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The Consumer Financial Protection Bureau has backed off enforcement and supervision of consumer protection laws, leaving states to fill the void — and potentially creating a "patchwork" of state laws that banks will have to comply with.
The American Fintech Council requested a 30-day extension for buy now/pay later providers to submit information about their businesses to the New York Department of Financial Services. New York is the first state to institute a law specifically regulating BNPL.
The memorandum creates channels for sharing information about nonbanks between the Federal Housing Finance Agency and the Conference of State Bank Supervisors.
States have the option of adopting the oversight framework issued by the Conference of State Bank Supervisors, which resembles capital and liquidity plan proposed by the Federal Housing Finance Agency.
In the waning days of the Trump administration, the agency issued a new legal theory of its power to let national banks evade state consumer protection laws. But some state attorneys general and consumer groups charge the federal regulator is attempting to sidestep restrictions imposed by Dodd-Frank.
On the same day that Mr. Cooper announced a settlement with state and federal authorities over its servicing practices, the Dallas company, U.S. Bank and PNC reached separate agreements with DOJ regarding bankrupt borrowers.
The ballot measure, which would allow local jurisdictions to expand rent control, had concerned mortgage companies who worried the law would result in a patchwork of different policies that could complicate underwriting and discourage lending.
The OCC is trying to seize jurisdiction by arguing that current supervision is haphazard. But states are already working together to streamline regulation while continuing to enforce consumer protections and encourage innovation.
The California plan to create a new, tougher state regulatory agency is at the finish line after lawmakers agreed to key exemptions for banks while maintaining strong enforcement measures for payday lenders and other firms.
The legislation, which would apply to both banks and nonbanks, would give borrowers the right to sue for damages when servicing violations occur.
A proposal to expand consumer protections in the state was added to a budget bill after being dropped in June. Financial institutions say the measure conflicts with federal law and are working behind the scenes to stop it.
The Conference of State Bank Supervisors, banking law scholars and consumer advocacy organizations filed amicus briefs siding with the New York State Department of Financial Services in its court battle with the federal regulator.
The complaint filed by New York, California and Illinois argues that the regulation, issued in response to the 2015 Madden decision, undermines state laws intended to protect consumers.
A budget item establishing a new agency to protect consumers from predatory lenders has been put on hold as state officials deal with the coronavirus response and other priorities. But it could be revived in legislative talks later this summer.
The new regulation is intended as a workaround for banks affected by the 2015 decision that created legal uncertainty for loans sold across state lines.
In another sign of state officials trying to outdo the Consumer Financial Protection Bureau, governors in California and New York want greater authority to license and oversee the debt collection industry.
California Gov. Gavin Newsom plans to ask the legislature to revamp the current Department of Business Oversight and rename it the Department of Financial Protection and Innovation, modeled after the federal CFPB.
With fintech firms appearing stuck in neutral in their efforts to seek bank charters from federal regulatory agencies, observers say state licensing options could be in vogue again in 2020.
A trade group is looking into why New York Gov. Andrew Cuomo felt foreclosure risks were too high to sign a bill that would have approved reverse mortgages for cooperative properties.
A proposal by a single utility threatens to upend California’s sweeping mandate requiring solar panels on almost every new home.
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