On May 30, the Supreme Court issued its opinion in Cantero v. Bank of America, N.A., in which the Court was set to decide whether national banks must comply with state interest-on-escrow laws (and by extension, certain other state laws). Rather than providing a clear preemption standard, the Court sent the issue back to the Second Circuit with instructions to conduct a “nuanced comparative analysis” of prior opinions to determine how those laws stack up in terms of interference with banks’ powers. The Cantero case relates specifically to whether Bank of America, a national bank, must comply wi ..read more

On May 22, the Consumer Financial Protection Bureau (“CFPB”) issued an interpretive rule purportedly clarifying the breadth of the term “credit card” for Truth in Lending Act (“TILA”)/Regulation Z purposes in the buy-now/pay-later (“BNPL”) context (the “Interpretive Rule”). The clarification asserts that “digital user accounts” that permit consumers to access credit in the course of a retail purchase are “credit cards,” subjecting the “card issuer” to certain additional disclosure and substantive obligations under Federal law. The Interpretive Rule would become effective 60 days after publicat ..read more

On May 10, the United States District Court for the Northern District of Texas granted the credit card industry at least a temporary reprieve from a CFPB rulemaking that would have restricted late fees on consumer credit cards significantly (as described in more detail in our prior Legal Update). The rule, otherwise slated to become effective May 14, has been stayed after the court granted the industry groups plaintiffs motion for a preliminary injunction. In evaluating key factors relevant to the injunction, however, the court based its determination of plaintiffs’ likelihood of success on th ..read more

The Department of Labor issued a final rule raising the thresholds applicable to an employer’s obligation to pay overtime. The rule sets new levels applicable to the so-called “executive, administrative, and professional” (“EAP”) exemption from overtime requirements and for qualifying as a “highly compensated employee.” The initial updates will become effective on July 1, 2024. The rule also establishes a new updating mechanism for setting those thresholds going forward. As we have discussed previously in this CFS Review blog, the Department of Labor shook up the mortgage industry in 2010, ann ..read more

On March 29, 2024, the United States District Court for the Northern District of Texas issued a preliminary injunction prohibiting enforcement of the new Community Reinvestment Act (“CRA”) regulations against the plaintiffs in the case. The CRA, passed in 1977, generally requires insured depository institutions to participate in investment, lending, and service activities that help meet the credit needs of their designated assessment areas—particularly low- and moderate-income communities and small businesses and farms. In October 2023, the Office of the Comptroller of the Currency (“OCC”), th ..read more

On March 5, the Consumer Financial Protection Bureau (the “Bureau”) issued a Final Rule that would significantly restrict late fees that consumer credit card issuers may charge to a mere $8. Within two days, the Final Rule faced a challenge in the Northern District of Texas by a coalition of trade groups including the United States Chamber of Commerce, the American Bankers Association, and the Consumer Bankers Association. The challenge seeks to invalidate the Final Rule on several constitutional, procedural, and substantive bases, as well as a temporary stay of the rule’s effectiven ..read more

On February 23, 2024, the Consumer Financial Protection Bureau published an order establishing supervisory authority over a small-loan consumer finance company, using a Dodd-Frank Act provision that allows the Bureau to supervise certain nonbanks that it has reasonable cause to determine pose risks to consumers. In Mayer Brown’s Legal Update, we summarize relevant aspects of the Bureau’s supervisory authority and highlight key takeaways from the order ..read more

On March 5, the CFPB issued a final rule that would significantly reduce late fees that may be charged on consumer credit card accounts from $30 or more to $8 in most cases. A proposed rule on this subject matter was issued February 1, 2023, and the credit card industry has paid close attention to the rulemaking process since. The final rule amends provisions of Regulation Z, implementing the Truth in Lending Act, related to permissible penalty fees—including late fees, NSF fees, returned payment fees, etc.— that a card issuer may impose on consumers who violate the terms of a credit card acco ..read more

FHA branch offices could become a thing of the past. The Department of Housing and Urban Development published a final rule on February 2, 2024, eliminating the requirement for lenders to register each branch office where lenders and mortgagees conduct FHA business with HUD. FHA addressed questions from stakeholders in Frequently Asked Questions. By eliminating the branch registration requirement, HUD hopes that by reducing burdens and eliminating barriers, more lenders will originate FHA-insured loans and expand the availability of FHA programs to underserved communities. In Mayer Brown’s Leg ..read more

On February 7, 2024, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a Notice of Proposed Rulemaking on certain US residential real estate transactions (“2024 NPRM”). The 2024 NPRM would require certain professionals involved in real estate closings and settlements to report information to FinCEN about non-financed transfers of residential real estate to legal entities or trusts. The 2024 NPRM describes the circumstances in which a report would be filed; who would file a report; what information would need to be provided—including information about th ..read more