All in Regulatory Update

FTC and Wisconsin Take Action Against an Auto Center for Discriminating Against American Indian Customers and Charging Unlawful Junk Fees

Adam Witmer
Regulatory Update, Fair Lending

On October 24, 2023, the Federal Trade Commission and the State of Wisconsin took action against Wisconsin auto dealer group Rhinelander Auto Center, its current and former owners, and general manager Daniel Towne for deceiving consumers by adding illegal junk fees onto car prices. In addition, the car dealer was found discriminating against American Indian customers by charging them higher financing costs and fees.

Agencies Issue CRA Final Rule

Adam Witmer
CRA, Regulatory Update

On October 24, 2023, the Federal Reserve Board, the FDIC and the OCC jointly issued a final rule to strengthen and modernize regulations implementing the Community Reinvestment Act (CRA) to better achieve the purposes of the law. The CRA is a landmark law enacted in 1977 to encourage banks to help meet the credit needs of their entire communities, especially in low- and moderate-income neighborhoods, in a safe and sound manner.

FinCEN Issues Alert Regarding Hamas’ Terrorist Activities

Adam Witmer
Regulatory Update, BSA

On October 20, 2023, FinCEN issued an alert to assist financial institutions in identifying funding streams for the terrorist organization Hamas. FinCEN’s action is, according to their press release, a response to Hamas’ horrific terrorist attack on the people of Israel, wherein 1,000 innocent civilians, including citizens of the United States, were wounded, killed, or taken hostage.

CFPB Proposes Rule to Accelerate Shift to Open Banking

Adam Witmer
Regulatory Update

On October 19, 2023, the CFPB proposed a rule that would accelerate a shift toward open banking, where consumers would have control over data about their financial lives and would gain new protections against companies misusing their data. According to the CFPB, the proposed rule would jumpstart competition by forbidding financial institutions from hoarding a person’s data and by requiring companies to share data at the person’s direction with other companies offering better products. 

FinCEN Proposes New Rule to Enhance Transparency in CVC Mixing and Combat Terrorist Financing

Adam Witmer
BSA, Regulatory Update

On October 19, 2023, FinCEN announced a Notice of Proposed Rule Making (NPRM) that identifies international Convertible Virtual Currency Mixing (CVC mixing) as a class of transactions of primary money laundering concern. The NPRM highlights the risks posed by the extensive use of CVC mixing services by a variety of illicit actors throughout the world and proposes a rule to increase transparency around CVC mixing to combat its use by malicious actors including Hamas, Palestinian Islamic Jihad, and the Democratic People’s Republic of Korea (DPRK). 

FRB Fines Metropolitan Commercial Bank for BSA Violations

Adam Witmer
BSA, Regulatory Update

On October 19, 2023, the Federal Reserve Board issued an enforcement action and fined Metropolitan Commercial Bank, of New York, New York, approximately $14.5 million for violations of customer identification rules and for deficient third-party risk management practices relating to the bank's issuance of prepaid card accounts. The Board conducted an investigation of MCB’s issuance of general purpose reloadable prepaid cards with MovoCash, Inc.,  a former third-party program manager for MCB’s Global Payments Group, that identified deficiencies in the Bank’s third-party risk management and compliance with the Customer Identification Program under BSA.

CFPB Takes Action Against Chime (Sendwave) for Deceptive Practices

Adam Witmer
Regulatory Update, UDAAP, Regulation E

On October 17, 2023, the CFPB took action against Chime Inc. for deceiving consumers about the speed and cost of remittance transfers through its mobile app, Sendwave. According to the CFPB’s press release, Chime also illegally forced consumers to waive their legal rights, failed to provide consumers with legally required disclosures and receipts, and failed to properly investigate consumer disputes and errors.

CFPB and DOJ Issue Joint Statement Warning Against Immigrant Discrimination

Adam Witmer
Regulatory Update, Fair Lending

On October 12, 2023, the CFPB and the DOJ issued a joint statement that reminds financial institutions that all credit applicants are protected from discrimination on the basis of their national origin, race, and other characteristics covered by the Equal Credit Opportunity Act, regardless of their immigration status. The joint statement was issued in light of consumers’ reports on being rejected for credit cards as well as for auto, student, personal, and equipment loans because of their immigration status, even when they have strong credit histories and ties to the United States and are otherwise qualified to receive the loans.

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