Last Week, This Morning

June 22, 2026

Below you will find several key developments in the financial services industry, including related developments in information privacy and data security, from the past week. We add an "Amicus Brief(ly)¹" comment to each item, where we briefly (see what we did there?) note for friends (and again?) of CounselorLibrary the important takeaways from the developments outlined in the email. Our legal reporters - CARLAW, HouseLaw, InstallmentLaw, PrivacyLaw, and BizFinLaw - provide more comprehensive, real-time updates of federal and state laws, regulations, litigation, and other industry items of interest. For a personal guided tour and free trial of any of these legal reporters, please contact Michael Willer at 614-855-0505 or mwiller@counselorlibrary.com.

On June 15, the New Jersey Governor's Office and the New Jersey Office of the Attorney General and Division of Consumer Affairs issued an executive order and enforcement statement, respectively, concerning "junk fees."

For purposes of the EO, the term "junk fees" means "hidden, surprise, or excessively overpriced fees, including those associated with a good or service that provides little or no benefit to the consumer." The EO directs all state departments and agencies to review the industries they regulate to identify and analyze the impact of junk fees on consumers and report recommendations on legislative and regulatory measures to reduce or eliminate them. The evaluations must include an assessment of state contracts with third parties to the extent those contracts permit junk fees. By September 14, all state departments and agencies must provide the following to the Governor's Office: (1) an assessment of prevalent junk fees and their impact on New Jersey consumers, including the impact on low-income consumers and consumers of color; (2) if applicable, proposed rulemaking to address the adverse impacts of junk fees on New Jersey consumers; (3) recommended measures to ensure that "all in" pricing and transparent fee disclosure is standard across state programs and programs regulated by executive branch departments and agencies; and (4) any other recommended measures to reduce or eliminate junk fees.

In the enforcement statement, the AG and DCA describe common junk fees across the marketplace and explain how some practices surrounding junk fees may violate the New Jersey Consumer Fraud Act. The statement notes that the AG's office and the DCA intend to monitor the charging of junk fees and take enforcement action to curb abuses. The enforcement statement identifies several common practices in charging junk fees, including: (1) bait-and-switch pricing that excludes mandatory fees from the advertised price but then tacks them on later in the purchasing process; (2) hiding costs in fine print or using websites and apps deceptively designed to make the costs difficult to spot; (3) misrepresenting the purpose of a fee, or whether it is mandatory, in order to obtain payment consent; and (4) using obscure or vague language to tack on excessively overpriced or useless fees that provide little or no benefit to consumers.

Amicus Brief(ly): From the sound of the enforcement statement, the New Jersey AG means business when it comes to so-called "junk fees." The statement includes several pages of narrative about the kinds of fees the AG's office has seen, across industries, that it considers "junk." The AG talks about pricing practices that readers will see in other AG actions described in this week's edition of Last Week, This Morning® that tend to trouble regulators, like "drip pricing" (i.e., advertising low prices and adding fees later, if the intent of the low advertised prices is to lure consumers in by misleading them). The AG also expresses concerns about the practice of focusing a consumer buyer on a monthly payment amount without disclosing that the seller has baked optional fees into that monthly payment amount. In the end, we have a clear enforcement statement telling providers doing business in New Jersey that the AG is planning to rely on her broad authority under the Consumer Fraud Act to pursue claims against businesses charging New Jersey consumers fees that her office considers "junk" fees. We have been warned.

On June 15, the Massachusetts attorney general issued an advisory that puts motor vehicle dealers on notice regarding vehicle price advertising requirements. The advisory reminds dealers that, under Massachusetts law, "non-optional" fees must be included in the advertised price of the vehicle. Such fees include document preparation fees, which is the focus of the advisory. Failure to include non-optional fees in the advertised price is an unfair and deceptive trade practice.

The advisory warns dealers that separately listing the existence or amount of non-optional fees elsewhere in an advertisement, even if prominently disclosed, is not compliant. In addition, because "advertisement" is broadly defined, if a vehicle's Monroney label price differs from the price inclusive of non-optional fees, a separate label must be placed adjacent to the Monroney label with the vehicle's price inclusive of all non-optional fees.

The advisory is effective immediately and includes a notice for consumers to report non-compliant dealers to the AG.

