In this Issue. The Federal Trade Commission (FTC) provided its annual letter to the Consumer Financial Protection Bureau (CFPB) on its 2023 Equal Credit Opportunity Act (ECOA) activities; the CFPB updated its supervisory appeals process; and the Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) released Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) stress test scenarios for 2024. These and other developments are discussed in more detail below.

Regulatory Developments

FTC Provides Annual Letter to CFPB On 2023 Equal Credit Opportunity Act Activities
On February 16, in response to a CFPB request for information regarding the FTC's enforcement actions, the FTC provided its annual letter to the CFPB on the FTC's 2023 ECOA activities, including information on its enforcement activities, research, and policy developments under the purview of ECOA and Regulation B. Among other topics, the letter highlighted successful settlements with auto dealers that were alleged to have discriminated against black consumers and the FTC's work as a member of the Interagency Task Force on Fair Lending. The letter also outlined the FTC's initiatives designed to assist businesses and consumers navigate various ECOA issues.

CFPB Updates Supervisory Appeals Process
On February 16, the CFPB updated to its appeals process for supervisory findings made during examinations. Changes include:

  1. Any CFPB manager may now sit on the appeals committee, as long as the manager has experience in the relevant issue and did not participate in the underlying matter, whereas, previously, only managers from the CFPB's Supervision team could participate;
  2. Appeals may now be remanded to Supervision staff for consideration of a modified finding, adding to the existing options of the finding being upheld or rescinded; and
  3. Institutions may now appeal any compliance rating arising out of an examination, whereas, previously, institutions could only appeal "adverse ratings" of three to five.

The Federal Reserve, FDIC, and OCC Release Dodd-Frank Act Stress Test Scenarios for 2024
On February 15, the Federal Reserve, FDIC, and OCC released the annual Dodd-Frank Act stress test scenarios for 2024 for their respective covered institutions. The scenarios test for resilience under hypothetical economic conditions, including under baseline and severely adverse scenarios, such as severe global recession. The OCC and FDIC stress tests must be submitted to their respective agency on or before April 5, and the reporting entity must publish the results on their website or in any other forum that is reasonably accessible to the public between June 15 and July 15. The Federal Reserve will release results of its stress test in June 2024.

Check Out Goodwin's Latest Industry Insights

Upcoming Webinar: Consumer Financial Services: Emerging Issues for 2024 (March 7, 2:00-3:00 PM ET)
Goodwin partner Kyle Tayman will moderate a webinar with partner Levi Swank and associate Viona Harris following Goodwin's publication of its annual report on consumer financial services. This report highlights the market trends, legal developments, and enforcement dynamics that defined 2023, and offers insights about the evolving opportunities and challenges facing stakeholders in 2024. This webinar will cover key areas of regulatory and enforcement focus Goodwin expects to see in 2024. It will also address key rules, regulations, and guidance related to: consumer fees, including "junk" fees and fees for requesting financial accounting information; data privacy and the CFPB's rulemaking on personal financial data rights; fair lending and the use of artificial intelligence; and consumer payments and small dollar lending in the digital age.

To register, click here.

FinCEN Proposes AML Program Rule for Investment Advisers
The Financial Crimes Enforcement Network (FinCEN), a bureau within the US Treasury Department, has issued a proposed rule that would subject certain investment advisers to anti-money laundering (AML) and countering terrorist financing (CTF) compliance requirements under the Bank Secrecy Act (BSA). In proposing the rule, FinCEN cited concerns that investment advisers could be exploited by illicit actors to gain access to the US financial system or by foreign governments to obtain access to or information about certain technologies and services with national security implications. Read the full client alert here.

SEC to Ban Exchange Volume-Based Pricing Tiers
While the SEC meddling in industry pricing and other commercial matters is not a new phenomenon, a recent SEC proposal reflects an enhanced willingness by the agency to tightly grip the industry's purse strings (and a slow but steady regulatory creep that some would argue has degraded free enterprise). In taking this step, the agency has also pitted those exchanges that currently use volume-based pricing tiers against their members that historically have not been able to qualify for the most attractive pricing. This proposal also comes at a peculiar time, given that the SEC has separately proposed changes to minimum stock pricing increments, access fee caps, and best execution standards that could conflict with, if not wreak havoc on, exchange and member pricing and order routing decisions. Read the full client alert here.

Corporate Transparency Act (CTA) Resource Center
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Consumer Finance Insights (CFI) Blog
The latest on consumer finance regulation, litigation, and enforcement.

Fintech Flash
The latest news and developments for the rapidly evolving fintech industry – which often can change in a flash.

Bank Failure Knowledge Center
Timely updates on important developments following the March 2023 US bank failures.

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