Jun 14
Jun 14 CFPB Takes Action Against Phoenix for Medical Debt Collection and Credit Reporting Violations

On June 8, 2023, the CFPB took action against medical debt collector Phoenix Financial Services (Phoenix) for numerous debt collection and credit reporting violations. According to the CFPB, Phoenix continued to attempt to collect on debts that were not substantiated even after consumers disputed the validity of the debt.

Jun 13
Jun 13 Agencies Issue Final Guidance on Third-Party Risk Management

Adam Witmer

On June 8, 2023, the Federal Reserve, the OCC, and the FDIC issued a final joint guidance on managing risks associated with third-party relationships. The guidance provides sound principles that support a risk-based approach to third-party risk management that banking organizations may consider when developing and implementing risk management practices for all stages in the life cycle of third-party relationships.

Jun 13
Jun 13 CFPB Issues Spotlight Regarding Use of AI Chatbots in Banking

Adam Witmer

Regulatory Update

On June 6, 2023, the CFPB released an issue spotlight that examines the use of chatbots in the banking industry. The spotlight specifically focuses on the use of artificial intelligence (AI) chatbots and the potential risks of violating the regulations when customer needs are not met.

Jun 12
Jun 12 PAVE Task Force Takes Action to Address Appraisal Bias

Adam Witmer

Appraisals, Regulatory Update

On June 1, 2023, the Biden-Harris Administration’s PAVE Task Force announced a new set of actions to address appraisal bias in the housing market. The Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) was created in June 2021 by President Biden, with the aim of rooting out bias in the home appraisal process.

Jun 9

Jun 9 VIDEO: When must a borrower receive the appraisal?

Adam Witmer

Regulation B, Appraisals

In this Compliance Clip (video), Adam breaks down the requirements in Regulation B as to when a borrower must get a copy of the appraisal used in their loan. Not only is the timeframe for delivering the appraisal discussed, Adam also covers when the appraisal delivery requirements of Regulation B apply. A transcript of this video is now available.

Jun 8
Jun 8 FTC Submits Annual Report on TILA, CLA, and EFTA Enforcement

Adam Witmer

Regulatory Update

On June 8, 2023, the FTC submitted its annual enforcement report to the CFPB on its enforcement efforts and related activities in 2022 on the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA). The report highlights the FTC’s enforcement actions related to the acts and their implementing regulations, including in the areas of automobile purchases and financing, payday lending, credit repair and debt relief, other credit, and electronic fund transfers.

Jun 5
Jun 5 Agencies Propose Rule on AVMs Quality Control Standards

Adam Witmer

Regulatory Update, Appraisals

On June 1, 2023, the federal regulatory agencies requested public comment on a proposed rule designed to ensure the credibility and integrity of models used in real estate valuations. Specifically, the proposed rule would implement quality control standards for automated valuation models (AVMs) used by mortgage originators and secondary market issuers in valuing real estate collateral securing mortgage loans.

Jun 5
Jun 5 CFPB Warns Consumers That Funds on Payment Apps May Be Unsafe

Adam Witmer

Regulatory Update

On June 1, 2023, the CFPB published an issue spotlight on digital payment apps heavily used by consumers and businesses. The CFPB also issued a consumer advisory for customers holding funds in these apps and how they can make sure their funds remain safe.

Jun 2

Jun 2 VIDEO: How to Identify Covered Borrowers Under MLA

Adam Witmer

MLA

In this Compliance Clip (video), Adam discusses how to identify covered borrowers under the Military Lending Act (MLA). MLA provides special protections for active duty servicemembers like capping interest rates on many loan products. In particular, Adam talks about the two safe harbors that the regulation provided in determining a covered borrower.

Jun 1
Jun 1 CFPB Fines OneMain for Deceptive Sales Practices

Adam Witmer

Regulatory Update, UDAAP

On May 31, 2023, the CFPB has ordered installment lender OneMain Financial to pay $20 million in redress and penalties for failing to refund interest charged to 25,000 customers who cancelled purchases within a purported “full refund period,” and for deceiving borrowers about needing to purchase add-on products to receive a loan. According to the CFPB, OneMain pushed its employees to hit sales targets and illegally withheld funds.