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During a speech earlier this week, Comptroller of the Currency, Jonathan V. Gould addressed the House Committee on Financial Services regarding his agency’s “work implementing the President’ economic agenda by ensuring that America’s federal banking system is safe and sound, and remains the world’s most trusted, dynamic, and resilient.”
The Consumer Financial Protection Bureau, which has seen the scope of its activities, funding and staffing dramatically impacted since January of this year, has introduced a “Humility Pledge” that must be read at the beginning of a supervision exam by the CFPB examiners.
As of last week, Monday, November 10th, the Tenth Circuit has rescinded a preliminary injunction against a Colorado state law opting-out from DIDMCA and remanded the case back to the United States District Court for the District of Colorado. This means that it is now illegal for out-of-state banks that are not national banks to export interest rates into Colorado.
The Consumer Financial Protection Bureau has faced significant operational constraints under recent changes in the present administration and Congress. With its budget significantly reduced and market concerns related to this week’s announcement about bureau leadership, financial institutions will likely have substantive questions about their ongoing consumer financial services compliance.
The Supreme Court handed down an opinion last year regarding national bank preemption in the case Cantero v. Bank of America, which we wrote about here. In that case, which involved a Second Circuit decision regarding a New York state law requiring the payment of interest on mortgage escrow balances, the Court reemphasized the preemption standard established in its Barnett Bank of Marion County v. Nelson opinion, which was enacted into law by Congress in Dodd-Frank (12 U.S.C. §25b).
Laboring in the shadow of the Consumer Financial Protection Bureau since 2011, the Federal Trade Commission has been an important component of Federal law enforcement efforts to ensure that the nation’s financial institutions are complying with consumer financial protection laws.
As summer comes to an end, here is a round-up of regulatory activities in financial services:
On August 19, the FDIC Board unanimously approved issuance of a proposed rule that seeks to amend advertising disclosures and signage regarding deposit insurance. In 2023, the FDIC updated its rules regarding required advertising disclosures for deposits and representations related to the insured status of deposits. These updated rules are found at 12 CFR § 328, Subparts A and B.
Just days prior to the passage of the GENIUS Act on stablecoins by Congress, on July 14th, the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued a joint statement called “Crypto-Asset Safekeeping by Banking Organizations”. Safekeeping refers to any service provided by banks that involves “holding an asset on a customer’s behalf” and safekeeping of crypto-assets means controlling the keys associated with the crypto-assets.
It has been difficult to keep up with all of the changes that have been happening with Consumer Financial Protection Bureau lawsuits and interpretations because the CFPB has not been sending out press releases announcing all of its actions, nor is there a Director of the CFPB that is making these announcements through other channels. Indeed, the last press release they posted was May 6. While we have been keeping track of many of the CFPB changes in our newsletter, there are some that we have not mentioned yet.