To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week:

Federal Activities

State Activities

Federal Activities:

  • On April 17, the Consumer Financial Protection Bureau (CFPB) issued an order against BloomTech and its CEO, Austen Allred, for allegedly deceiving students about the cost of loans and making false claims about graduates’ hiring rates. The order permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for 10 years. The CFPB is also ordering BloomTech and Allred to cease collecting payments on income share loans for graduates who did not have a qualifying job, eliminate finance changes for certain agreements, and allow students the option to withdraw without penalty. BloomTech and Allred must also pay more than $164,000 in civil penalties, which will be deposited in the CFPB’s victims relief fund. For more information, click here.
  • On April 17, Senators Cynthia Lummis (R-WY) and Kristen Gillibrand (D-NY) introduced another bipartisan bill titled the Lummis-Gillibrand Payment Stablecoin Act, which seeks to establish a comprehensive regulatory framework for stablecoin issuance, custody, and other intermediated services. This is the second time that Lummis and Gillibrand have co-authored digital asset-related legislation, with their bill, the Responsible Financial Innovation Act, being the first introduced during 2022 and reintroduced during 2023. For more information, click here.
  • On April 16, the Federal Trade Commission (FTC) announced an industry ban against the ringleader of a student loan debt relief scam. Marco Manzi will be permanently banned from the debt relief industry and is required to turn over assets as part of a settlement with the FTC. The FTC charged that Manzi, Ivan Esquivel, and Robert Kissinger, operators of Express Enrollment LLC (also dba SLFD Processing) and Intercontinental Solutions LLC (also dba Apex Doc Processing LLC), pretended to be affiliated with the U.S. Department of Education and used “Biden Loan Forgiveness” or similar names to trick students into signing up for their student debt relief scheme. The FTC said that Apex operators pocketed approximately $8.8 million in junk fees by luring students with false promises of loan forgiveness.
  • On April 16, the CFPB issued a procedural rule to update how the agency designates a nonbank for supervision. The CFPB states that these updates will streamline the designation proceedings for both the CFPB and nonbanks. The changes are designed to encourage nonbanks to volunteer to be supervised, while making it easier for the CFPB to impose supervisory oversight when companies do not consent. For more information, click here.
  • On April 15, the CFPB issued a letter to the Connecticut State Legislature regarding Senate Bill 395 as amended (SB395), which would prohibit health care providers in Connecticut from reporting medical debt to consumer reporting agencies for use in a consumer report. For more information, click here.
  • On April 10, the U.S. Department of Housing and Urban Development (HUD) issued a Notice of Proposed Rulemaking, seeking public comment on its proposal to amend existing regulations that govern admission to public housing and housing programs for applicants with criminal records and eviction or termination of assistance of persons on the basis of illegal drug use, drug-related criminal activity, or other criminal activity. The proposed rule would require that, prior to any discretionary denial or termination for criminal activity, public housing agencies (PHAs) and assisted housing owners take into consideration multiple sources of information, including but not limited to the recency and relevance of prior criminal activity. The proposed rule also seeks to clarify existing PHA and owner obligations and reduce the risk of violation of nondiscrimination laws. For more information, click here.
  • On April 8, the U.S. Department of Justice (DOJ) released its final rule to revise existing regulations implementing Title II of the Americans with Disabilities Act (ADA). This final rule clarifies the obligations of state and local governments to make web content and mobile applications accessible. For more information, click here.
  • In a recent speech at the National Consumer Law Center/National Association of Consumer Advocates Spring Training, CFPB General Counsel Seth Frotman focused on medical billing and collections and tenant screening and debt, emphasizing the CFPB’s enforcement of the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA) in these areas. For more information, click here.

State Activities:

