Ross T. Handler counsels fintech, nonbank, and financial services institutions on compliance with state and federal finance laws. He advises financial services clients on money transmission and consumer and commercial lending laws related to the offering and operation of financial products and services, including credit, debit and prepaid cards, and other consumer lending constructs.

On January 2, New York Governor Kathy Hochul announced a proposal to establish regulations for the “Buy Now Pay Later” (BNPL) loan industry.

Gov. Hochul announced that she will propose legislation to require BNPL providers to obtain a license to operate in the state and to authorize the New York Department of Financial Services to propose and issue regulations for the industry. Her announcement notes that the legislation and regulations will establish industry protections around disclosure requirements, dispute resolution and credit reporting standards, late fee limits, consumer data privacy, and guidelines to curtail dark patterns, debt accumulation, and overextension. Specific legislative language will be unveiled as part of Gov. Hochul’s executive budget presentation in late January, according to her office.  We will provide an update here as those details become available.Continue Reading N.Y. Governor Proposes Measures To Ensure Fairness in “Buy Now Pay Later” Services

On January 9, the California Department of Financial Protection and Innovation (DFPI) issued an order against a consumer financing platform that enables merchants to offer installment contracts to their customers. The platform was ordered to pay a $50,000 penalty for allegedly not disclosing information about possible convenience fees assessed to its customers’ accounts. As part of the order, the platform is required to disclose this information to consumers in the future.

According to DFPI’s order, the platform contracts with a third-party servicer for the installment contracts that it originates, and this servicer informs consumers that their account has been assigned to them before their first payment is due. As part of that communication, the servicer provides consumers with information on how to make payments without incurring any fees, as well as information on other ways to make payments that will incur fees (e.g., making payments online or over the phone).Continue Reading California DFPI Orders Consumer Financing Platform To Cease Hidden Junk Fees

CFPB Seeks Public Input on Consumer Credit Card Market

On January 24, the Consumer Financial Protection Bureau (CFPB) issued a request for information seeking public feedback on how the consumer credit market is functioning.

The CFPB’s request for information is part of a comprehensive review of the entire industry, as required by the Credit Card

Big Tech in Banking: Implications for Competition in Consumer Markets and Risks to Financial Stability

The director of the Consumer Financial Protection Bureau (CFPB) presented the agency’s Semiannual Report to the U.S. Congress on December 14. Noting that consumer finance markets are “truly in transition,” Director Rohit Chopra offered observations regarding what the CFPB is

OCC Revises Civil Money Penalty Manual

The U.S. Office of the Comptroller of the Currency (OCC) announced revisions to its civil money penalty (CMP) manual on November 29, 2022. This may have important implications for smaller banks that have entered into partnerships with fintech companies. The updated manual will go into effect on January 1

Weekly Fintech Focus

  • On November 16, 2022, the U.S. Department of the Treasury (USDT) released a new report titled “Assessing Impacts of New Entrant Non-bank Firms on Competition in Consumer Finance Markets.” The report calls for enhanced oversight of the consumer financial activities of non-bank firms (particularly bank-fintech relationships) and offers several recommendations that aim

Consumer Protection Agencies Target Junk Fees and Dark Patterns for Enforcement Action and Rulemaking

The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) are cracking down on the assessment of junk fees and the use of dark patterns, which harm consumers. Recently, the CFPB sued an online event registration company for its

Weekly Fintech Focus

  • FTC explains that merchants using BNPL services are also subject to consumer protection obligations.
  • CFPB ends its no-action letter and compliance sandbox policies.
  • CFPB sues an online lender for Military Lending Act violations related to the lender’s membership fees.

Continue Reading Fintech Legal Report—Week of September 30, 2022