In this Issue. The Office of the Comptroller of the Currency (OCC) published a proposal to amend regulations implementing the Freedom of Information Act (FOIA); the Consumer Financial Protection Bureau (CFPB) published an order establishing supervisory authority over a nonbank installment lender and released its annual Good Accounting Obligation in Government Act (GAO-IG Act) report; and the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) published a small entity compliance guide for the Corporate Transparency Act's Beneficial Ownership Information (BOI) Access and Safeguards Rule (Access Rule). These and other developments are discussed in more detail below.

Regulatory Developments

OCC Amends FOIA Regulations

On February 22, the OCC proposed amending its regulations implementing FOIA. The amendments are intended to bring the OCC's regulations into alignment with the statute, providing for expedited processing of FOIA requests when the requestor "demonstrates a compelling need" (e.g., where the failure to provide the information could "pose an imminent threat to life or physical safety of an individual" or when there is an urgency on the part of the requestor to inform the public concerning actual or alleged federal government activity) and processes to appeal denials of such requests for expedited processing and denials of requests for fee waivers.

The proposal would also bring the OCC's regulations into alignment with a 2019 Supreme Court case holding that commercial or financial information submitted to the government will be considered "confidential" under FOIA exemption 4, which exempts certain trade secrets and privileged or confidential commercial or financial information from public disclosure where the information is "both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy." With the proposed amendment, the regulation would reflect that a submitter is not expected to demonstrate or assert that the disclosure of such information would cause substantial competitive harm.

Comments are due by April 22, 2024.

CFPB Orders Federal Supervision for Installment Lender Following Contested Designation

On February 23, the CFPB published its first supervisory designation order in a contested matter, establishing its supervisory authority over a nonbank installment lender. The CFPB's supervisory authority enables it to require reports from and conduct periodic examinations of supervised entities. In determining that the lender was subject to the CFPB's supervisory authority, the CFPB concluded that the lender was offering or providing a consumer financial product or service and that the CFPB had reasonable cause to determine that the lender's conduct poses risk to consumers based on consumer complaints.

CFPB Releases its Annual Good Accounting Obligation in Government Act Report

On February 23, the CFPB released its annual report to Congress on the status of open public audit recommendations from federal watchdog agencies, as required by the 2019 GAO-IG Act. Key recommendations from the agencies for the CFPB include:

  1. Issuing clarification on the application of the Truth in Lending Act's definition of "credit" for earned wage access products not covered by its November 2020 advisory opinion.
  2. Coordinating with the federal banking regulators to clarify guidance for fintech lenders on issues including their use of alternative data and risks posed by blockchain technology.
  3. Determining the best way to ensure routine oversight of Servicemembers Civil Relief Act compliance for all nonbank private student loan lenders and servicers.
  4. Issuing guidance on disclosure rules for deposit insurance to credit unions, including in marketing and advertising communications.
  5. Issuing guidance to credit reporting agencies on reasonable procedures for assuring maximum possible accuracy of consumer report information and the CFPB's expectations regarding reasonable investigations of consumer disputes.

FinCEN Issues Small Entity Compliance Guide for Beneficial Ownership Information Access and Safeguards Requirements

On February 20, FinCEN published a Small Entity Compliance Guide that provides an overview of requirements in the Corporate Transparency Act's BOI Access Rule. The guide summarizes the Access Rule's requirements that pertain to small financial institutions' authorized access to and use of BOI. Under the Access Rule, BOI reported to FinCEN is confidential, must be protected, and may be disclosed only to authorized Federal agencies, state, local, tribal, and foreign governments, and financial institutions.

As a reminder, FinCEN is now accepting BOI reports. Reporting requirements and filing deadlines can be found here. Please also refer to Goodwin's Corporate Transparency Act (CTA) Resource Center.

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.

FINRA Proposes to Add 'Knowledgeable Employees' to Category of Persons Who May Receive Projections and Targeted Returns Under Rule 2210

This amendment builds on the Financial Industry Regulatory Authority's (FINRA) recent willingness to relax the prohibition on the use of projections and targeted returns in the marketing materials broker-dealers deliver to institutional investors and qualified purchasers, but the amendment does not otherwise expand the exception for use with retail investors generally. The accompanying response to comments also provides useful clarification on the presentation of IRR on unrealized properties if the proposal is adopted. To learn more, view a recent client alert.

Corporate Transparency Act (CTA) Resource Center
Go-to resource with on-demand webinars and compliance toolkit.

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.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.