The Roundup: Judge Rejects Small-Biz Rule Challenge, Cash-Back Fees Report, and Quickly Responding to Interest Rate Changes
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: What BNPL lenders are doing to be upfront with borrowers, the FDIC releases a second set of Q&As on the required use of the FDIC logo, a judge rejects the challenge to the small-biz data collection rule, compliance remains a constant for bank-fintech partnerships, the CFPB files reply supporting motion to dissolve preliminary injunction in its credit card late fee lawsuit, a report on cash-back fees, and how to respond to interest rate changes, fast.
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What BNPL Lenders are Doing to Be Upfront with Borrowers
The CFPB has released guidance on how existing federal laws, such as the Truth in Lending Act and Regulation Z, apply to buy-now-pay-later (BNPL) loans. In response, many BNPL lenders are working to comply with these regulations, focusing on transparency and consumer protections. The CFPB plans to issue an FAQ to assist lenders during this transition and will not seek penalties for those making good faith efforts to comply.
FDIC Releases Second Set of Q&As on Required Use of FDIC Logo
The FDIC has released a second set of Q&As regarding its new rule on the required use of the FDIC logo. This rule, effective since April 2024, mandates banks to display the FDIC logo prominently on websites, mobile apps, and certain ATMs by January 1, 2025. The Q&As address common concerns from stakeholders, helping to clarify compliance requirements and ensure that consumers can easily identify insured institutions and understand when their deposits are protected by FDIC insurance.
Significant Stat: $222,000 : The amount the FTC is sending in refunds to consumers harmed by a deceptive mortgage relief operation. Read more
Judge Rejects Challenge to Small-Biz Data Collection Rule
A federal judge in Texas has upheld the CFPB’s small business data collection rule, dismissing a challenge from trade groups. The rule mandates lenders to collect and report data on small business lending to identify discrimination. Despite claims that the rule is overly burdensome, the court confirmed the CFPB’s authority to enforce it, allowing the regulation to proceed as planned.
Compliance Remains a Constant for Bank-FinTech Partnerships
The evolving landscape of bank-FinTech partnerships highlights that compliance remains a constant concern. With the growth of Banking-as-a-Service (BaaS) platforms, the FDIC emphasizes the need for enhanced risk management and deposit stability. This focus ensures that these partnerships maintain financial stability and adhere to regulatory requirements, underscoring the importance of robust compliance measures as technological advancements outpace traditional regulatory frameworks.
CFPB Files Reply Supporting Motion to Dissolve Preliminary Injunction in Credit Card Late Fee Lawsuit
The CFPB recently filed a reply brief urging a court to dissolve a preliminary injunction that halted its credit card late fee rule. The CFPB argues that the plaintiffs misinterpreted the statutory requirements of the CARD Act and TILA and that its $8 late fee cap is justified. The brief also contends that the plaintiffs have not demonstrated a likelihood of success on their other legal challenges. The court’s decision could impact the enforcement of the CFPB’s rule.
Report: Cash-Back Fees
Cash-back fees, which are charged by some merchants when customers opt for cash back during debit card transactions, can disproportionately impact vulnerable consumers, particularly in low-income communities. This report highlights how these fees add up, potentially exacerbating financial strain for those already struggling, and calls for increased transparency and regulatory scrutiny to protect consumers from these unexpected costs.
How to Respond to Interest Rate Changes, Fast
When a new regulatory update is issued—whether it’s the Federal Reserve changing interest rates or a new rule requiring updates to disclosures under TILA—banks and consumer finance companies are expected to implement these updates across marketing channels and assets quickly. However, compliance teams are often constrained by limited bandwidth and resources.
Find out how PerformLine revolutionizes the way banks and consumer finance companies manage regulatory updates by automating and streamlining the process of discovering and monitoring content across the web.
