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 May 10, the House Financial Services Committee announced that the House Committee on Rules will consider the Financial Innovation and Technology Act for the 21st Century Act (FIT Act), a bill that proposes to create a comprehensive regulatory framework for the digital asset industry. Members of the House Financial Services Committee anticipate that the FIT Act will proceed to the House Floor for a full vote by the end of May. For more information, click here.
  • On May 10, Acting Comptroller of the Currency Michael J. Hsu issued a statement in support of the vote by the Financial Stability Oversight Council (FSOC) to issue its Report on Nonbank Mortgage Servicing. For more information, click here.
  • On May 10, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra issued a statement on the Financial Stability Oversight Council’s Nonbank Mortgage Company Report. For more information, click here.
  • On May 10, the U.S. District Court for the Northern District of Texas granted an injunction sought by the banking industry and other business interests to freeze the CFPB regulations governing late fees, which were scheduled to take effect on May 14. For more information, click here.
  • On May 9, the CFPB issued a new report, finding that consumers encounter numerous problems with credit card rewards programs. For more information, click here.
  • On May 8, the U.S. House of Representatives passed a bipartisan resolution to overturn the Securities and Exchange Commission’s (SEC) SAB 121, a staff accounting bulletin that restricts banks from offering digital asset custody services. For more information, click here.
  • On May 6, the Board of Governors of the Federal Reserve System (Federal Reserve) released the April 2024 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS), which addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the first quarter of 2024. For more information, click here.
  • On May 6, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Housing Finance Agency (FHFA) announced that they adopted a Notice of Proposed Rulemaking (NPR) to address incentive-based compensation arrangements, as required under Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 956). The National Credit Union Administration (NCUA) is expected to take action on the NPR in the near future. The SEC has included a rulemaking to implement Section 956 on its rulemaking agenda. This NPR is intended to advance stakeholder engagement needed to develop a final incentive-based compensation rule. For more information, click here.
  • On May 3, the Federal Reserve, FDIC, and OCC released a guide to support community banks in managing risks presented by third-party relationships. Community banks engage with third parties to help compete in and respond to an evolving financial services landscape. Third-party relationships present varied risks that community banks are expected to appropriately identify, assess, monitor, and control to ensure that their activities are performed in a safe and sound manner and in compliance with applicable laws and regulations. These laws and regulations include, but are not limited to, those designed to protect consumers and those addressing financial crimes. For more information, click here.
  • On May 2, the Subcommittee on Emerging and Evolving Technologies, Technology Advisory Committee of the U.S. Commodity Futures Trading Commission issued a report on the responsible use of artificial intelligence (AI) by exchanges, clearinghouses, futures commission merchants, brokers, and data repositories, among others, interested in using AI in financial markets. For more information, click here.
  • On May 2, Judicial Arbitration and Mediation Services, Inc. (JAMS) announced its new Mass Arbitration Procedures and Guidelinesand Mass Arbitration Procedures Fee Schedule (together, the procedures), with the express goal to “facilitate the fair, expeditious and efficient resolution of Mass Arbitrations” and implicit intent to reduce the administrative burden and onerous fees of mass arbitrations, as well as the delay and potential unfairness to the parties. While effective immediately, the procedures only apply if the parties have agreed to their application in a pre- or post-dispute written agreement. This limitation significantly decreases the effectiveness of the procedures as a tool for hedging risks and limiting the high costs of mass arbitration. For more information, click here.
  • On May 1, the CFPB released a report detailing the complex costs and fees that many consumers with health savings accounts are forced to pay. For more information, click here.
  • On May 1, the FHFA released a report titled, “Lesson Learned from Assessing Exposure to Climate-Related Risks,” which is a tool for assessing exposure to different climate related risks under different future conditions. For more information, click here.
  • On April 30, the CFPB issued a new report that suggests consumers tend to pay more for products that have more complex pricing structures. The report is based on experiments with multiple rounds of buyers and sellers interacting in simple markets, and found that participants tended to pay more when prices were broken into sub-parts and were harder to understand. For more information, click here.
