October 18, 2023

The Senate voted 53-44 to approve S.J. Res. 32, a resolution overturning the implementation of the Consumer Financial Protection Bureau’s (CFPB) final rule under Section 1071 of the Dodd-Frank Act requiring lenders to report demographic data on small-business loan recipients. The House of Representatives must still act on the resolution. The White House threatened to veto the bill in a Statement of Administration Policy, arguing that the resolution would hamper the efforts to promote transparency and accountability in small business lending and create hurdles for mission-driven lenders and community organizations striving to close gaps in capital access for minority- and women-owned businesses.

The California Department of Financial Protection and Innovation (DFPI) and 43 other state agencies reached settlements with ACI Payments, Inc. DFPI and the state agencies alleged that ACI erroneously initiated electronic transactions totaling $2.3 billion from the accounts of 480,000 mortgage holders serviced by Mr. Cooper (formerly known as Nationstar Mortgage, LLC). State regulators levied $10 million in fines through a multistate enforcement action led by regulators from Arkansas, Connecticut, Maryland, and Texas with support from the Conference of State Bank Supervisors. Additionally, 50 state attorneys general levied $10 million in fines to ACI, in coordination with state regulators.

The U.S. Department of the Treasury’s (Treasury) Office of Foreign Assets Control (OFAC) imposed sanctions on Hamas terrorist group members, operatives, and financial facilitators in Gaza and elsewhere including Sudan, Türkiye, Algeria, and Qatar. 

Relatedly, Senator Elizabeth Warren (D-MA), joined by 28 other Senators and 76 Members of the House of Representatives, sent a bipartisan letter to the White House and Treasury, urging the Biden administration to crack down following reports that Hamas raised funds via digital assets.

Treasury and the Cyber Security Council of the United Arab Emirates (UAE) announced they finalized a bilateral Memorandum of Understanding (“MoU”) on Cybersecurity Cooperation during a fireside chat between H.E. Dr. Mohamad Al Kuwaiti, Head of Cyber Security for the UAE Government, and Todd Conklin, Treasury Deputy Assistant Secretary for the Office of Cybersecurity and Critical Infrastructure Protection, at the Gitex Global Conference in Dubai, UAE.

Federal Reserve Board (FRB) Governor Michelle Bowman delivered a speech entitled “Responsible Innovation in Money and Payments” at a roundtable on central bank digital currency (CBDC) at Harvard Law School’s program on international financial systems. Governor Bowman discussed digital assets, CBDC, stablecoins, wholesale payments innovation, policy choices, continued research, and a comprehensive regulatory framework. 

The CFPB took action against Chime Inc. (note Chime, Inc., is different from Chime Financial, Inc., the mobile banking services provider) for deceiving consumers about the speed and cost of remittance transfers through its mobile app, Sendwave. Chime also allegedly illegally forced consumers to waive their legal rights, failed to provide consumers with legally required disclosures and receipts, and failed to properly investigate consumer disputes and errors. The CFPB is ordering Chime to refund affected consumers nearly $1.5 million in fees and pay a $1.5 million penalty into the CFPB’s victims relief fund.

The Federal Deposit Insurance Corporation (FDIC) announced it will hold a meeting on October 24 at 3:00 p.m. ET to consider the final rule on Community Reinvestment Act regulations and the Interagency Policy Statement on Principles for Climate-Related Financial Risk Management for Large Financial Institutions.

The Office of the Comptroller of the Currency (OCC) announced it will host a symposium on tokenization at its headquarters in Washington, DC, on February 8, 2024. The symposium will promote public discussion of the potential for the tokenization of real-world financial assets and liabilities to improve the efficiency and robustness of financial settlements, with a particular focus on the foundations needed to ensure responsible innovation.

