries, among others.
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The COVID-19 National Emergency Is Ending: Are Mortgage Servicers Ready?
February 24, 2023 | By Anoush Garakani and Nanci Weissgold
A&B ABstract:
On January 30, President Biden informed Congress that the COVID-19 National Emergency will be extended beyond March 1, but that he anticipates terminating the national emergency on May 11. The White House Briefing Room reiterated the President’s position on February 10. Given the significant updates mortgage servicers made to their compliance management systems (CMS) to ensure compliance with the myriad of COVID-19-related laws, regulations, and guidance issued in response to the pandemic, servicers should begin evaluating their CMS now to determine whether updates are necessary to minimize the risk of noncompliance and consumer harm as the COVID-19 emergency comes to an end. We discuss some of the key areas servicers should focus on as they develop a plan for winding down COVID-19 protections.
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New York Foreclosure Abuse Prevention Act Curtails Servicers’ Options
February 14, 2023 | By Nanci Weissgold, Anoush Garakani, Morey Barnes Yost, and Gloria Han
A&B ABstract:
Effective on approval by Governor Kathy Hochul on December 30, 2022, New York Assembly Bill 7737b, the Foreclosure Abuse Prevention Act, became law. The act is significant because it reverses judicial precedent that permitted a lender, after default, to undo the acceleration of a mortgage and stop the running of the statute of limitations in a foreclosure action through voluntary dismissal, discontinuance of foreclosure actions, or de-acceleration letters. Notably, the act applies both prospectively and to any foreclosure action filed before its effective date that had not been resolved through a final judgment and order of sale. Further, unlike other provisions of New York law, the act applies to all properties – not only those that are owner-occupied. Public reaction to whether the measure will benefit consumers has been mixed – but regardless, it changes the rules of the game for lenders and servicers in New York State.
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Moving to Address Appraisal Bias, Agencies and the Appraisal Foundation Issue Updates
February 7, 2023 | By Nanci Weissgold, Morey Barnes Yost, and Melissa Malpass
A&B ABstract:
A year and a half after President Biden’s announcement of the Interagency Task Force on Property Appraisal and Valuation Equity, the past weeks have seen a flurry of activity from federal agencies and the Appraisal Foundation to address issues of bias in residential property appraisal. What should lenders, servicers, and appraisers know?
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District Court Dismisses CFPB’s Redlining Case Against Townstone Financial
February 6, 2023 | By Melissa Malpass
A&B ABstract:
On Friday, in the CFPB v. Townstone Financial fair lending case, the U.S. District Court for the Northern District of Illinois dismissed with prejudice the complaint filed by the Consumer Financial Protection Bureau , holding that the plain language of the Equal Credit Opportunity Act does not prohibit discrimination against prospective applicants.
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CFPB Issues Proposed Rule to Establish Public Registry of Supervised Nonbank Form Contract Provisions that Waive or Limit Consumers’ Legal Protections
February 3, 2023 | By Nanci Weissgold, Anoush Garakani, and Kathleen Benway
A&B ABstract:
On January 11, the Consumer Financial Protection Bureau announced a proposed rule to establish a public registry and require nonbanks supervised by the agency to register their use of certain terms and conditions contained in “take it or leave it” form contracts for consumer financial products or services that “attempt to waive consumers’ legal protections,” “limit how consumers enforce their rights,” or “restrict consumers’ ability to file complaints or post reviews.” The purpose of the Proposed Rule’s registration system is to allow the CFPB to prioritize oversight of nonbanks that use the covered terms and conditions based on the agency’s perception that these provisions pose risks for consumers. The CFPB seeks public comment on the practical utility of collecting and publishing this information, as well as ways to minimize the burden of the information collection on respondents. The comment period closes on April 3.
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Supreme Court Wrestles with Scope of Attorney-Client Privilege
January 17, 2023 | By Sam Bragg, Kelley Barnaby, and Christian Sweeney
A&B ABstract:
On January 9, the U.S. Supreme Court heard argument in a case with potentially major implications for companies and individuals alike. In re Grand Jury asks the Court to give trial courts a definitive standard for determining if dual-purpose client communications containing both legal and nonlegal advice are protected under the attorney-client privilege.
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New York Amends Disclosure Requirements for Telemarketers
January 11, 2023 | By Aldys London and Gloria Han
A&B ABstract:
New York Governor Kathy Hochul signed legislation in December 2022 designed to limit unwanted telemarking calls by providing consumers the option to be added to a company’s do-not-call list at the outset of a call. The new law takes effect March 6.
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CFPB Proposes Nonbank Registry to Focus on Compliance “Recidivism”
January 11, 2023 | By Nanci Weissgold, Anoush Garakani, and Melissa Malpass
A&B ABstract:
On December 12, 2022, the Consumer Financial Protection Bureau announced a proposed rule to require certain nonbanks to register with the agency when they become subject to a public written order or judgment imposing obligations based on violations of certain consumer protection laws. The CFPB also proposes to maintain a public online registry of those nonbanks subject to agency or court orders to “limit the harms from repeat offenders.” We provide a description of the CFPB’s proposed rule, along with the potential implications for the financial services industry.
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