Summer is bringing more than heat waves – it’s bringing a wave of regulatory changes and news.
From a major Supreme Court decision to enforcement actions and rule proposals, there’s plenty to wade through this month, and the Ncontracts regulatory compliance team is here to help you through it.
Here are a few highlights from this month’s Regulatory Brief for July 2024. For a more in-depth discussion of regulatory compliance news and what it means for your institution, listen to the podcast.
Supreme Court Overturns Chevron Deference
In major, late breaking news last month, the Supreme Court overturned Chevron deference. Chevron deference was the legal standard courts used to determine whether regulations implemented by government agencies comply with congressional legislation and intent. Under Chevron, courts deferred to agencies’ interpretations so long as those interpretations were reasonable. With this decision, the Court ruled that weight may be given to agencies’ interpretations, but ultimately judges should interpret ambiguous laws. While this decision makes it easier for financial institutions to challenge and potentially overturn regulatory actions, it also introduces a degree of uncertainty and complexity into the regulatory landscape.
New Multi-Agency Rule for Real Estate Automated Valuation Models
The Office of the Comptroller of the Currency (OCC), Federal Reserve Board (Fed), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Consumer Financial Protection Bureau (CFPB), and Federal Housing Finance Agency (FHFA) approved a final rule implementing quality control standards for automated valuation models. Automated valuation models are used by mortgage originators and secondary market issuers when valuing residential real estate collateral that secures mortgage loans. The standards are a mandate from the Dodd-Frank Act and emphasize the recent focus on ensuring equity in property valuation.
CFPB Pushing Back Against Illegal Contract Terms
Including illegal or unenforceable terms and conditions in contracts for consumer financial products and solutions violates the Consumer Financial Protection Act (CFPA)’s prohibition against deceptive acts and practices, according to a CFPB circular. The takeaway: write contracts in plain English that consumers can easily understand and avoid requiring consumers to waive their rights to bring lawsuits for violations of law.
CFPB Eyes New Rules for Medical Debts and Loan Products
The CFPB is seeking comments on a proposed change to Regulation V of the Fair Credit Reporting Act (FCRA) that would prevent creditors from letting medical debts influence credit eligibility. Lenders would also be prohibited from repossessing medical devices.
In related activity, the CFPB said in a recent blog that it plans to take a closer look at how financial institutions market products to healthcare providers. The CFPB is concerned that aggressively marketed and high-cost products harm consumers.
FinCEN Proposes Strengthening AML/CFT Rules
FinCEN issued a proposed rule to strengthen and modernize the anti-money laundering and Countering the Financing of Terrorism program requirements. The proposal would help financial institutions use the risk assessment process to prioritize risks and allocate resources based on their AML/CFT risk.
Judge Rejects $30 Billion Visa/Mastercard Swipe Fee Settlement
A federal judge rejected a $30 billion antitrust settlement where Visa and Mastercard agreed to limit the fees they charge merchants that accept their credit and debit cards. The judge said the penalty isn’t significant enough. This may impact the profitability of swipe fees for banks.
For more regulatory news, including another Supreme Court case, three noteworthy enforcement actions, and Florida’s new flood disclosure requirements, make sure you tune in to this month’s Regulatory Brief.
Wonder what the rest of the year holds in store?
Find out in our Mid-Year Regulatory Landscape 2024 webinar.
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Regulatory Brief for June 2024: 1071, CFPB News and Enforcement Actions
January 2024 Regulatory Brief: Section 1071, enforcement actions plus final rules and guidance
