Staying on top of what's happening in the industry is an important part of proper vendor risk management. So, take a look at some top articles from the month of February below that we suggest giving a good read.
Week of February 25
This week the new leadership of the Financial Services Committee wants to grill the CFPB and Wells Fargo; the new head of the CFPB has wasted no time making some changes; and the various state agencies are mounting a major pushback on fintech oversight.
- SCOTUS Ruling That Eighth Amendment's Excessive Fines Prohibition Applies to States Could Provide New Weapon to Consumer Financial Services Providers: States got a new enforcement action alternative. As the CFPB and other agencies have wrestled amongst themselves and taken a bit of a hiatus, the states want to assert their authorities.
- CFPB: More Enforcement, RFI and Servicemember Report: It's a busy start to the Kraninger era at CFPB. The new director has re-invigorated enforcement actions and already set forth new ideas.
- Fintechs Drive Personal Loans to Record Levels: Is this the “feared” rise of the fintechs?
- CSBS Agrees to Implement Recommendations from Fintech Advisory Panel: State Bank Supervisors introduce measures to change MSB license and other FinTech oversight. Similar to the wrangling over the OCC FinTech charter, the states wish to assert their authority over licensing to make it more aligned.
- Experts Disagree on Who Leads the Way on Legal Tech - Law Firms or In-House Counsel: In-house counsel vs large law firms. Who does technology better?
- Are Cybersecurity Solutions and Consulting a New Revenue Stream for Law Firms?: Simple answer = yes, they always have been actually, even if their practices aren’t always up to snuff
- Why Kraninger's CFPB Is Mandating Fewer Consumer Refunds: CFPB is offering fewer consumer refunds in Kraninger’s term.
- Prepaid Accounts Rule: Interagency Consumer Compliance Examination Procedures: FDIC updates prepaid examination procedures in advance of Apr 1 deadline. A complicated and controversial rule many years in the making.
- House Banking Panel to Examine Wells Fargo, CFPB in March: House is to examine CFPB and Wells in March. New leadership of financial services committee clearly wants to probe.
Week of February 18
These few articles talk about fintech companies being an opportunity to banks and government being the threat, Facebook's fine and CFPB's complaints snapshot.
- The biggest Threat to Banks Isn't Fintech or Big Tech - - It's the Government: Op-ed piece about tech companies providing a new battleground for banks, thus being an opportunity rather than threat. The author also shares bankers should be worried about the government because there are politicians who don't know banking system basics.
- Could Signal Stricter US Enforcement of Tech's Privacy Policies: Will Facebook fine lead to tighter security?
- CFPB Issues First Complaints Snapshot Under Kraninger: The snapshot provides a summary of the number of complaints per state on which products. This information allows financial services to identify risks.
Week of February 11
Top note-worthy articles from the past week include: Wells Fargo outage, NAFCU's letter to CFPB, Mortgage fintech EllieMae going private and FTC enforcement actions.
- Flaws in Testing May Have Led to Wells Outage: Thought leaders discuss the difficulty of testing for all scenarios, what lead to the outage and what Wells Fargo should of done differently. The incident raises oversight concerns.
- NAFCU Letter: Policy on No-Action Letters and the BCFP Product Sandbox: NAFCU wrote this to CFPB in support of proposed rulemaking and innovation. NAFCU's Andrew Morris said the CFPB's proposed policy guidance to streamline and revise certain aspects of its no-action letter (NAL) policy and Product Sandbox "might serve as vehicles for improving traditional products and services, whose full potential may be held back by outdated or ineffective regulations."
- NAFCU to CFPB: NALs, Sandbox Will Help Improve Services: Don't feel like reading the whole NAFCU letter above? This article summarizes points made in it.
- Mortgage Fintech Ellie Mae to Go Private in $3.7B Deal with Thoma Bravo: Sale is an all-cash deal for $99 per share, a 47% premium to the 30-day average closing price as of Feb 1. The transaction is expected to close in the second or third quarter.
- Ocwen Adds New Charges to FIS Lawsuit, Expands Audit Abuse Claims: New claims have been made to Ocwen's lawsuit against Fidelity Information Services alleging in part that FIS misrepresented its qualifications to conduct an audit. Ocwen previously accused FIS of overcharging.
- Developments at the Attorney General's Bureau of Consumer Protection: Sounds like Pennsylvania wants to join New York as one of the more aggressive state agencies.
- FTC Enforcement Trends in Consumer Protection: FTC continues to be one of Washington's most aggressive regulators - this article says why.
- Square's Banking Bid Avoids Backlash That Doomed Walmart's: From a public perception perspective, Square > Walmart in the fintech opportunities.
- The Bank Treasury Newsletter Chart Deck February 2019: Bank M&A updates included.
- State AGs Assail CFPB Plan to Build Fintech Sandbox: Play nice in the sandbox – the states v the CFPB.
- When Your Vendor's Vendor Has Sloppy Security: Fourth party involved in security breach that left 24 million mortgage documents unprotected on a server.
- FTC Announces New Sessions of Its Hearings on Competition and Consumer Protection in the 21st Century: FTC rescheduled two sessions due to the recent laps in government funding.
Week of February 4
The first full week of February contained big news, including UDAAP, CARD Act and Equifax as the main headlines. It's been an interesting week!
- Lousy Grammer Invalidates Disclosure Forms, 9th Circ. Says: Showing how grammar matters - can make important forms invalid.
- Equifax Ruling Shows How Cyber Boasts Can Bring Legal Pain: A judge made a ruling for Equifax investors.
- Lloyd's Plans Overhaul of Rules for Third Party Underwriters, Claims Handlers: Lloyd's shows why third party risk matters in the insurance industry.
- Enforcement Information for January 31, 2019: Proof that OFAC doesn’t just apply to financial institutions – look at the cosmetics industry $1 million enforcement action.
- CFPB Issues Request for Information for Next CARD Act Review: Information requested include topics such as terms of credit card agreements and practices, effectiveness of disclosures of terms/fees/etc., adequacy of protections against UDAAP related to credit card plans and more.
- 'A Lot of People Are Going to Get Hurt': Petrou on Fintech Risk: The risk of fintech - one risk being they could create financial products better than what traditional banks provide.
- 5 Best Practices Your Compliance Program Should Implement to Avoid UDAAP Violations: Review your products, services, policies and procedures; learn from mistakes of others; speak with consultants and seek counsel before altering your compliance program; know that consumer complaints are serious and act fast if an act is implicated to show UDAAP violations.
- Common Errors People Find on Their Credit Report - and How to Get Them Fixed: CFPB provides a list of items to check.
- BB&T to Buy SunTrust in All-Stock deal Worth $66 Bilion That Will Create the Sixth-Largest US Bank: Fourth quarter of 2019 is when it's expected to close.
- The CCPA and GDPR: How These Emerging Privacy Laws Will Impact the Credit Union Industry: This article covers Big Data, technology regulation hasn't caught up, what could happen to you if you're not prepared and current legislation.