CFPB Sues for MLA Violations

MLA Violations - The CFPB sued MoneyLion Technologies, an online lender, and 38 of its subsidiaries, for imposing illegal and excessive charges on servicemembers and their dependents. The CFPB alleges that MoneyLion violated the Military Lending Act by charging more than the legally allowable 36% rate cap on loans to servicemembers and their dependents, through a combination of stated interest rates and monthly membership fees. The CFPB also alleges MoneyLion required customers to join a membership program to access certain “low-APR” loans, and then did not allow them to cancel their memberships until their loans were paid.

CFPB Supervisory Highlights

Supervisory Highlights – The CFPB published a special edition of its Supervisory Highlights focusing on recent examination findings related to practices by student loan servicers and schools that directly lend to students. This edition focuses on three sets of significant supervisory findings. First, Supervision initiated work at certain institutional lenders and found that blanket policies to withhold transcripts in connection with an extension of credit are abusive under the Consumer Financial Protection Act. Second, Supervision engaged in oversight of major Federal loan transfers and identified certain consumer risks related to those transfers. Third, Supervision identified a considerable number of violations of Federal consumer financial law by student loan servicers in administering Public Service Loan Forgiveness (PSLF), Income-Driven Repayment(IDR), and Teacher Loan Forgiveness (TLF).

From NCUA

Defending Against Ransomware Attacks – The NCUA, along with the FBI, Treasury Department, and the Wisconsin DFI, is holding a webinar on October 13, Ransomware in the Financial Sector. All of the webinar presentations will have real world examples to illustrate the potential impact of ransomware attacks. 

From the CFPB

No Action Letters – In 2019, the CFPB issued the Policy on No-Action Letters and the Policy on the Compliance Assistance Sandbox which set for how companies should submit No-Action Letter applications and how the CFPB would assess and issue No-Action Letters. Under the policy, the CFPB would grant No-Action Letters to individual companies, advising recipients that the agency would not make supervisory findings or bring a supervisory or enforcement action against the company with respect to certain matters. The CFPB has now determined that the Policies do not advance their stated objective of facilitating consumer-beneficial innovation. As of September 30, 2022, the CFPB will no longer accept No-Action Letter or Compliance Assistance Sandbox applications submitted on a form using OMB Control No. 3170-0059

FinCEN Beneficial Ownership

Beneficial Ownership – The FinCEN issued a final rule establishing a beneficial ownership information reporting requirement. The rule will require most corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners—the persons who ultimately own or control the company, to FinCEN. The rule is effective January 1, 2024. Reporting companies created or registered before January 1, 2024, will have one year (until January 1, 2025) to file their initial reports, while reporting companies created or registered after January 1, 2024, will have 30 days after creation or registration to file their initial reports. Once the initial report has been filed, both existing and new reporting companies will have to file updates within 30 days of a change in their beneficial ownership information. The rule is one of three rulemakings planned to implement the Corporate Transparency Act. FinCEN will engage in additional rulemakings to (1) establish rules for who may access the beneficial ownership information, for what purposes, and what safeguards will be required to ensure that the information is secured and protected; and (2) revise FinCEN’s customer due diligence rule following the promulgation of the Beneficial Ownership Information reporting final rule.