  • On April 30, the U.S. Government Accountability Office sent a letter to FDIC with priority open recommendations. For more information, click here.
  • On April 29, the U.S. Department of Housing and Urban Development (HUD) released the Guidance on Application of the Fair Housing Act to the advertising of Housing, Credit, and Other Real Estate Related Transactions Through Digital Programs. For more information, click here.
  • On April 29, the Office of Fair Housing and Equal Opportunity issued two guidance documents regarding the use of AI in housing-related practices, specifically in tenant screening and housing advertising. For more information, click here and here.

State Activities:

  • On May 9, Maryland Governor Wes Moore signed HB662. The bill prohibits consumer reporting agencies (CRAs) from including certain records relating to a criminal proceeding involving a consumer, in a consumer report. It also prohibits CRAs from relying on information in certain criminal proceedings concerning the consumer to make a determination on the consumer’s creditworthiness. For more information, click here.
  • On May 9, Moore signed SB41. Under existing law, consumer reporting agencies are prohibited from including any of the following items of information in any consumer report:
    • Bankruptcies older than 10 years;
    • Suits and judgments older than seven years;
    • Paid tax liens older than seven years;
    • Accounts placed for collection or charged to profit and loss older than seven years; and
    • Any other adverse item of information older than seven years.
    • Certain uses of consumer reports are exempt from this prohibition, and the bill expands these exemptions to include credit transactions with a principal amount of $150,000 or more (an increase from $50,000), underwriting of life insurance with a face amount of $150,000 or more (an increase from $50,000), or employment for a position with an annual salary of $75,000 or more (an increase from $20,000). A similar bill, HB262, was signed by the governor on the same day. The bill becomes effective October 1. For more information, click here.
  • On May 9, Alabama Governor Kay Ivey signed HB335. The bill affects tax lien auctions in the following ways, among others, it:
    • Requires a public auction on real property to take place between 8:30 a.m. and 4:00 p.m.;
    • Consolidates the three separate fees associated with purchases of a tax lien at auction into one fee;
    • Provides that if a holder of a tax lien certificate fails to exercise the first right to purchase, the cost of the redemption price of the tax lien shall be added to the purchase price at the tax lien sale or auction and would provide for the transfer of the tax lien certificate and included rights; and
    • Prohibits a holder of a tax lien certificate from entering upon or possessing any property until a deed is received from the circuit clerk. For more information, click here.
  • On May 8, California Attorney General (AG) Rob Bonta, along with 15 other state AGs, submitted a letter, urging congressional leaders to eliminate the preemption language found in the current draft of the American Privacy Rights Act (APRA), which is a proposed federal data privacy bill. As drafted, the APRA would replace certain provisions of California’s privacy laws with weaker provisions. Accordingly, Bonta and his colleagues implore Congress to set a floor with federal data privacy legislation, not a ceiling, allowing states the autonomy to provide additional protections as they see fit. For more information, click here.
  • On May 6, Georgia Governor Brian Kemp signed SB 73. The bill amends existing law related to, among other things, the state’s law governing telephone solicitations. The bill now provides that “no person or entity shall make or cause to be made on behalf of any person or entity and telephone solicitation” where the person has given notice to the commission of the subscriber’s objection to such solicitation. The bill provides a private right of action for consumers who have been solicited by phone in violation of the bill’s provisions. Such action permits the consumer to seek injunctive relief, recover reasonable attorney’s fees and costs, and claim actual monetary loss due to the violation or up to $1,000 for each violation (whichever is greater). This limitation, however, will not apply to class actions. For more information, click here.
  • On May 6, Florida Governor Ron DeSantis signed S902. The bill creates the Florida Vehicle Value Protection Agreements Act (the Florida Act) and includes:
    • Requirements for offering vehicle value protection agreement (VVPAs), including provisions regarding restricting the type of charges, prohibiting certain conditional sales, utilizing an administrator, providing a copy of the agreement, prohibiting sales with duplicative coverage, and providing for financial security requirements;
    • The nature, extent, and type of disclosures required in VVPAs;
    • Penalties for violating the Florida Act, which include noncriminal violations punishable by a fine per violation or in the aggregate for all “violations of a similar nature,” which is defined in the bill; and
    • An exemption of VVPAs offered in connection with a commercial transaction from the disclosure and penalty provisions of the Florida Act.