Amicus Brief(ly): It feels like there is nothing to see in this advisory, but there really is. We have seen a rash of cases over the past several years where state AGs have pursued vehicle dealers over their price advertisements. The state regulators want to make sure that if a consumer sees a vehicle advertised at a price that she or he finds attractive, the consumer does not later learn about a litany of unavoidable fees that she or he will have to pay to buy that vehicle. When an enforcement agency with a history of following through tells us, through an advisory or otherwise, what it's looking for, we know to pay attention. Dealers who want to avoid serious consequences should review this advisory and then their advertising practices to make sure they're aligned.

On June 15, the National Association of Industrial Bankers, the Online Lenders Alliance, and the American Financial Services Association sued the director of the Oregon Department of Consumer and Business Services over the state's recent enactment of a law to opt out of rate exportation under the Depository Institutions Deregulation and Monetary Control Act. The new DIDMCA opt-out under Oregon law purports to limit consumer finance loans of $50,000 or less made by out-of-state banks to Oregon borrowers to a 36% per year cap.

The plaintiffs argue that, under the DIDMCA, a loan is "made" where the bank is located and performs its loan-making functions, so Section 525 of the DIDMCA does not authorize an opt-out state to regulate interest on loans made by banks chartered elsewhere, as Section 525's opt-out power applies only to "loans made in such State." The plaintiffs further challenge the Oregon law, which states that the opt-out is triggered if the consumer makes a payment by debiting an Oregon account or using a negotiable instrument drawn on an Oregon institution, claiming that this language violates the Commerce Clause by regulating a transaction that "takes place wholly outside" its borders, with the payment mechanics being merely fortuitous rather than a meaningful in-state contact.

Amicus Brief(ly): The complaint these groups filed reads like a winner. Of course, it has the benefit of coming after the Tenth Circuit heard the case challenging the Colorado DIDMCA opt-out, where an en banc rehearing of that case is pending. The arguments made in this Oregon case reflect the industry's understanding of the impact of the opt-out, confirmed by the Federal Deposit Insurance Corporation (in an interpretive letter cited in the complaint). Specifically, when a state opts out of Section 521 of the DIDMCA, it prohibits banks chartered in that state from exporting interest; it does not prohibit banks chartered in other states from exporting interest from their home states if their home states did not opt out of Section 521. As noted in the summary and throughout the complaint, the analysis turns on where the loan "is made." The outcomes of the Colorado and Oregon cases will be incredibly impactful to the fintech world, where non-banks and state-chartered banks work together to offer consumers loans of all kinds. We are watching these cases with keen interest and will report updates when we have them.

California Attorney General Rob Bonta recently announced a settlement with a large mortgage loan servicer, resolving allegations that the servicer violated California's unfair competition law, California's Homeowner Bill of Rights, California's Rosenthal Fair Debt Collection Practices Act, the federal FDCPA, and Regulation X in connection with its servicing of mortgage loans during and after the COVID-19 pandemic. The settlement requires the mortgage servicer to pay $1.6 million in civil penalties and $3 million in restitution to affected borrowers.

The AG's complaint alleged that the servicer gave some borrowers who entered into COVID-related forbearance plans inadequate and inaccurate information about these plans and the loss mitigation options that would be available to them at the end of the forbearance period. For example, the servicer allegedly told borrowers that they would be able to submit applications to be reviewed for other loss mitigation options while in forbearance, but, in practice, the servicer did not allow all borrowers to exercise this option and told borrowers that they would be able to extend their forbearance periods until their hardships resolved when, in fact, limits applied.

Although borrowers with COVID-related forbearance plans were protected from paying late fees for mortgage payments missed in forbearance, the AG alleged that the servicer sent borrowers periodic mortgage statements stating that late fees would be charged if payments were not received during the forbearance period. When borrowers were nearing the end of their COVID-related forbearance, the servicer allegedly failed to explain the specific loss mitigation options made available to borrowers by the owners or assignees of their mortgage loans.

