All in Regulatory Update

CFPB: Overdraft/NSF Down Nearly 50% Versus Pre-Pandemic Levels

Adam Witmer
Regulatory Update

On May 24, 2023, the CFPB published a report providing an analysis of overdraft and NSF fees reported by banks with assets over $1 billion, which have been required to report OD/NSF fee revenue in Call Report data since 2015. Based on the report, data from the fourth quarter of 2022 data suggest over $5.5 billion reduction on an annual basis going forward but fees still totaled $7.7 billion in 2022.

CFPB Takes Action Against Citizens Bank for Unlawful Credit Card Servicing

Adam Witmer
Regulatory Update

On May 23, 2023, the CFPB reached a settlement to resolve allegations that Citizens Bank violated consumer financial protection laws and rules that protect individuals when they dispute credit card transactions. According to the CFPB, Citizens Bank failed to manage and respond to credit card disputes and fraud claims properly. The order would, among other things, impose a $9 million civil money penalty on Citizens Bank.

FinCEN and BIS Issue Alert for Potential Russian Export Control Evasion Attempts

Adam Witmer
Regulatory Update, BSA

On May 19, 2023, FinCEN and U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a joint alert urging financial institutions to be vigilant against efforts by individuals and entities to evade BIS export controls implemented in connection with Russia's further invasion of Ukraine. The supplemental joint alert provides financial institutions additional information regarding new BIS export control restrictions related to Russia, as well as reinforces ongoing U.S. Government engagements and initiatives designed to further constrain and prevent Russia from accessing needed technology and goods to supply and replenish its military and defense industrial base.

Governor Bowman’s Speech at the 2023 TBA Annual Convention

Adam Witmer
Regulatory Update

On May 19, 2023, Federal Reserve Board Governor Michelle W. Bowman was invited to speak at the Texas Bankers Association Annual Convention where she talked about the considerations for revisions to the bank regulatory framework. Bowman was a former banker, former state bank commissioner, and a member of the Federal Reserve Board. Governor Bowman’s speech centered on the critical role of bankers in facilitating a strong economy.

CFPB Issues Guidance to Address Illegal “Reopening” of Deposit Accounts

Adam Witmer
Regulatory Update

On May 10, 2023, the CFPB issued a new circular affirming that a bank may violate federal law if it unilaterally reopens a deposit account to process transactions after a consumer has already closed it. The guidance is being issued as a result of complaints that even after a consumer completes all the required steps to close an account, their bank has “reopened” the closed account and assessed overdraft and nonsufficient funds fees. The CFPB also received reports from consumers that financial institutions have also charged account maintenance fees upon reopening, even if the consumer was not required to pay account maintenance fees prior to account closure.

CFPB Proposes New Rule for PACE Financing

Adam Witmer
Regulatory Update

On May 1, 2023, the CFPB issued a proposed rule to implement a Congressional mandate to establish consumer protections for residential Property Assessed Clean Energy (PACE) loans. The proposed rule would require lenders to assess a borrower’s ability to repay a PACE loan and would provide a framework for how these loans will be treated under the Truth in Lending Act. 

CFPB Issues Interim Final Rule for LIBOR Transition

Adam Witmer
Regulatory Update, Regulation Z

On April 28, 2023, the CFPB issued an interim final rule amending the agency’s 2021 LIBOR transition rule. The interim final rule contains updates to reflect the subsequent enactment of the Adjustable Interest Rate (LIBOR) Act and issuance of an implementing regulation by the Board of Governors of the Federal Reserve Board System. This interim final rule will further facilitate the orderly transition of those consumer loans that currently use the LIBOR index to other indices in anticipation of the planned cessation U.S. Dollar (USD) LIBOR after June 30, 2023.

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