January 6, 2023

The Office of Information and Regulatory Affairs (OIRA) published its Fall 2022 Unified Agenda of Regulatory and Deregulatory Actions, a comprehensive list of actions the administrative agencies are planning. Among the financial regulatory and administrative agencies, the Fall 2022 Agenda lists several new action items and delists regulatory actions proposed in the Spring 2022 Agenda released in June 2022.

The agenda states that the SBREFA Report associated with Dodd-Frank Act 1033 is anticipated in February 2023. The report will follow the Consumer Financial Protection Bureau’s (CFPB) SBREFA Outline published in October 2022. The agenda also moves up the anticipated date for the Dodd-Frank Act 1071 Final Rule from March 2023 to January 2023. The agenda also lists a number of new CFPB proposed rules on overdraft fees, non-sufficient fund fees, nonbank registry covered persons and terms and conditions, and credit card penalty fees.

The CFPB released an annual report detailing improvements and deficiencies in the nationwide consumer reporting companies’ responses to consumer complaints transmitted by the CFPB. Director Rohit Chopra stated that TransUnion, Equifax, and Experian routinely top the list of complaints submitted by consumers and that the CFPB will be “exploring new rules to ensure that they are following the law, rather than cutting corners to fuel their profit model.”

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) issued a joint statement highlighting key risks for banking organizations associated with crypto assets and the crypto asset sector and describing the agencies’ approaches to supervision in this area. The statement mentions the “significant volatility and vulnerabilities” demonstrated over the past year and discusses the agencies’ continued “careful and cautious approach” to crypto assets.

Notably, the statement provides that “issuing or holding as principal crypto assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices. Further, the agencies have significant safety and soundness concerns with business models that are concentrated in crypto asset-related activities or have concentrated exposures to the crypto asset sector.”

New York State Department of Financial Services (NYDFS) Superintendent Adrienne A. Harris announced that Coinbase will pay a $50 million penalty to New York State for significant failures in its compliance program that violated the New York Banking Law and the DFS virtual currency, money transmitter, transaction monitoring, and cybersecurity regulations.

The FDIC released the public sections of resolution plans of 21 large insured depository institutions. This is the first time since 2018 that these sections have been published.

The CFPB and the New York State Office of the Attorney General sued Credit Acceptance Corporation, an auto lender, for allegedly misrepresenting the cost of credit and tricking its customers into high-cost loans on used cars. The joint complaint charges that, among other things, Credit Acceptance Corporation hides costs in loan agreements and sets consumers up to fail. The complaint also alleges that Credit Acceptance Corporation violated New York usury limits and other consumer and investor protection laws. The lawsuit seeks to force Credit Acceptance Corporation to stop its illegal practices, reimburse harmed consumers, pay back wrongfully earned gains, and pay a penalty.

The OCC published its 2022 Annual Report. The OCC Annual Report provides Congress with an overview of the condition of the federal banking system, discusses the OCC’s strategic priorities and initiatives, and shares the agency’s financial management and condition.

The report states that this year’s dislocations in crypto markets and failures of crypto firms highlighted several key risks in relation to the industry and reinforce the importance for banks and supervisors to take a careful and cautious approach to activities involving cryptoassets. Specifically, the report claims that “crypto industry risk management practices lack maturity, stablecoins may be unstable, and contagion risk is high within the crypto industry.”

The report also states that the OCC requires fintechs seeking bank charters to be subject to the same requirements as all banks, and the agency is engaging with peer agencies to develop a coordinated approach to modernize the federal regulatory perimeter. 

The Financial Crimes Enforcement Network (FinCEN) released a Financial Trend Analysis on the financial activity of Russian oligarchs. The report focuses on trends seen in Bank Secrecy Act (BSA) reports filed between March 2022 and October 2022 involving Russian oligarchs, high-ranking officials, and sanctioned individuals. The report also highlights the value of BSA data filed by regulated financial institutions.

The Securities and Exchange Commission (SEC) announced that General Counsel Dan Berkovitz will depart the agency, effective January 31. Megan Barbero, currently SEC Principal Deputy General Counsel, will be appointed General Counsel, effective upon Mr. Berkovitz’s departure.

The CFPB published a blog discussing mortgage financing options in a higher interest rate environment. According to recent CFPB analysis of quarterly HMDA data, these higher rates have already led to increased monthly payments and higher debt-to-income ratios for mortgage borrowers.

The Federal Trade Commission (FTC) published a consumer alert on buy now, pay later (BNPL) products discussing the costs and risks.

The CFPB issued an order against Servicio UniTeller, an international remittance company, for multiple violations of the requirements governing electronic money transfers, including failing to refund customers after the company made money transfer errors. The CFPB found Servicio UniTeller failed to comply with many Electronic Fund Transfer Act requirements, including failing to provide accurate disclosures to senders. The agency order requires Servicio UniTeller to bring its business practices into compliance with the law, to reimburse harmed consumers, and to pay a $700,000 penalty.

The Internal Revenue Service (IRS) announced that crypto brokers will not be subjected to new reporting rules implemented by Congress in 2021 until it publishes regulations on the requirements and solicits comments from the public on them. The IRS said that it will be following normal rulemaking procedure before finalizing regulations for digital asset brokers.