In addition, the AG's complaint alleged that the single points of contact ("SPOCs") that the servicer assigned to borrowers were often unavailable or unable to assist borrowers in applying for loss mitigation options. SPOCs also allegedly gave borrowers inadequate and conflicting information about their options for avoiding foreclosure and the documents required to complete their applications for loss mitigation. The servicer also allegedly represented to borrowers that applications submitted less than 30 days from the date of a foreclosure sale were ineligible for review because the sale was too close in time, despite that, under the HBOR, complete applications submitted at least five business days before a scheduled foreclosure sale are considered timely. The servicer also allegedly did not allow review of applications from some borrowers who may have experienced changed financial circumstances after submitting a prior loss mitigation application, despite that, under the HBOR, mortgage servicers are obligated to review subsequent applications when borrowers document such a change.

Amicus Brief(ly): It is an understatement to say that servicing during the COVID pandemic was challenging, especially in light of all the borrower protections that states imposed in the aftermath of the mortgage foreclosure crisis that hit the economy so hard in the late 2000s and early 2010s. This California settlement and the corresponding complaint highlight the need for attention to detail in servicing when so many rules apply. The SPOC rule, the rules requiring servicers to present loss mitigation options to borrowers and to follow through when eligible borrowers elect those options, and the requirements and limitations imposed on servicing communications all require detailed procedures for agents to follow in order to ensure adherence to the rules. Those procedures were very likely in place with the servicer (which admitted no wrongdoing in the settlement), but the allegations and settlement underscore the need for compliance training and re-training and a strong internal audit function to catch compliance exceptions and keep the procedures front and center for agents who are talking to consumers with financial difficulties.

Minnesota Attorney General Keith Ellison recently sued a company that makes online, short-term "Instant Cash" advances between $25 and $250 to consumers through its mobile application, with an additional fee to access the funds "instantly" unless consumers opt into the premium subscription.

The AG alleges that the cash advances - often called earned wage advances - are actually "loans" subject to Minnesota's laws governing small loan and short-term consumer lenders, and thus the company is required to be registered as a consumer small loan lender and a consumer short-term lender under Minnesota law. The AG alleges that annual percentage rates paid by consumers who obtained these cash advances regularly exceeded 300%. Minnesota law caps the APR that consumer short-term lenders may charge at 50%. The AG argues that the cash advances are loans because they "have 'due dates' that are set when they are taken out and the loans are expected to be repaid on those due dates. They are issued only if such repayment is preauthorized (similar to post-dating a check - the method traditionally used by storefront payday lenders). And due dates can be extended through a limited number of 'extension credits' that [the company] claims to grant to its users[,]" suggesting, according to the AG, that it costs the consumer something to extend the repayment date. As a result, according to the AG, "more than 96 percent" of the company's cash advances are repaid.

The company argues that Minnesota's small dollar, short-term credit laws do not apply to its cash advances because the terms and conditions of the advances indicate that consumers may choose not to repay the advances, specifically by stating that the advances are "non-recourse" and that repayment is "voluntary." The AG, however, alleges that the company does not disclose anywhere in the normal flow of its app that repayment is "voluntary" and that the company does not offer an in-app cancellation mechanism or disclose within the app how a consumer may cancel or choose not to repay.

The AG seeks, among other things, to permanently enjoin the company from continuing to provide the purported "loans" without the required registration and adherence to Minnesota law, civil penalties, restitution for affected consumers, and a declaration that all cash advances by the company to Minnesota consumers without the required registration are void.

Amicus Brief(ly): The complaint in this case takes a firm stand against the EWA product offered by the provider on a number of bases, but the issue that surfaces numerous times is the apparent concealment by the provider of the fact that consumers did not have to repay the advances taken on the plans offered. It seems like an odd concept, but the provider's agreement included a provision making repayment optional. In practice, however, the AG alleges that the provider hid the ball and pursued collection against consumers as though the advances were loans with traditional or standard terms. Because the AG's case did not end up in a consent order, it is likely that the provider disagrees wholeheartedly with the allegations or the AG's demand was too high (or both). The allegations in the case sound a little like a Federal Trade Commission complaint - the FTC digs in when it believes a provider has not serviced its product as advertised, which is effectively what the Minnesota AG alleges in this case.

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¹ For the unfamiliar, an “Amicus Brief” is a legal brief submitted by an amicus curiae (friend of the court) in a case where the person or organization (the “friend”) submitting the brief is not a party to the case, but is allowed by the court to file the brief to share information or expertise that bears on the issues in the case.