Policy and Regulation

The Consumer Financial Protection Bureau says the proposal would increase access to credit, but consumer groups argue that it will encourage lenders to make high-cost loans while protecting them from legal liability.

Under the agreement, fintechs and their bank partners will have a safe legal harbor to offer loans, as long as their interest rates do not exceed 36% and they meet various other standards.

The bank has recouped part of the payment, which it blamed on a clerical error, but some of the lenders say they were owed the money in connection with an ongoing dispute.

A proposal to expand consumer protections in the state was added to a budget bill after being dropped in June. Financial institutions say the measure conflicts with federal law and are working behind the scenes to stop it.

In a letter to the Consumer Financial Protection Bureau, the Mortgage Bankers Association recommended adding six more months to the latest GSE patch proposal.

A second-term Trump administration would likely continue its deregulatory efforts, focus on Fannie Mae and Freddie Mac's exit from conservatorship, and seek to facilitate fintech participation in the banking system.

With year-to-date issuance at $51.7 billion, investor demand appears to remain strong despite economic headwinds of the pandemic.

The Conference of State Bank Supervisors, banking law scholars and consumer advocacy organizations filed amicus briefs siding with the New York State Department of Financial Services in its court battle with the federal regulator.

The mortgage giants will have to meet benchmarks for covering cash flow needs during stressed periods. The FHFA views the requirements as a prerequisite to the companies exiting conservatorship.

The complaint filed by New York, California and Illinois argues that the regulation, issued in response to the 2015 Madden decision, undermines state laws intended to protect consumers.