    The bill also amends the definition of guaranteed asset protection (GAP) product to specify that a GAP product:
    • May be with or without a separate charge;
    • May cancel, rather than just waive, the customer’s liability;
    • Applies when a motor vehicle incurs total physical damage or is subject to an unrecovered theft; and
    • May provide a benefit that waives a portion of, or provides a customer with a credit toward, the purchase of a replacement vehicle.
    The bill also amends the provisions regarding GAP products to:
    • Provide for the refund of all unearned portions of the purchase price of a contract for a GAP product if the contract is terminated, unless the contract provides otherwise;
    • Prohibit an entity from deducting more than $75 in administrative fees from a refund;
    • Provide that a GAP product may be cancelable or noncancelable after a “free-look period” defined in the bill; and
    • Provide that if a termination of a GAP product occurs for a specified reason, the entity may pay any refund directly to the holder or administrator, and deduct the refund amount from the amount owed under the retail installment contract except if such contract has been paid in full.
    The bill takes effect on October 1. For more information, click here.
  • On May 6, DeSantis signed H285. The bill provides that certain information submitted to the clerk of the circuit court or property appraiser for the purpose of registering for a recording notification service or a related service is confidential and exempt from public records requirements. For more information, click here.
  • On May 3, Tennessee Governor Bill Lee signed HB 2320. The bill requires a plaintiff in a civil action filed on a consumer debt to include certain information (such as a statement of debt transfer or assignment, the date of transfer, names of prior debt holder from point of charge-off, and the name or description of the original creditor) with a civil warrant or other leading process to initiate the action. Additionally, prior to obtaining a default judgment award, the plaintiff must present sufficient evidence to the court that demonstrates that the plaintiff is entitled to collect the debt, and the plaintiff must also provide certain agreements or records that establish existence of the consumer debt. For more information, click here.
  • On May 2, DeSantis approved HB 939. The bill adds several new definitions and revises the definition of “depository institution” to mean “a bank, a credit union, a savings bank, a savings and loan association, a savings or thrift association, or an industrial loan company doing business under the authority of charter issued by the United States, the State of Florida, or any other state, district, territory, or commonwealth” authorized to transact business Florida and insured by the FDIC or the National Credit Union Share Insurance Fund. For more information, click here.
  • On May 1, Lee signed SB1814. This bill clarifies that one of the benefits that must be exempt from execution, seizure, or attachment includes the debtor’s right to receive a payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract due to death, age, or length of service, to the extent such payments are not exempt pursuant to other laws, such as, garnishment law, unless certain conditions are met under present law. The bill also adds that assets of certain funds or plans (g., payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract) are not exempt if the debtor may, prior to age 58, accelerate payment so as to receive payment in a lump sum or in periodic payments over a period of 60 months or less. For more information, click here.
  • On May 1, Lee signed SB1894. The bill amends existing law to require a business that makes an automatic renewal offer or continuous service offer to a consumer to obtain affirmative consent to the agreement containing the automatic renewal offer terms or continuous service offer terms, and if the automatic renewal will occur more than 60 days after affirmative consent is obtained, a clear and conspicuous notice must be provided to the consumer regarding when the business will charge the consumer for the automatic renewal or continuous service. The amendments become effective on July 1. For more information, click here.
  • On April 23, Lee signed HB 2711. Among other things, the bill modifies the state’s Consumer Protection Act (CPA) to set forth “other factors” that a court may consider (in addition to the defendant’s participation in the complaint resolution process and defendant’s restitution efforts prior to initiation of an action) when determining the amount of the penalty for a defendant’s violation of the CPA. The other factors now include: (a) the good or bad faith of the violator as it relates to the violations; (b) the injury to the public; (c) the violator’s ability to pay; (d) the public’s interest in eliminating the benefits derived by the violator from the violations; and (e) the state’s interest in vindicating the authority of the state and deterring future violations. 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.