Today's Trends in Credit Regulation

Welcome to Hudson Cook Insights - a collection of articles written each month by the attorneys of Hudson Cook, LLP, in an effort to keep their clients and other compliance professionals informed about current trends and developments in consumer credit finance that will affect the way they do business.

December 2020/January 2021

CFPB Bites of the Month - December Top 20

By Chris Capurso, Justin Hosie and Eric Johnson

Each month, we host a 30-minute webinar outlining the month's key announcements and takeaways from the CFPB to be considered by financial services providers. It was a particularly busy month at the CFPB, so as an extra special holiday bite, we share our top 20 bites covered during the December 16 webinar. article continued

CFPB Releases Advisory Opinion Finding that Earned Wage Access Programs, When Structured Properly, Are Not Credit Under TILA and Regulation Z

By Justin Hosie and Chris Capurso

On November 30, 2020, the Consumer Financial Protection Bureau released an advisory opinion concerning earned wage access ("EWA") products. The opinion was released as a sort of "launch day bonus" for the release of the Bureau's Final Advisory Opinions Policy and accompanying website page. The Bureau addressed whether EWA providers are offering or extending credit within the scope of Regulation Z. The Bureau determined that "Covered EWA Programs" do not involve the offering or extension of credit under Reg. Z. article continued

CFPB Announces Broad Military Lending Act Compliance Sweep

By Erica A.N. Kramer

On December 4, 2020, the Consumer Financial Protection Bureau announced the filing of a lawsuit against an online lender for allegedly violating the Military Lending Act ("MLA"). The CFPB's complaint alleges that the lender entered into loan agreements with covered borrowers that exceeded the MLA's 36% military annual percentage rate ("MAPR") cap, contained provisions requiring borrowers to submit to arbitration in case of a dispute, and failed to provide all of the MLA's required disclosures. The complaint requests various forms of relief, including that the lender pay compensation for unjust enrichment, pay damages and other monetary relief to consumers, rescind consumer credit agreements that were void ab initio (from the beginning), and permanently enjoin the lender from collecting debts arising from the void ab initio agreements, or from selling or assigning such debts. article continued

Gov. Cuomo Signs New York Small Business Finance Disclosure Law

By Katherine C. Fisher and Caleb Rosenberg

On December 23, 2020, New. York Governor Cuomo signed into law A10118A/S5470B requiring disclosures in various commercial financing transactions, including loans, merchant cash advances ("MCA"), and factoring transactions (the "Disclosure Law"). The Disclosure Law will be effective 180 days from Dec. 23, 2020. article continued

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