Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau


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Photo of Consumer Financial Services Law Blog Jacqueline M. Allen
Associate
jallen@dykema.com
214-698-7832
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Showing 12 posts by Jacqueline M. Allen.

FinCEN Publishes New Advisory on Cyber-Events and Cyber-Enabled Crimes

The Financial Crimes Enforcement Network (“FinCEN”) recently published an Advisory to Financial Institutions on Cyber-Events and Cyber-Enabled Crime. The Advisory does not change or create any new regulatory obligations, but it does clarify how existing Bank Secrecy Act (“BSA”) regulations for reporting cyber-events and cyber-enabled crimes apply to financial institutions. Specifically, the Advisory provides additional guidance for reporting cyber-enabled crime and cyber-enabled events through Suspicious Activity Reports (“SARs”), including cyber-related information in SARs; collaborating between BSA units and in-house cybersecurity units to identify suspicious activity; and sharing cyber-related information among financial institutions to prevent and report money laundering, terrorism financing, and cyber-enabled crimes. Read More ›

In Brief: CFPB Issues Long-Awaited Final Prepaid Rule

After more than four years of anticipation and speculation from the financial services community, the Consumer Financial Protection Bureau (CFPB) unveiled its final prepaid rule on October 5 (accompanied by an animated video explaining highlights of the rule). Read More ›

CFPB Releases Outline of Proposals for Debt Collection Rules

The Consumer Financial Protection Bureau (“CFPB”) announced yesterday at a field hearing in Sacramento, California, that it is considering several potential approaches to issuing rules on debt collection. The CFPB would take this action pursuant to its authority under the Dodd-Frank Act to issue regulations implementing the Fair Debt Collection Practices Act (“FDCPA”) as well as to issue regulations prohibiting unfair, deceptive, and abusive acts and practices. This rulemaking would mark the first time regulations would be issued to implement the FDCPA, and it is likely to have significant effects on the debt collection industry. Read More ›

The CFPB’s Small-Dollar Lending Proposal: First UDAAP Rulemaking Proposal Hits the Streets

After much anticipation, the Consumer Financial Protection Bureau (“CFPB”) has released its proposed small-dollar lending rule. Spanning 1,334 pages in length, the proposal marks the first time the CFPB has exercised its authority to issue regulations prohibiting unfair, deceptive, or abusive acts or practices (“UDAAP”). Until now, the CFPB has elected to define UDAAP through its enforcement actions. And despite the proposal’s length, it does not appear that it fully covers the waters of consumer credit in the CFPB’s sights. Accompanying the proposed rule is a Request for Information (“RFI”) asking additional questions about certain other high-cost, longer-term installment loans and open-end lines of credit, raising the possibility of additional rulemakings in the future.   Read More ›

Illinois Strengthens Data Breach Notification Statute

Illinois recently amended its data breach notification law, joining a number of states that have also amended their own breach notification statutes this year. States appear to be looking to strengthen their breach notification laws by expanding the definition of "personal information" covered by the laws, clarifying the role of encryption in providing a safe harbor, and redefining content and timing requirements for notifications provided to affected persons. Read More ›

FinCEN Releases Long-Awaited Beneficial Ownership Final Rule

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has finalized its long-awaited beneficial ownership rule, which it proposed in 2014. The regulation does two things.  First, it extends Customer Due Diligence (CDD) requirements under Bank Secrecy Act (BSA) rules to the natural persons behind a legal entity. Second, the regulation adds a fifth pillar to the traditional “four pillars” of an effective anti-money laundering (AML) program by requiring covered financial institutions to establish risk-based procedures for conducting ongoing customer due diligence. As of May 11, 2018, entities subject to BSA will be required to identify and verify the identity of beneficial owners of legal entity customers at the time the customer opens a new account, subject to certain exclusions and exemptions, as well as develop risk profiles and conduct ongoing monitoring of customers. Read More ›

CFPB to Issue Proposal in July Amending Rules on TILA-RESPA Integrated Disclosures

Real estate lenders and agents struggling with the new TILA-RESPA Integrated Disclosure rules will have the opportunity to suggest improvements to the rules this summer. On April 28, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray sent a letter to eight financial industry trade groups stating that the agency intends to propose new amendments in late July 2016 to the rules synthesizing mortgage lending disclosures under the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA). Issued pursuant to the Dodd-Frank Act, the rules are known as the TILA-RESPA Integrated Disclosures (TRID) rule, also referred to by the CFPB as the Know Before You Owe rules. Read More ›

CFPB Takes First Data Security Enforcement Action Against Dwolla

The Consumer Financial Protection Bureau (“CFPB”) made headlines last week by taking action against Dwolla, an online and mobile payments platform. The CFPB imposed a $100,000 penalty against Dwolla, and while the dollar amount of the penalty may appear to be small compared to other civil money penalties, the action is significant because it is the first action the CFPB has taken in the data security area and provides insight into future enforcement activities surrounding data security by the CFPB. It also serves as a notable reminder of the CFPB’s broad enforcement powers, which go beyond financial institutions to non-FI companies that deliver financial products and services to consumers. While the CFPB lacks authority over the substantive data security requirements that are enforced by the federal financial regulators, that poses no obstacle to the CFPB’s ability to take an action, like this, initiated under its authority to police “deceptive” acts or practices. Read More ›

Effective Immediately: New Exception to Annual Privacy Notice Requirement

An amendment to the Gramm-Leach-Bliley Act (“GLBA”) that was signed into law December 4, 2015, takes effect immediately and provides a new exception to the annual privacy notice requirement under GLBA. The existing language in GLBA requires financial institutions to provide their customers with initial and annual privacy notices regarding their privacy policies and information-sharing practices. Read More ›

New CFPB Guidance for Preauthorized Transfers

On November 23rd, 2015 the Consumer Financial Protection Bureau (“CFPB”) released Compliance Bulletin 2015-06 (the “Bulletin”), which clarifies requirements under the federal Electronic Fund Transfer Act (“EFTA”) and Regulation E for obtaining consumer authorizations for preauthorized electronic fund transfers (“EFTs”). The new guidance touches upon two issues: (1) obtaining oral authorizations for EFTs over the phone; and (2) obligations to provide a copy of EFT authorizations to consumers.  Read More ›