The Securities and Exchange Commission (SEC) Division of Examinations released its 2024 examination priorities to inform investors and registrants of the key risks, examination topics, and priorities that the Division plans to focus on in the upcoming year. This year’s examinations will prioritize areas that pose emerging risks to investors or the markets in addition to core and perennial risk areas.

SEC Commissioner Mark Uyeda delivered remarks at the National Society of Compliance Professionals (NSCP) National Conference. Commissioner Uyeda discussed the compliance function and Chief Compliance Officer liability, rules affecting the financial services industry, compliance dates, and implementation challenges.

SEC Commissioner Jaime Lizárraga published a statement entitled “Fairer and More Competitive Public Markets.” Commissioner Lizárraga discussed the SEC’s proposed market structure reform. 

Senate Majority Leader Chuck Schumer (D-NY) announced new Senate Democrat committee assignments following the swearing in of new Senator Laphonza Butler (D-CA). Notably, Sen. Butler will join the Banking Committee and Sen. Kyrsten Sinema (I-AZ) will move from the Banking Committee to the Appropriations Committee.

The Senate Commerce Committee voted by voice vote to send the renomination of Commissioner Rebecca Slaughter, a Democrat, along with the nominations of two Republicans, Andrew Ferguson, and Melissa Holyoak, the solicitors general of Virginia and Utah, respectively, for the Federal Trade Commission (FTC) to the full Senate. 

Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, released a statement in response to the Biden Administration’s latest action on junk fees, applauding the Administration, CFPB, and Federal Trade Commission (FTC) on actions they are taking to crack down on junk fees and make pricing more transparent.

Senator Tim Scott (R-SC), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, along with Senators Mike Crapo (R-ID), John Cornyn (R-TX), Lindsey Graham (R-SC), John Barrasso (R-WY), John Hoeven (R-ND), Marco Rubio (R-FL), Deb Fischer (R-NE), Shelley Moore Capito (R-WV), Bill Cassidy (R-LA), Tom Cotton (R-AR), Steve Daines (R-MT), Mike Rounds (R-SD), Thom Tillis (R-NC), Marsha Blackburn (R-TN), Kyrsten Sinema (I-AZ), Kevin Cramer (R-ND), Mike Braun (R-IN), Rick Scott (R-FL), Cynthia Lummis (R-WY), Bill Hagerty (R-TN), JD Vance (R-OH), Katie Britt (R-AL), and Pete Ricketts (R-NE), introduced the Revoke Iranian Funding Act to rescind the general licenses that enabled the release of the $6 billion to Iran and prevent the Iranian regime from accessing and using the funds held in Qatar.

Ranking Member Scott led a group of Senate Banking Committee Republicans in calling on the Federal Housing Finance Agency (FHFA) to implement reforms to credit scoring models that will expand homeownership opportunities for creditworthy borrowers and make scores more predictive. Ranking Member Scott, along with Sens. Crapo, Rounds, Tillis, John Kennedy (R-LA), Hagerty, Cramer, and Daines, also pushed FHFA Director Sandra Thompson to abandon plans to transition from the current requirement that lenders provide credit reports from all three (tri-merge) national consumer reporting agencies (CRAs) to only two (bi-merge), arguing the move would negatively impact access to credit. 

The questions around if, when, and how California will regulate digital assets were partially answered last week as California Governor Gavin Newsom signed a new licensing bill (CA AB39). The Digital Financial Assets Law (the “DFAL”) goes into effect July 1, 2025. It’s CA’s first comprehensive framework to regulate the digital asset market. The new law provides the CA Department of Financial Protection and Innovation (the “DFPI”) with rulemaking authority and an 18-month implementation date. Read our full alert here

Following Majority Leader Steve Scalise (R-LA) announcing he is no longer running for Speaker of the House, House Judiciary Chairman Jim Jordan (R-OH) will run for Speaker again, after narrowly losing the nomination to Majority Leader Scalise, against Rep. Austin Scott (R-GA).

Need to catch up on what happened last week? Check out our End of Week Wrap Up here