February 3, 2023

The Consumer Financial Protection Bureau (CFPB) proposed a rule to curb “excessive credit card late fees.” Specifically, the proposed rule would lower the immunity provision for late fees to $8 for a missed payment as well as end the automatic annual inflation adjustment. The proposed rule would also ban late fee amounts above 25% of the consumer’s required payment. 

The CFPB announced that it convened its 1033 SBREFA panel to discuss and seek feedback from small business representatives on proposals for its personal financial data rights rulemaking. In the tweet, the agency included a link to where it posted 99 out of the 1679 comments it received in response to its SBREFA Outline of Proposals and Alternatives under Consideration.

The U.S. House of Representatives passed several pieces of bipartisan financial services legislation. Among the bipartisan bills passed are initiatives to combat the financial exploitation of seniors and other vulnerable adults, streamline federal credit union board meeting requirements, and increase access to capital for rural small businesses. The bills include: 

  • H.R. 500, the Financial Exploitation Prevention Act, sponsored by Capital Markets Subcommittee Chairwoman Ann Wagner (R-MO);

  • H.R. 582, the Credit Union Board Modernization Act, co-sponsored by Oversight and Investigations Subcommittee Chairman Bill Huizenga (R-MI);

  • H.R. 298, the Expanding Access to Capital for Rural Job Creators Act, sponsored by Representative Alex Mooney (R-WV).

The Board of Governors of the Federal Reserve issued a policy statement that says uninsured and insured banks supervised by the Board will be subject to the same limitations on activities, including novel banking activities, such as crypto-asset-related activities.

Securities and Exchange Commission (SEC) Commissioner Mark Uyeda delivered remarks to the California ‘40 Act Group, raising strong concerns with ESG-related investing, specifically calling out higher fees, definitional concerns, and “the lack of any consistent framework for issuing ESG ratings.”

The SEC Division of Examinations published a Risk Alert to highlight observations from examinations related to Regulation Best Interest.  The Risk Alert is intended to assist broker-dealers in reviewing and enhancing their compliance programs related to Regulation Best Interest. The Division encouraged broker-dealers to review their practices, policies, and procedures with respect to Regulation Best Interest in order to address the issues raised in the Risk Alert. 

SEC Commissioner Caroline Crenshaw delivered remarks at the 50th Annual Securities Regulation Institute. Commissioner Crenshaw discussed potential reforms to Rule 506 of Regulation D (Reg D), including reforms to Form D and heightened obligations to be imposed upon large private issuers and large capital raises. 

The New York Department of Financial Services finalized a rule on Wednesday mandating rate and fee disclosures for small business loans under $2.5 million. Under the rule, nonbank small business lenders will have to provide details of the annual percentage rate, repayment terms, and other fees and costs that small businesses incur in taking out loans. Nonbank small business lenders covered by the rule include fintechs, peer-to-peer lenders, and commercial installment lenders. The new rules do not apply to banks, credit unions, or their subsidiaries.

Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, announced membership for the Democratic caucus on the House Committee on Financial Services for the 118th Congress, which is subject to approval by the House Democratic Steering and Policy Committee.

Senate Republican Leader Mitch McConnell (R-KY) announced the Senate Republican Conference Committee Assignments for the 118th Congress. The assignments have been ratified by the Republican Conference and are expected to be ratified by the Senate soon.

The Office of the Comptroller of the Currency (OCC) released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of December 1, 2022, through January 31, 2023. Of the 31 evaluations made public during the months of December 2022 and January 2023, 24 are rated satisfactory and seven are rated outstanding.

The Department of Commerce’s National Telecommunications and Information Administration (NTIA) published a report assessing the barriers to competition in the current mobile app store ecosystem and providing recommendations to “level the playing field for app developers and give consumers more control over their devices.”

HFSC Chairman Patrick McHenry (R-NC) announced the formation of a Republican Working Group —led by Oversight and Investigations Subcommittee Chairman Bill Huizenga (R-MI) to “combat the threat to our capital markets posed by those on the far-left pushing environmental, social, and governance (ESG) proposals.” 

The Board of Governors of the Federal Reserve (FRB) announced its denial of the application by Custodia Bank, Inc., Cheyenne, Wyoming, to become a member of the Federal Reserve System. The Board concluded that the firm’s application as submitted was inconsistent with the required factors under the law. According to the FRB, Custodia “proposed to engage in novel and untested crypto activities that include issuing a crypto asset on open, public and/or decentralized networks.” The FRB concluded that “the firm’s novel business model and proposed focus on crypto-assets presented significant safety and soundness risks.” The press release also referenced banking agencies’ Joint Statement on Crypto-Asset Risks to Banking Organizations, which “previously made clear that such crypto activities are highly likely to be inconsistent with safe and sound banking practices.”

The White House published a blog entitled The Administration’s Roadmap to Mitigate Cryptocurrencies’ Risks, authored by Brian Deese, Director of the National Economic Council, Arati Prabhakar, Science Advisor to the President, Cecilia Rouse, Chair of the Council of Economic Advisors, and Jake Sullivan, National Security Advisor. The blog states that the Administration’s focus is on “continuing to ensure that cryptocurrencies cannot undermine financial stability, to protect investors, and to hold bad actors accountable.” The blog also discusses the White House’s Framework for Responsible Development of Digital Assets, banking agencies’ Joint Statement on Crypto-Asset Risks to Banking Organizations, the Office of Science and Technology Policy (OSTP)’s request for information (RFI) on Digital Assets Research and Development, and the Financial Stability Oversight Council’s recent Report on Digital Asset Financial Stability Risks and Regulation