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On March 9, 2022, President Biden signed an Executive Order on Ensuring Responsible Development of Digital Assets (“Executive Order”) to mobilize the federal government to develop a strategy for digital assets, intending to encourage innovation in a manner that mitigates the risks to consumers, investors, and businesses. The Executive Order mandates an interagency approach across several executive departments and federal agencies to conduct reports and analyses on key issues impacting digital assets, including consideration of U.S. Central Bank Digital Currencies (“CBDC”). The Executive Order identifies six primary policy objectives:

  1. protect U.S. consumers, investors, and businesses;
  2. protect U.S. and global financial stability and mitigate systemic risk;
  3. mitigate the illicit finance and national security risks posed by misuse of digital assets;
  4. reinforce U.S. leadership in the global financial system and in technological and economic competitiveness;
  5. promote access to safe and affordable financial services; and
  6. support technological advances that promote responsible development and use of digital assets.

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Continue Reading Federal Framework for Digital Asset Regulation Comes into Focus

How to provide financial services to limited-English proficiency (“LEP”) consumers has become a pressing legal issue. Both federal and state laws provide requirements and limitations regarding translations of financial documents. Earlier this year, the Consumer Financial Protection Bureau (“CFPB”) published a comprehensive statement encouraging financial institutions to provide services to LEP consumers. The CFPB also took enforcement action against a company for, among other things, deceptively marketing to Spanish-speaking consumers. Following the trend to protect LEP consumers, a new Nevada law, effective October 1, 2021, makes it a deceptive practice to not  provide translations for certain financial contracts, agreements and disclosures (“Nevada Law”).

Under the Nevada Law, enacted as Assembly Bill No. 359, any person, who in the course of business, advertises and negotiates certain transactions in a language other than English must provide a translation of the contract or agreement that results from the advertising and negotiations. The translation must include every term and condition of the contract or agreement.…

Continue Reading New Nevada Law Protects Limited-English Proficiency Consumers by Requiring Translation of Certain Financial Legal Documents

It was only just over a month ago that President Biden selected David Uejio, a long-time senior leader at the CFPB with a low public profile, to lead the agency temporarily as Acting Director.  But already, Mr. Uejio has made very significant changes at the agency, implementing what he calls a “change of direction” with sweeping announcements on a weekly basis.  Even as the Senate prepares to consider President Biden’s nominee, current FTC Commissioner Rohit Chopra, to lead the CFPB for a full term at a March 2 hearing, it is time to assess where the agency stands after the Biden Administration’s first month and the likely changes still to come.
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Continue Reading The CFPB’s “Change of Direction” After 1 Month: New Goals, More Attorneys

Last week, we reported that on December 30, 2020, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) issued compliance assistance sandbox (“CAS”) approval to Payactiv, Inc. (“Payactiv”) regarding specific aspects of its earned wage access (“EWA”) product.

Payactiv’s Chief Legal Officer, David Reidy, expressed Payactiv’s reaction to the Approval Order this way – “We are grateful for the hard work and commitment the Bureau showed through this whole process. Everyone involved believes in EWA as an important and innovative benefit for workers. I couldn’t be more proud that Payactiv is the first and only EWA provider to be granted this approval.”…

Continue Reading A Detailed Look At The CFPB’s Historic Approval of Payactiv’s Earned Wage Access (EWA) Program under Regulatory Sandbox Policy

On December 30, 2020, the Consumer Financial Protection Bureau (“CFPB”) granted approval to Payactiv, Inc. (“Payactiv”) to offer its earned wage access (“EWA”) program under the CFPB’s Policy on the Compliance Assistance Sandbox, among the first approvals under the CFPB’s regulatory sandbox.

In its approval order, the CFPB granted approval to various aspects of Payactiv’s EWA program and grants Payactiv a safe harbor from liability under the Truth in Lending Act (“TILA”) and Regulation Z.…

Continue Reading CFPB Grants Historic Approval to Payactiv, Approving Payactiv’s Earned Wage Access (EWA) Program under Regulatory Sandbox Policy

In an earlier article, we provided an overview of the Consumer Financial Protection Bureau’s (“CFPB”) earned wage access (“EWA”) advisory opinion.  In the opinion, the CFPB identified seven requirements for a “Covered EWA Program,” i.e., an EWA program that would “not involve the offering or extension of ‘credit’” under the Truth In Lending Act (“TILA”) and its Regulation Z.
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Continue Reading CFPB’s Fee-Free Model Requirement Set Forth In Its Wage Access Advisory Opinion Raises More Questions

As we previously explained, the Consumer Financial Protection Bureau’s (“CFPB”) recently finalized Advisory Opinion Policy allows any person or entity to request an advisory opinion from the agency.  When the CFPB finalized that Policy on November 30, 2020, it concurrently issued its first two advisory opinions: one addressing earned wage access (“EWA”) programs, and one concerning private education loan products.  This article specifically comments on the important EWA advisory opinion.

EWA programs generally allow employees to access wages they have already worked for and accrued, but have not yet been paid.  In its EWA advisory opinion, the CFPB stated that EWA programs incorporating several specific features do “not involve the offering or extension of ‘credit,’” and thus, do not fall under the purview of Regulation Z, which implements the Truth In Lending Act (“TILA”).…

Continue Reading CFPB Unveils In First Advisory Opinion That TILA Does Not Apply to Certain Earned Wage Access Products

The Consumer Financial Protection Bureau (“CFPB”) announced in March 2020 that it would develop a new advisory opinion program under which it would publish in the Federal Register responses to questions seeking clarification of ambiguities in federal consumer financial law.  On November 30, 2020, the CFPB issued a final Advisory Opinion Policy (“AO Policy”) setting forth specific procedures for its Advisory Opinion Program.

Opinions issued under the AO Policy will be interpretive rules under the Administrative Procedure Act that respond to a specific need for clarity on a statutory or regulatory interpretive question.  See 5 U.S.C. § 553(b).  Each advisory opinion will include a summary of the material facts or covered products, and the CFPB’s legal analysis of the issue.  The CFPB expects that its advisory opinions will apply not only to the requestor, but also “to similarly situated parties to the extent that their situations conform to the summary of material facts or coverage in the advisory opinion.”…

Continue Reading CFPB Finalizes Advisory Opinion Program Opening Door for Those Seeking Clarity on Ambiguous Statutory or Regulatory Questions

The recent final rule (the “Rule”) implementing the Fair Debt Collection Practices Act (“FDCPA”) only directly governs parties defined as “debt collectors” by the FDCPA, principally meaning those who collect delinquent debt for others.[1]  However, this Rule from the Consumer Financial Protection Bureau, accompanied by a 560-page Preamble, will also likely influence the collection activities of “creditors” — i.e., those collectors that fall outside that “debt collector” definition — in various ways.[2]  The Rule also will affect how creditors should work with the debt collectors they hire.  In this Alert, we focus specifically on these different impacts of the Rule on creditors.  The Rule will take effect one year from the date it is published in the Federal Register.
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Continue Reading What Creditors Need to Know About the Final Debt Collection Rule

Announcements Mark Out a Clearer Path, but MSAs and Gifts Still Require Careful Review

Last week, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) announced significant changes to how it will view the legality of Marketing and Services Agreements (“MSAs”) under the Real Estate Settlement Procedures Act (“RESPA”).  Most strikingly, the Bureau formally rescinded its controversial Compliance Bulletin 2015-05:  RESPA Compliance and Marketing Services Agreements (Oct. 8, 2015) (“2015 MSA Bulletin”).  MSAs historically have been used as a way for settlement service providers to gain access to additional potential customers via paid advertising and marketing services.  But the 2015 Bulletin, issued after a string of Bureau RESPA enforcement actions, expressed the view that virtually all MSAs should be scrutinized and pose a high risk of violating RESPA’s prohibitions on paid referrals and/or the splitting of unearned fees.[1]

In addition to rescinding the prior guidance, the Bureau last week also released a slew of new “Frequently Asked Questions” (“FAQs”) on the legality of MSAs, gifts and promotional activities, and other RESPA matters.  In all, the Bureau’s actions last week on MSAs in particular amount to a further repudiation of aggressive RESPA interpretations that the agency advanced during the last decade.…

Continue Reading CFPB Rescinds RESPA Bulletin on Marketing and Services Agreements and Publishes Important FAQs