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As a former senior enforcement attorney with the CFPB, James provides the industry knowledge and expertise that fintechs and financial institutions require when launching new products or facing regulatory scrutiny.

On March 29, the Federal Crimes Enforcement Network (FinCEN), in collaboration with other federal agencies, issued a Notice and Request for Information and Comment (Notice and Request) seeking public comment on its proposal to amend the Customer Identification Program (CIP) Rule requirement for banks to collect a taxpayer identification number, among other information, from a U.S. customer prior to opening an account. Usually, for a U.S. customer this requires banks to collect a full Social Security number (SSN). The amendment comes in response to pressure from fintechs, specifically providers of buy-now, pay-later products that rely on bank partners, for an accommodation from the CIP Rule.

We are pleased to share our annual review of regulatory and legal developments in the consumer financial services industry. With active federal and state legislatures, consumer financial services providers faced a challenging 2023. Courts across the country issued rulings that will have immediate and lasting impacts on the industry. Our team of more than 140 professionals has prepared this concise, yet thorough analysis of the most important issues and trends throughout our industry. We not only examined what happened in 2023, but also what to expect — and how to prepare — for the months ahead.

On January 2, New York Governor Kathy Hochul unveiled her 2024 consumer protection agenda, which includes plans to regulate the “buy now, pay later” (BNPL) industry. Specifically, Governor Hochul plans to propose legislation to require BNPL providers to be licensed in the state and to authorize the New York State Department of Financial Services to propose and issue regulations for the industry. According to Governor Hochul, “New Yorkers are increasingly turning to [BNPL] loans as a low-cost alternative to traditional credit products to pay for everyday and big-ticket purchases. This legislation and regulations will establish strong industry protections around disclosure requirements, dispute resolution and credit reporting standards, late fee limits, consumer data privacy, and guidelines to curtail dark patterns and debt accumulation and overextension.”

On November 3, the Financial Stability Oversight Council (FSOC) voted unanimously to finalize the procedures for designating a nonbank financial company for Federal Reserve supervision. FSOC’s Interpretive Guidance aims to establish a “durable” process for using its nonbank financial company designation authority, maintain rigorous procedural protections for companies reviewed for potential designation, and remove “unwarranted hurdles” to designation imposed by the 2019 Interpretive Guidance. FSOC had issued a proposed Interpretive Guidance in April 2023, which received 47 comments. The final version takes into account those comments.

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September 12-14, 2023

Keith Barnett, Jason Cover, James Kim, Kim Phan, Jean Smith-Gonnell, James Stevens, Misha Tseytlin, Rich Zack, Ketan Bhirud, Carlin McCrory, and Caleb Rosenberg will be speaking on a variety of topics during the TPPPA 2023 Solving the Payments Puzzle Conference, which will be held September 12 – 14, 2023 in

As discussed here, in April 2023, Colorado introduced HB 1229 that proposed to limit certain charges on consumer loans and simultaneously opt Colorado out of sections 521-523 of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA). Sections 521-523 of DIDMCA empower state banks, insured state and federal savings associations and state credit unions to charge the interest allowed by the state where they are located, regardless of where the borrower is located and regardless of conflicting state law (i.e., “export” their home state’s interest-rate authority). However, section 525 of DIDMCA gives states the authority to opt out of sections 521-523. Indeed, Colorado initially opted out of DIDMCA when it was enacted, but later repealed its opt-out. This week HB 1229 was signed into law by Governor Jared Polis joining Colorado with Iowa and Puerto Rico as the only jurisdictions currently opting out.

On April 12, the U.S. Small Business Administration (SBA) announced that it is ending the moratorium that capped the number of small-business lending companies permitted to participate in its § 7(a) loan program at 14, and opening up participation in the program to fintech firms and other alternative lenders. The SBA’s loan program offers small businesses loans of up to $5 million, with the agency guaranteeing up to 85% on loans up to $150,000, and 75% for loans more than $150,000. The new rule will take effect on May 12.