On March 17, 2025, the Office of the Comptroller of the Currency (OCC) announced that it conditionally approved a fintech business model for CenTrust Bank, N.A.’s (“CenTrust”), an Illinois based community bank chartered by the OCC.[1] CenTrust was acquired by SmartBiz Loans, which is a fintech company that provides an online platform to connect small business owners with lenders providing Small Business Administration (“SBA”) loans. Following the acquisition, CenTrust applied to change its business model to incorporate the SmartBiz Loans’ business model of providing SBA loans nationwide.

Continue Reading Another Fintech Company Acquires a National Bank Charter through Merger

On September 24, 2024, California enacted Assembly Bill 2863 (the “Bill”) to take effect on July 1, 2025.[1] The Bill updates California’s regulations governing automatic renewals and continuous services. An automatic renewal or continuous service (“auto renewal contract”) is defined as a contract that renews automatically at the end of a definite term or becomes a payable contract after a free trial period.[2] The Bill continues the state trend of expanding regulations to protect California consumers when enrolling in subscriptions.[3]

Continue Reading California Enacts New Bill to Strengthen Customer Protection on Automatic Renewals

On June 3, 2024, the Consumer Financial Protection Bureau imposed a new set of regulatory obligations on nondepository consumer-financial companies that are subject to court or administrative orders enforcing federal or state consumer-protection laws. The Bureau’s new rule creates a public registry of such orders dating back to January 1, 2017. It requires covered entities to submit the orders and information about them to populate the registry. And it requires covered entities subject to CFPB supervision to also file annual statements about their ongoing compliance with these orders and to self-report any violations or noncompliance that the supervised entity identified during the prior year. The rule marks a new assertion of regulatory oversight by the CFPB with consequential implications, creating increased risks of investigation and enforcement by the Bureau and other regulators and the potential for increased public scrutiny. For supervised nonbanks, the rule may also increase the risk of examination by CFPB officials based on the nonbanks’ annual statements.

Continue Reading CFPB Establishes New Obligations for Covered Nondepository Institutions Subject to Judicial or Administrative Enforcement Orders

Yesterday, the Consumer Financial Protection Bureau updated its process for designating a nonbank for supervision. Initially issued in 2013, the revised rule specifically establishes the CFPB’s procedures in determining whether a nonbank “poses risk to consumers” and is thus subject to the Bureau’s supervisory authority. The CFPB has had the authority to supervise such nonbanks since its creation. But it was not until 2022 that the CFPB announced that it would begin to use this so-called “dormant authority” to examine nonbanks. Last year, the CFPB initiated several supervisory-designation proceedings against nonbanks under that previously dormant authority, leading to the Bureau’s first-ever order in a contested matter establishing supervision over a nonbank. 

Continue Reading CFPB Updates Process to Designate Nonbanks for Supervision

On October 11, 2023, President Biden, Federal Trade Commission (FTC) Chair Lina Khan, and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra announced the latest developments in the government’s efforts to tackle junk fees. Junk fees are hidden, surprise fees imposed on customers without clear disclosure.[1] The CFPB and FTC have taken several measures to crack down on junk fees since early 2022, including:

  • On January 26, 2022, the CFPB issued a request for information regarding fees that consumers believed to be covered by a baseline price, unexpected fees, and fees that seemed too high or unclear.[2]
  • On March 23, 2023, the FTC proposed a “click to cancel” provision requiring sellers to make it easier for consumers to cancel their recurring subscriptions and memberships.[3]
  • On June 22, 2022, the CFPB issued an advance notice of proposed rulemaking to address excessive credit-card late fees. [4] On February 1, 2023, the CPFB issued a proposed rule limiting and capping late fees.[5]
  • On June 29, 2022, the CFPB issued an advisory opinion affirming that “pay-to-pay” fees that are not authorized by the original loan violate the Fair Debt Collection Practices Act (FDCPA). “Pay-to-pay” fees are those that are imposed on consumers who want to make a payment in a particular way.[6]
  • On July 23, 2022, the FTC proposed a rule to ban junk fees and bait-and-switch tactics for car buyers.[7]
  • On October 20, 2022, the FTC published an advance notice of proposed rulemaking to crack down on junk fees, seeking comments on unnecessary charges, unavoidable charges, and surprise charges.[8]
  • On October 26, 2022, the CFPB issued guidance stating that imposing surprise bounced-check or overdraft fees are likely to be unfair and unlawful.[9]
  • On October 11, 2023, the CFPB published a Supervisory Highlights special edition covering junk fees in the areas of bank accounts, auto-loan servicing, and remittances that were identified during CFPB examinations between February and August 2023. The CFPB claims to have recovered and is refunding $140 million back to impacted customers.[10]

Earlier this week, the CFPB released an advisory opinion on fees related to consumers requesting information on products and services, and the FTC proposed a new rule banning hidden fees and bogus fees.

Continue Reading The FTC and CFPB Announce New Rules to Tackle Junk Fees

Much has been written about the Consumer Financial Protection Bureau’s recent “Policy Statement on Abusive Acts or Practices,”[1] in which the Bureau analyzed the prohibition on abusive conduct in the Consumer Financial Protection Act of 2010 (CFPA). In response to the statement’s publication in the Federal Register, comments were submitted by banks, credit unions, debt collectors, and others.[2] But the Bureau’s policy statement should be of particular interest to another class of persons: real-estate agents who participate in joint ventures with mortgage or title companies.

Continue Reading Real-Estate Agents Who Participate in Joint Ventures Should Be Wary of the CFPB’s Recent Policy Statement on Abusive Conduct

In the wake of Silvergate’s collapse, Silicon Valley Bank entering receivership and another bank following in SVB’s footsteps, startups and other companies directly affected by these events are struggling to manage their payroll and other obligations while credit facilities are frozen. Although depositors likely will be fully protected and most businesses can expect to avoid the brunt of this banking crisis, some employers still may face tough decisions.

Read on to learn about state and federal law considerations and recommended next steps for employers.

In December 2022, California’s new commercial lending disclosure law and complementary regulations went into effect, leading the way for other states to follow.

The new California law imposes disclosure requirements in commercial lending transactions. While this is not new for consumer lenders that are accustomed to complying with the Truth in Lending Act, this is uncharted territory in the commercial lending space. Like the federal Truth in Lending Act, the new California law is meant to provide prospective borrowers with an opportunity to see a concise summary of the obligation’s terms in an easy-to-read format. Ideally, this allows a prospective borrower to take the terms offered by two or more lenders and compare them, side by side, to determine the best offer.

Continue Reading California Leads the Way on Commercial Lending Disclosures

The Financial Crimes Enforcement Network (FinCEN) has recently issued an alert cautioning all financial institutions regarding potential investments in the U.S. commercial real estate (CRE) sector, by or on behalf of sanctioned Russian elites, oligarchs, their family members, and entities through which they act. This alert complements sustained efforts of the U.S. government, in response to Russia’s war against Ukraine, to isolate sanctioned Russian persons from the international financial system. It highlights specific vulnerabilities to sanctions evasion in the CRE sector, which may be exploited by Russian elites or their proxies, and is based on a recent review of Bank Secrecy Act (BSA) reporting. It also provides financial institutions with guidance on identifying potential red flags and typologies of sanctions-evasion activities.

Continue Reading FinCEN Alert Highlights Potential U.S. Commercial Real Estate Investments by Sanctioned Russian Elites and Their Proxies

On December 15, 2022, the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a lengthy Notice of Proposed Rulemaking to implement beneficial ownership information (“BOI”) access and safeguards provision of the Corporate Transparency Act (“CTA”) (the “Access NPRM”).  The Access NPRM provides a framework by which authorized recipients may access BOI, providing different tiers of access for agencies and financial institutions who may seek this information in connection with anti-money laundering efforts.

Continue Reading FinCEN Issues Notice of Proposed Rulemaking on Access to Beneficial Owner Information