The following newsletter provides a roundup summarizing enforcement actions, guidance, rulemakings, and other public statements taken by a federal and/or state financial services regulatory agency, specifically focusing on: (1) the source of the development (regulator, legislative body, etc.), (2) the subject matter (consumer lending, money transmission, capital markets, etc.), and (3) the general issue covered.

 Regulatory Developments

  • Interagency (Federal). Holding Company Activities & Foreign Banks. Federal banking regulators published a proposed rulemaking (see fact sheet) that would require certain large depository institution holding companies, U.S. intermediate holding companies of foreign banking organizations, and certain insured depository institutions, to issue and maintain outstanding a minimum amount of long-term debt. The deadline for comments is November 30, 2023.
  • Federal Reserve Board & Federal Deposit Insurance Corporation. Resolution Planning. FDIC issued proposed guidance for the 2024 and subsequent resolution plan submissions by certain domestic and foreign banking organizations. The deadline for comments is November 30, 2023.
  • Federal Deposit Insurance Corporation. Troubled Bank Matters. FDIC held an open Board meeting and voted on two proposed rulemakings, proposed guidance, and memoranda on: 1) conditions to certain receivership delegations of authority and procedures and; 2) Board approval of midsized and large failed bank sales. Separately, Acting OCC Comptroller and CFPB Director gave remarks on the proposals.
  • Federal Deposit Insurance Corporation. Resolution Planning. FDIC released a proposed rulemaking to revise its current rule that requires the submission of resolution plans by insured depository institutions (IDIs) with $50 billion or more in total assets. The deadline for comments is November 30, 2023.
  • National Credit Union Administration. Credit Unions. NCUA Chair provided remarks at an event discussing the economic and interest rate environment and their outlook, the importance of cybersecurity, the agency's need for vendor authority and the agency's other legislative priorities, and the promise and perils of artificial intelligence and real-time payment systems.
  • California Department of Financial Protection and Innovation. Commercial Financing Products. CA DFPI announced final regulations for Commercial Financial Products and Services under the CCFPL. The final rule is effective on October 1, 2023, and the first annual report required to be filed under these regulations will cover activity during 2024 and is due no later than March 15, 2025.
  • Texas Department of Banking. Money Transmission & Digital Assets. TX DOB issued an industry notice on the September 1, 2023, effective date on the Money Services Modernization Act (SB895) and HB1666, which implements new regulations relating to the commingling of funds by digital asset service providers.

Enforcement & Litigation

  • Consumer Financial Protection Bureau. Consumer Lenders & UDAAP. CFPB sued a financial holding company and several of its subsidiaries for allegedly engaging in illegal loan-churning practices that harvested hundreds of millions in loan costs and fees in violation of 12 U.S.C. § 5531 (Consumer Financial Protection Act) and its prohibition on abusive and unfair practices.
  • Consumer Financial Protection Bureau. Credit Repair & UDAAP. CFPB entered into a proposed settlement with a group of corporate entities operating some of the largest credit repair brands in the country, to resolve allegations that they violated 12 U.S.C. §§ 5531 and 5536 (Consumer Financial Protection Act), 15 U.S.C. §§ 6101 et seq. (Telemarketing and Consumer Fraud and Abuse Prevention Act), and, 16 C.F.R. §§ 310.3 and 310.4 (Telemarketing Sales Rule) by collecting illegal advance fees for credit repair services through telemarketing.
  • Office of Foreign Assets Control & Department of Justice. Sanctions & Cryptocurrency. OFAC sanctioned one of three co-founders of a virtual currency mixer for his alleged role in providing material support to the mixer service and to the Lazarus Group, a North Korea state-sponsored hacking group. Concurrently, the DOJ filed charges against two individuals with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.