Consumer Finance Monitor

In October 2023, the CFPB issued a groundbreaking proposal on personal financial data. This episode, which repurposes a webinar, begins with a review of the background of the rulemaking. We then discuss key provisions of the proposal, including the entities, data, and financial products and services that would be covered, the obligations that would be imposed on covered entities, and exceptions to the proposal’s requirements. We also look at the compliance timeline, practical takeaways, and the proposal’s operational impact on covered entities. We conclude with a discussion of the CFPB’s advisory opinion dealing with consumer requests for information. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion joined by Ronald Vaske, a partner in the Group, Kristen Larson, Of Counsel in the Group, and Gregory Szewczyk, a Ballard Spahr partner and Practice Leader of the firm’s Privacy and Data Security Group.

Our special guest is Zarik Khan, Founder of Finsolute Advisors. In October 2023, the Federal Reserve Board issued a proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction. We first look at the roles of the various parties involved in a typical transaction in which a consumer uses a debit card to make a purchase from a merchant and the various fees imposed in connection with the transaction. We then discuss how the current debit interchange fee cap contained in the Fed’s final rule implementing the Durbin Amendment (Regulation II) that went into effect in October 2011 has impacted each of the parties involved in a typical debit card transaction, the Fed’s rationale for its new proposal and related study, and the proposal’s implications for each of the parties. We conclude with a discussion of the proposal’s prospects and the potential impact of a U.S. Supreme Court decision overruling Chevron on the proposal if implemented. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts the conversation.

This special podcast episode, hosted by Senior Counsel and former Consumer Financial Services Practice Leader Alan Kaplinsky, sets the stage for the upcoming oral argument in the two U.S. Supreme Court cases where the fate of Chevron deference hangs in the balance. This episode provides an essential roadmap for anyone who will listen to the oral argument or is following this critical challenge to this important doctrine. Our special guest is Kent Barnett, Associate Dean of Academic Affairs and J. Alton Hosch Professor at the University of Georgia School of Law. On January 17th, the U.S. Supreme Court will hear oral argument in two cases, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. U.S. Department of Commerce, presenting the question of whether the Court should overrule, or at least clarify, its 1984 decision in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. As discussed in our earlier blog, that decision established what became known as “Chevron deference”, which requires judges to accept an agency’s interpretation of federal law if indicated by the outcome of a two-step analysis defined in the Chevron decision. In this special podcast, we first discuss the importance of Chevron deference, specifically with respect to the consumer financial services industry. We follow with an explanation of the background of the two cases to be argued, and a detailed explanation of the question now before the Court. Professor Barnett provides fascinating historical insights about the Chevron doctrine, and the political influences that first elevated it and then, more recently, have called it into question. We then explore why the Court now has agreed to reconsider Chevron, and the impact of the Chevron doctrine on the courtroom success of federal agencies. Finally, we venture predictions as to the likely outcome of the Loper Bright and Raimondo cases, including possible clarifications that would give courts further guidance on how to apply the Chevron framework, and the potentially seismic effects that might ensue if the Court should decide to overrule Chevron completely.

We discuss various issues faced by lenders and servicers when attempting to foreclose on “zombie” mortgages, meaning second mortgages on which the borrower has not made a payment for a considerable length of time and the lender or servicer has not previously taken action to foreclose. First, we look at the CFPB’s May 2023 advisory guidance on the enforcement of time-barred mortgage loans. We then discuss defenses to foreclosure raised by borrowers, specifically that the loan was charged-off, discharged in a bankruptcy, or time-barred, and look at decisions in the states of Washington, Colorado, and Utah in which courts have addressed these defenses. We conclude with a discussion of steps that lenders and servicers should consider taking before attempting to foreclose on a “zombie” mortgage. Melanie Vartabedian and Matthew Morr, partners in Ballard Spahr’s Consumer Financial Services Group, discuss the issues.

Our special guest is Andrea Boyack, Professor, University of Missouri School of Law. We first discuss the principles that underlie our current system of consumer contracts and the system’s role in promoting transactional efficiency and other objectives. Prof. Boyack then provides her views on why the application of traditional contract law to the modern consumer contract context is not in the best interests of consumers and offers a different approach to consumer contracts in which a consumers can shape the terms of their contracts. In particular, she explains how this approach would treat a consumer’s choice to do business with a company as legally distinct from assent to particular terms in the company’s contracts.  Prof. Boyack also shares her views on the recent Restatement of the Law of Consumer Contracts. We conclude with a discussion of the controversy that surrounds arbitration provisions, how Prof. Boyack’s new approach to consumer contracts would impact the use of such provisions, and what legal changes would be necessary to implement her approach. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts the conversation.

On October 24, 2023, the OCC, FDIC and Board of Governors of the Federal Reserve System jointly adopted final amendments to their regulations implementing the Community Reinvestment Act of 1977 (CRA). In this episode, which repurposes a webinar, we are joined by guest speaker Kenneth H. Thomas, Ph.D., Founder/CEO of Community Development Fund Advisors. After reviewing the background of the adoption of the CRA and implementing rules by the banking agencies, we discuss the key elements of the final rule. We look at the requirement for banks to delineate assessment areas in which their CRA performance will be evaluated, the tests under which banks’ CRA performance will be evaluated, the strategic plan option, and data collection and reporting requirements. In discussing the final rule’s requirements, we also consider how they apply to banks of different sizes. Throughout our discussion, Dr. Thomas provides his commentary on the final rule’s impact on the goals of CRA and CRA evaluations. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion, joined by Scott Coleman, a partner in the Group, and Sarah Dannecker, an associate in the Group.

