CFPB

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4 11, 2022

DATA3

2022-11-04T10:36:30-04:00November 4th, 2022|1- Financial Services Management|

Consumer Data Rights

Beginning a long-awaited rulemaking process on the extent to which consumers have rights to their own data and how these rights may be exercised, the CFPB is seeking views on an array of ideas and questions to guide future action.  This outline is essentially an advance notice of proposed rulemaking (ANPR) in which the Bureau outlines its initial thinking on key questions such as the extent to which screen-scraping should be allowed, whether new security standards are needed, and when consumers are at risk and the rights and remedies they have following a decision to open their personal data to parties other than the entity that holds key accounts.

DATA3.pdf

3 11, 2022

DAILY110322

2022-11-03T17:15:32-04:00November 3rd, 2022|2- Daily Briefing|

Gruenberg Backs Bank On

In remarks late yesterday, FDIC Acting Chairman Gruenberg pointed to the importance of Bank On accounts to retain previously un- or under-banked households brought into the system following large government payments early in the pandemic.

ECB Presses Climate-Risk Capital Regs

Moving far ahead of the Fed, the ECB has announced strict plans to ensure that EU banks not only improve governance and express climate-risk stress testing, but also hold sufficient internal-capital allocations for physical and transition risk.

Data Standard-Setters to Come Under CFPB Regs

In remarks late yesterday updating the CFPB’s open-banking rulemaking efforts, Director Chopra indicated that the new consumer-data rules (see forthcoming in-depth FedFin report) will also address   how best to set public and private-sector standards to ensure industry-wide fairness and access to critical infrastructure.

IMF Climate-Risk Priorities Include GSIB Buffers

The IMF’s Deputy Managing Director Bo Li today set priorities for central banks and bank regulators addressing financial-system climate resilience.

Daily110322.pdf

31 10, 2022

FedFin on: “Surprise” Fee Restrictions

2022-11-01T16:55:42-04:00October 31st, 2022|The Vault|

In conjunction with a Presidential speech and new White House initiative against “junk fees,” the CFPB has accelerated its own efforts in this arena with two new policy directives.  As with many other recent Bureau actions, the new circular and bulletin do not take the form of notice-and-comment rulemakings, but rather are directives with express enforcement implications unless or until the courts overturn them, the General Accounting Office intervenes to bar guidance outside the rulemaking process as it did years ago related to inter-agency leveraged-loan standards, or new law reconfigures the agency.  The most immediate implication of these edicts is a ban on blanket rejected deposit fees and further constraints on overdraft fees.

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

31 10, 2022

Karen Petrou: The Moral Dilemma of CFPB Dictate

2022-11-01T16:56:49-04:00October 31st, 2022|The Vault|

There is little question that electoral politics powered the President’s launch last week of a new Administration “junk-fee” campaign. How most of these fees matter to the majority of households fuming as they can’t handle prices at the food store and fuel pump is yet to be seen, but politics is only part of the reason for the CFPB’s high-priority blitz against “surprise” fees. Politics is easily understood, if not practiced to maximum advantage. Regulatory actions founded on moral philosophy are not only a compliance conundrum, but also an intellectual quandary.

Question for today’s class: is it right for Rohit Chopra to set rules regardless of the niceties of the rulemaking process when he believes certain acts or practices violate the natural rights of the U.S. citizenry? This may seem a hyperbolic description of the CFPB’s spate of enforceable pronouncements, but it’s the way I read many of them.

Take for example the latest edict on overdraft fees. As FedFin’s in-depth analysis will detail later today, the CFPB’s circular details a raft of laws and rules governing overdraft fees, going on to say how nice they all were but how little they matter anymore.

Because technological delivery can, the CFPB says, obscure fund availability, the Bureau concludes that fees which comply with every provision of each applicable law and rule are still unfair, deceptive, and/or abusive. Disclosures that comply with every provision in each law and rule also no longer suffice, the Bureau believes, and thus depository institutions have an …

31 10, 2022

DAILY103122

2022-10-31T16:47:14-04:00October 31st, 2022|2- Daily Briefing|

CFPB Tackles Payment-System User Fines

Following Director Chopra’s recent focus on Paypal’s withdrawn content penalty, the CFPB today announced it will reopen the public comment period on its bigtech payments order, widening its focus beyond Paypal to all bigtech payment-service providers.  Notably, Zelle is not included in this round.  The order had required Facebook, Google, Apple, Amazon, Square, and Paypal to turn over information on their payments products, business plans, and practices.  The Bureau now seeks further information on their acceptable use policies and how and under what circumstances they levy fines.

Daily103122.pdf

31 10, 2022

OVERDRAFT11

2022-10-31T11:38:50-04:00October 31st, 2022|1- Financial Services Management|

“Surprise” Fee Restrictions

In conjunction with a Presidential speech and new White House initiative against “junk fees,” the CFPB has accelerated its own efforts in this arena with two new policy directives.  As with many other recent Bureau actions, the new circular and bulletin do not take the form of notice-and-comment rulemakings, but rather are directives with express enforcement implications unless or until the courts overturn them, the General Accounting Office intervenes to bar guidance outside the rulemaking process as it did years ago related to inter-agency leveraged-loan standards, or new law reconfigures the agency.  The most immediate implication of these edicts is a ban on blanket rejected deposit fees and further constraints on overdraft fees.  However, the reasoning and rationale in these orders is likely to carry over to a pending agency rulemaking on credit-card fees and possible initiatives related to remittances and even debit- or credit-card interchange fees.

OVERDRAFT11.pdf

31 10, 2022

M103122

2022-10-31T09:58:16-04:00October 31st, 2022|6- Client Memo|

The Moral Dilemma of CFPB Dictate

There is little question that electoral politics powered the President’s launch last week of a new Administration “junk-fee” campaign.  How most of these fees matter to the majority of households fuming as they can’t handle prices at the food store and fuel pump is yet to be seen, but politics is only part of the reason for the CFPB’s high-priority blitz against “surprise” fees.  Politics is easily understood, if not practiced to maximum advantage.  Regulatory actions founded on moral philosophy are not only a compliance conundrum, but also an intellectual quandary.

m103122.pdf

27 10, 2022

DAILY102722

2022-10-27T16:55:34-04:00October 27th, 2022|2- Daily Briefing|

CFPB Seeks Comment on Consumer Data Rights, Market Power

Following remarks from Director Chopra earlier this week, the CFPB today announced a formal kick-off of its consumer data-rights rulemaking.

Gruenberg Reminds Markets of TLGP Backstops at Time of Liquidity Stress

In remarks today, Acting FDIC Chairman Gruenberg stoutly defended the agency’s final rule hiking DIF premiums (see Client Report DEPOSITINSURANCE115).

Warren Reignites Anti-Zelle Campaign

In another appeal to the CFPB to tackle Zelle, Sen. Warren (D-MA) today sent a letter to Director Chopra calling on the Bureau to increase consumer protections in peer-to-peer lending platforms and curtail what she again describes as “rampant” fraud.

Democratic Pressures Grow Against Fed Rate Hikes

Adding to critiques from Sens. Brown (D-OH) and Warren (D-MA), Sen. Hickenlooper (D-CO) today called on the Fed to halt interest-rate increases.

Fed Study Details QE Alternatives, Expanded Fed Role

A new FRB staff paper explores the past, present, and future as an approach to achieving the Fed’s increasingly-problematic monetary-policy transmission: “funding for lending.”

Daily102722.pdf

26 10, 2022

DAILY102622

2022-10-26T17:02:07-04:00October 26th, 2022|2- Daily Briefing|

BIS Announces Successful Multi-CBDC Platform Pilot

Following their retail crypto pilot last week, the BIS announced a successful pilot blockchain ledger – dubbed the mBridge Ledger – connecting twenty commercial banks in China, Hong Kong, Thailand, and the UAE via a multi-CBDC common platform.  Both domestic and foreign commercial banks are permitted to directly hold and transact in CBDCs on the platform to ensure seamless cross-border payments.  To protect monetary sovereignty, the platform allows governments to flexibly control CBDC issuance and redemption, transaction currencies and amounts, and visibility into usage.

With President at His Side, Chopra Sanctions Overdraft, Deposit Fees

President Biden today took aim at junk fees, slamming them in general even as he praised the CFPB’s initiative today sharply to limit “surprise” overdraft and deposit fees.  The agency did so by issuing a circular on unanticipated overdraft fee assessment practices and a bulletin on Returned Deposited Item Fee Assessment Practices, again using its non-regulatory tools to enact new policy and set stringent enforcement standards.  We will shortly provide clients with in-depth analyses of each release.

Daily102622.pdf

25 10, 2022

DAILY102522

2022-10-25T17:08:46-04:00October 25th, 2022|2- Daily Briefing|

Setting Stage for US Action, UK Regulators Target Bigtech Consumer-Finance Market Power

Focusing principally on competition, the UK’s Financial Conduct Authority (FCA) today released a discussion paper investigating bigtech’s entry into payments, deposit, consumer-credit, and insurance.

With Yellen Backing, SEC Central-Clearing NPR Advances

The Federal Register today includes the SEC’s proposal requiring that market clearinghouses submit certain secondary-market transactions for clearing along with the small percentage now already centrally-cleared.

FDIC Reports Significant Financial Inclusion Progress

Showing significant improvements in financial inclusion, the FDIC today released its biennial under- and unbanked household survey.

CFPB to Require Almost-Open Banking

At long last and as recently promised, the CFPB later this week will start a rulemaking process that would ultimately require financial institutions to share personal data with a consumer upon his or her request.

Democrats Get Ready To Blame The Fed

Continuing progressive critiques of the FOMC’s anti-inflation fight, Senate Banking Chairman Brown (D-OH) has written to FRB Chairman Powell sharply protesting current Fed policy.

Daily102522.pdf

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