The Roundup: FDIC Demands Stoppage of False Deposit Insurance Claims, AI Washing, and Marketing Compliance Trends
Welcome to the PerformLine Regulatory Compliance Roundup, home of the latest news, articles, and reports from our industry, curated for you. Let’s get into it.
In this edition: the FDIC demands companies stop false deposit insurance claims, the SEC settles with investment advisers over alleged ‘AI washing’, the CFPB provides input on proposed New York reforms, 5 marketing compliance trends for consumer finance, No FEAR Act annual report for the fiscal year 2023, and the 2024 State of Marketing Compliance Report.
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FDIC Demands Companies Stop False Deposit Insurance Claims
The Federal Deposit Insurance Corporation (FDIC) has issued cease and desist letters to three companies for making false claims about FDIC deposit insurance. The FDIC accuses these companies of misrepresenting their products as FDIC-insured and misusing the FDIC’s name and logo, which could mislead consumers about the safety of their investments. The FDIC’s enforcement action underscores its commitment to protect the integrity of deposit insurance and uphold consumer confidence in the financial system. The regulatory agency is also tightening its rules to prevent such misrepresentations in the future.
SEC Settles With Investment Advisers Over Alleged ‘AI Washing’
The Securities and Exchange Commission (SEC) has imposed fines on two investment firms for making deceptive claims about their use of AI technology. They settled with the SEC, agreeing to pay a total of $400,000 in civil penalties without admitting wrongdoing. The SEC’s actions highlight its focus on combatting “AI washing,” where firms misleadingly promote their AI capabilities. The enforcement is part of broader efforts to ensure truthful disclosures in the financial industry, particularly regarding emerging technologies like AI.
Significant Stat: $59 million: The total amount of damages being paid out by two companies that engaged in deceptive pandemic loan practices. Read more
CFPB Provides Input on Proposed New York Reforms
The Consumer Financial Protection Bureau (CFPB) is addressing misleading corporate practices by supporting state-level consumer protection reforms, as illustrated by its involvement in proposed New York legislation aimed at preventing abusive corporate behaviors. The focus is on enhancing protections against unfair, deceptive, or abusive acts and practices (UDAAP), drawing parallels to efforts to combat “greenwashing” in environmental contexts. The CFPB’s support aims to empower states like New York with stronger tools to safeguard consumers against exploitative practices, emphasizing the shared responsibility among state and federal agencies to protect the public.
5 Marketing Compliance Trends for Consumer Finance
By understanding these trends, organizations can improve their compliance frameworks, ensuring that they can manage marketing compliance efficiently and maintain a competitive advantage in the ever-changing regulatory landscape.
No FEAR Act Annual Report for Fiscal Year 2023
This report by the Consumer Financial Protection Bureau summarizes the CFPB’s EEO complaint activity, significant accomplishments, commitment to civil rights, whistleblower protection laws, principles, and accountability.
2024 State of Marketing Compliance Report
PerformLine’s State of Marketing Compliance Report offers an in-depth analysis of the latest trends and data-driven insights on marketing compliance for consumer finance companies.