Providers of consumer financial services that rely on federal preemption to charge customers uniform interest rates and fees on a nationwide basis are currently facing a series of legislative and litigation challenges. In this episode, which repurposes a recent webinar, we first discuss the U.S. Supreme Court’s grant of certiorari in Cantero v. Bank of America on the question whether the National Bank Act preempts state laws requiring the payment of interest on mortgage escrow accounts and look at the competing arguments and preemption standards under consideration. We then look at the Dodd-Frank Act’s provisions on federal preemption for national banks and federal savings associations, OCC regulations addressing the scope of federal preemption, and federal statutes providing interest rate exportation authority for national and state-chartered banks and other institutions. We then turn to current legal challenges to rate exportation authority, focusing on state laws opting out of federal law allowing interest rate exportation by state banks, state laws defining “true lender” to target nonbank/bank partnerships seeking to take advantage of federal interest rate exportation authority, and the California trial court’s recent ruling in a very important “true lender” lawsuit. We conclude with a discussion of the potential implications of a U.S. Supreme Court override of the Chevron deference framework for OCC and FDIC regulations interpreting federal statutes on interest rate authority of national and state banks. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion, joined by John Culhane, Reid Herlihy, and Ronald Vaske, partners in the Group, and Mindy Harris, Of Counsel in the Group.

This two-part podcast repurposes our most recent webinar on the latest salvo of actions in the Biden Administration’s initiative directed at combatting so-called “junk fees.” Launched in January 2022, the initiative shows no signs of abating. In Part II, we first look at the Consumer Financial Protection Bureau’s advisory opinion on fees charged by large banks and credit unions to respond to information requests, including the Bureau’s discussion of non-fee obstacles such as chatbots that could unlawfully impede consumers’ ability to make an information request. We then discuss the CFPB’s second edition of Supervisory Highlights focused on “junk fees,” taking a close look at the CFPB’s findings regarding deposit account fees, auto servicing fees, and remittance transfer fees and its discussion of the CFPB’s circular on reopening closed deposit accounts, a remedial action against an auto servicer, and risks in connection with payment processing platforms for student meal accounts. We also discuss CFPB “junk fees” enforcement actions involving NSF fees, fees for add-on products charged by an installment loan lender, and refinancing costs imposed by a high-cost installment lender, as well as state law activity in California and elsewhere related to “junk fees.” We conclude with a discussion of potential future CFPB rulemaking and other actions involving “junk fees,” steps providers should consider to reduce “junk fees” compliance risk, and the preemptive effect on state law of an FTC “junk fees” rule. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion, joined by John Culhane and Reid Herlihy, Partners in the Group, Michael Gordon and Kristen Larson, Of Counsel in the Group, and Roger Winston, a Partner in the firm and Leader of its Mixed-Use, Condominium, and Multifamily Development Team.

This two-part podcast repurposes our most recent webinar on the latest salvo of actions in the Biden Administration’s initiative directed at combatting so-called “junk fees.” Launched in January 2022, the initiative shows no signs of abating. In Part I, we first review the background of the initiative, the range of fees the Administration has labeled “junk fees,” and discuss the Administration’s focus on competition and its related guidance and directives to federal agencies. We then take a close look at the Federal Trade Commission’s proposed rule to regulate “junk fees,” including the rationale for the FTC’s decision to engage in rulemaking, the price and fee disclosures that would be required by the proposal, and how an FTC “junk fees” rule could be used in support of Consumer Financial Protection Bureau actions targeting “junk fees.” We conclude with a discussion of the impact of the Administration’s initiative and FTC proposal on “junk fees” related to rental housing. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion, joined by John Culhane and Reid Herlihy, Partners in the Group, Michael Gordon and Kristen Larson, Of Counsel in the Group, and Roger Winston, a Partner in the firm and Leader of its Mixed-Use, Condominium, and Multifamily Development Team.

In October 2023, the FTC issued a proposed “Rule on Unfair or Deceptive Fees” targeting so-called “junk fees.” Our special guest is Stacy Cammarano, Staff Attorney in the FTC’s Bureau of Consumer Protection, Division of Advertising Practices, and a lead attorney on the proposal. After reviewing how the FTC has previously used its enforcement authority to address “junk fees,” we discuss some of the key issues identified in comments received by the FTC on its October 2022 Advance Notice of Proposed Rulemaking on “junk fees.” We then look at the price and fee disclosures that would be required by the proposal, the businesses that would be covered, and examples of charges for mandatory ancillary goods or services by various industries that would have to be included in disclosed pricing. We also look at the relationship of the FTC’s proposal to “junk fees” initiatives of other federal agencies, such as the CFPB, and to state initiatives, and consider the impact of the U.S. Supreme Court’s AMG decision on the FTC’s use of rulemaking. We conclude with a discussion of likely next steps in the rulemaking process and what businesses can be doing now to reduce compliance risk. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion.