The Biden-Harris Administration announced broad new actions aimed at protecting customers from junk fees. The Federal Trade Commission (FTC) is proposing a rule that would ban businesses from charging hidden and misleading fees and require them to show the full price up front. The Consumer Financial Protection Bureau (CFPB), issued an advisory opinion interpreting Section 1034(c) of the Consumer Financial Protection Act (CFPA), clarifying large financial institutions’ obligations to provide basic information such as account balances and loan payoff amounts to consumers without charging fees.
The CFPB also released a special edition of its Supervisory Highlights focused on the agency’s efforts to protect consumers from illegal junk fees. The report covers junk fees in the areas of bank account deposits, auto loan servicing, and remittances found during examinations between February and August 2023. Additionally, on a press call, CFPB Director Rohit Chopra announced that later this month, the CFPB will propose new rules to create more competition in banking to make it easier for consumers to switch their accounts, find more attractive rates, and avoid junk fees.
Sen. Sherrod Brown (D-OH), Chair of the Senate Committee on Banking, Housing, and Urban Affairs, released a statement supporting the CFPB and FTC’s actions aiming to limit junk fees
Federal Reserve Board (Fed or FRB) Vice Chair for Supervision Michael Barr delivered remarks entitled “Capital Supports Lending” at the American Bankers Association Annual Convention. Vice Chair Barr discussed the role of capital in the financial system.
FRB Governor Michelle Bowman delivered remarks on financial stability in uncertain times at the Reinventing Bretton Woods Committee and Policy Center for the New South Marrakech Economic Festival in Marrakech, Morocco. Governor Bowman discussed financial system vulnerabilities and risks and how financial regulators and central banks may be able to address and mitigate them.
FRB Vice Chair Philip Jefferson delivered remarks on the U.S. economic outlook and monetary policy transmission at the 65th Annual Meeting of the National Association for Business Economics.
FRB Governor Bowman delivered remarks on the economy and insights from past bank regulatory reform efforts at the Connecticut Bankers Association Annual Meeting. Governor Bowman discussed the Fed’s role and impact in banking regulation and supervision. Governor Bowman also discussed the economy and monetary policy.
The Office of the Comptroller of the Currency (OCC) announced the selection of Monica Fuentes Freas as a Deputy Comptroller for Large Bank Supervision (LBS). In this role, Ms. Freas will manage the supervision of a portion of the OCC’s large bank portfolio. She joins three other Deputies for Large Bank Supervision providing oversight of the large, complex financial institutions under OCC supervision. Ms. Freas will assume responsibilities for a portfolio of banks from Tanya Smith, who has been appointed Examiner-in Charge for Citibank following the retirement of Roberta Caruso.
The CFPB filed a lawsuit in federal court alleging that Freedom Mortgage Corporation submitted legally-required mortgage loan data that was riddled with errors. The CFPB alleges that Freedom’s practices violate both the Home Mortgage Disclosure Act and a 2019 consent order. In a recent separate matter, in August 2023 the CFPB fined Freedom $1.75 million for paying illegal kickbacks for mortgage loan referrals.
The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the District of New Jersey charging fraud against Or Patreanu of Israel, Snir Hananya of Italy, Elijah Samson of Germany, Artem Prokopenko of Ukraine, and Expected Value Plus Ltd., a Seychelles company, all d/b/a Trade2Get, Coinbull, Cryptonxt, Tradenix, Cryptobravos, Nittrex, Pinance, and Wobit (collectively, Cryptobravos). The complaint charges the defendants with fraudulently soliciting and misappropriating tens of millions of dollars from hundreds of individuals in the United States and other countries for Cryptobravos to trade bitcoin and other digital asset commodities for them.
The Federal Deposit Insurance Corporation (FDIC) launched a public campaign to increase the public’s awareness of deposit insurance and how it can protect people’s money in the event of a bank’s failure. The consumer-focused campaign, entitled “Know Your Risk, Protect Your Money,” aims to reach those who may have lower confidence in the U.S. banking system or who are unbanked, as well as those who use mobile payment systems, alternative banking services, and financial products that may appear to be FDIC-insured but are not.
The Securities and Exchange Commission (SEC) adopted rule amendments governing beneficial ownership reporting under Sections 13(d) and 13(g) of the Securities Exchange Act of 1934. The amendments update Regulation 13D-G to require market participants to provide more timely information on their positions to meet the needs of investors in today’s financial markets.
The Conference of State Bank Supervisors (CSBS) released the Community Banker Sentiment Index (CBSI). While the third quarter CBSI remained below the neutral level of 100 for the seventh quarter in a row, it bounced up 13 points to 86 from the last quarter. This is the highest CBSI level recorded since 91 a year ago and the CBSI’s second largest quarterly increase, following a 17-point increase in Q1 2021. In a special question, 87% of community bankers believe the U.S. economy is at the start of, or already in, a recession, down from 95% last quarter.
Sen. Brown released a statement regarding additional action in support of Israel. In the statement Brown noted, “While we undertake this work, the Banking and Housing Committee will examine the financing behind Hamas’s attacks, including whether cryptocurrency was involved, and what additional economic tools we need to stop state sponsors of terrorism, including Iran, from supporting Hamas and other terrorist groups.”
In addition, Senate Banking Committee Ranking Member Tim Scott (R-SC) is working on a bill that would immediately freeze $6 billion in Iranian assets held in Qatar. Sen. Scott also released a statement after the attack on Israel, calling for the Senate Banking Committee to hold a hearing with Secretary Janet Yellen and for a Senate investigation into the release of funds to Iran.
Governor Gavin Newsom signed California’s Delete Act into law, which would require data brokers to delete all information collected on individuals when requested. The law defines “data broker” as “a business that knowingly collects and sells to third parties the personal information of a consumer with whom the business does not have a direct relationship,” and excludes entities covered by the Fair Credit Reporting Act or the Gramm–Leach–Bliley Act.
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra delivered remarks at the Brookings Institute’s event entitled “Making America’s payment system work for a digital century.” Director Chopra said the agency is looking at “appropriate authorities to conduct supervisory examinations of nonbanks offering consumer payment platforms.” He announced that the notice of proposed rulemaking for consumer access to financial records (Section 1033 of the Dodd-Frank Act) will be released this month. The CFPB is also issuing supplemental market-monitoring orders to certain “big tech” companies regarding data usage; it is exploring additional guidance on the Electronic Funds Transfer Act and its application to digital assets; and the CFPB is looking into using supervision to examine nonbanks offering payments. Director Chopra also said the Financial Stability Oversight Council (FSOC) should examine systemically important financial institution (SIFI) designation for nonbanks. Read full remarks here.
Need to catch up on what happened last week? Check out our End of Week Wrap Up here.