  • On April 16, Massachusetts AG Andrea Joy Campbell issued an advisory providing guidance related to how certain consumer protection and other laws apply to artificial intelligence (AI) and algorithmic decision-making systems. In the advisory, Campbell notifies AI developers, suppliers, and users that existing state consumer protection, anti-discrimination, and data security laws apply to AI just as they would in any other context. Campbell’s advisory also includes a nonexhaustive list of acts and practices that could be characterized as unfair and deceptive under the Massachusetts Consumer Protection Act, including, but not limited to: (a) falsely advertising the quality, value, or usability of AI systems; (b) supplying AI systems that are defective, unusable, or impractical for the purpose advertised; (c) misrepresenting the reliability, manner of performance, safety, or condition of an AI system; and (d) failing to comply with Massachusetts statutes, rules, regulations, or laws, meant for the protection of the public’s health, safety, or welfare. The advisory further warns that the Commonwealth’s anti-discrimination laws prohibit AI developers, suppliers, and users from the use of technology that discriminates on individuals based on any legally protected characteristic. For more information, click here.
  • On April 16, Maine Governor Janet Mills signed HP 1452 into law. The bill makes several amendments to the process for the sale of foreclosed properties due to nonpayment of taxes. Among other things, the bill eliminates the requirement that a former owner submit a written demand for the return of excess funds. The bill also now requires a municipality to provide notice of intent to disburse excess proceeds to the former owner of a property sold pursuant to the bill’s provisions at least 30 days prior to the disbursement of such excess funds. The bill also allows a municipality to deduct fees incurred for advertising, mailing, and recording related to the property and expenses incurred in improving the property from sale proceeds, in addition to other costs authorized under current law. For more information, click here.
  • On April 12, Kansas Governor Laura Kelly approved SB 345, known as the Commercial Financing Disclosure Act (act). The act requires the disclosure of certain commercial financing product transaction information, authorizes the AG to enforce it, and provides for civil penalties for violation of the act’s provisions. Among other things, the act requires a provider to disclose the following with each commercial financing transaction: (1) total amount of the funds provided; (2) total amount of funds disbursed to such business, if less than the total amount of funds provided; (3) total amount to be paid to such provider; (4) the total dollar cost of such commercial financing transaction; (5) the manner, frequency, and amount of each payment; and (6) a statement of whether there are any costs or discounts associated with prepayment of such commercial financial transaction. Act violations are punishable by a civil penalty of $500 per violation, with a $20,000 maximum penalty for all aggregated violations. The civil penalty increases to $1,000 per violation, with a maximum penalty of $50,000 for aggregated violations, in instances where a person continues to violate the act after having been notified by the AG of a prior violation. For more information, click here.
  • On April 11, Tennessee Governor Bill Lee signed SB 2219 into law. The bill changes the definition of “central bank digital currency” to mean a digital currency, digital medium of exchange, or digital monetary unit of account issued by the federal reserve or another federal agency, foreign government, a foreign central bank, or foreign federal reserve system. The bill also revises the definition of “deposit account” to clarify that a deposit account does not include central bank digital currency or an account evidenced by a certificate of deposit. For more information, click here.
  • On April 10, Iowa Governor Kim Reynolds approved HF 2392 related to mortgage administration and mortgage servicers. The bill defines a “covered institution” as a mortgage servicer that services, or subservices for others, 2,000 or more residential mortgage loans. However, the bill will not apply to servicers that solely own or conduct servicing on reverse annuity mortgage loans, nor will it apply to the reverse annuity mortgage loan portfolio administered by a covered institution. Among other things, the bill establishes the requisite financial condition of covered institutions, which includes maintaining capital and liquidity in compliance with generally accepted accounting principles. Additionally, the bill sets forth certain requirements for covered institutions with respect to corporate governance, including, but not limited to, establishing and maintaining a board of directors that is responsible for oversight of the covered institution. For more information, click here.
Photo of Ethan G. Ostroff Ethan G. Ostroff

Ethan Ostroff’s practice focuses on financial services litigation and consumer law compliance counseling. Ethan is part of the firm’s national practice representing consumer-facing companies of all types in defense of individual and class action claims and counseling them on compliance with federal and

Ethan Ostroff’s practice focuses on financial services litigation and consumer law compliance counseling. Ethan is part of the firm’s national practice representing consumer-facing companies of all types in defense of individual and class action claims and counseling them on compliance with federal and state laws.

Photo of Elizabeth Briones Elizabeth Briones

Elizabeth is an associate in the Consumer Financial Services practice who represents businesses large and small – from corporations to local partnerships. She is an experienced litigator with a background in complex matters ranging from corporate contract disputes, premises liability, negligence, fraud, and…

Elizabeth is an associate in the Consumer Financial Services practice who represents businesses large and small – from corporations to local partnerships. She is an experienced litigator with a background in complex matters ranging from corporate contract disputes, premises liability, negligence, fraud, and other business torts. She has appeared in state, federal, and multidistrict litigation.

Photo of Addison Morgan Addison Morgan

Addison is an associate in the firm’s nationally recognized Consumer Financial Services Practice Group. He has represented several of the nation’s preeminent financial institutions in litigation arising under the Fair Credit Reporting Act (FCRA), the Telephone Consumer Protection Act (TCPA), the Fair Debt…

Addison is an associate in the firm’s nationally recognized Consumer Financial Services Practice Group. He has represented several of the nation’s preeminent financial institutions in litigation arising under the Fair Credit Reporting Act (FCRA), the Telephone Consumer Protection Act (TCPA), the Fair Debt Collection Practices Act (FDCPA), the FTC Holder Rule, and other consumer protection state analogs.

Photo of Thailer Buari Thailer Buari

Thailer is an attorney in the firm’s Consumer Financial Service practice, where he represents clients in consumer law, business disputes, and commercial litigation. Thailer manages cases from inception to trial, focusing on all aspects of the litigation process, including case development, settlement negotiations…

Thailer is an attorney in the firm’s Consumer Financial Service practice, where he represents clients in consumer law, business disputes, and commercial litigation. Thailer manages cases from inception to trial, focusing on all aspects of the litigation process, including case development, settlement negotiations, legal research and analysis, document review, motions hearings, and mediations.

Photo of Jed Komisin Jed Komisin

Jed defends clients engaged in civil litigation. He has significant courtroom experience and works with his clients to find comprehensive solutions to their legal issues.

Photo of Trey Smith Trey Smith

Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation. He has experience litigating the Consumer Financial Protection Act, the FTC Act…

Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation. He has experience litigating the Consumer Financial Protection Act, the FTC Act, the Truth in Lending Act, state UDAAP statutes, and other consumer protection laws.

Photo of Alan D. Wingfield Alan D. Wingfield

Alan Wingfield helps consumer-facing clients navigate compliance, litigation and regulatory risks posed by the complex web of state and federal consumer protection laws. He is a trusted advisor and tireless advocate, helping clients develop practical compliance and dispute-resolution strategies.