Please join us for a complimentary half-day conference presented by the Financial Institutions Group of Vedder Price.
Continue Reading 31st Annual Banking Update
Save the Date: 30th Annual Banking Law Update
Please join us for a complimentary half-day conference presented by the Financial Institutions Group of Vedder Price.
When & Where
Wednesday, May 9, 2018
7:45 a.m.–Noon (CT)
Chicago Club
81 East Van Buren Street
Chicago, IL 60605
Keynote Speaker:
Alberto J. Paracchini
President and Chief Executive Officer
Byline Bank
Topics
Mergers & Acquisitions and Capital
First Annual Vedder Price FinTech Update
Looking forward to our first annual FinTech Update tomorrow in Chicago. Click here to register!
The CFPB’s Payday Lending Rule: An Opportunity in Disguise?
On October 5, 2017, the Consumer Financial Protection Bureau (“CFPB”) released its nearly 1,700-page final rule for short-term loans (“Payday Lending Rule”). Notably, almost simultaneously with the CFPB’s announced Payday Lending Rule, the Office of the Comptroller of the Currency (“OCC”) rescinded its longstanding Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products (“DAP Guidance”), theoretically opening the door for banks to offer short-term credit products to customers with less regulatory burden.
When will the Payday Lending Rule become effective?
While certain provisions of the Payday Lending Rule relating to the registration of information systems will become effective 60 days after the Payday Lending Rule is published in the Federal Register, the rest of the Payday Lending Rule will become effective 21 months after publication in the Federal Register. Consequently, the Payday Lending Rule will not become effective until sometime during the summer of 2019. Given that the term of the current CFPB Director expires in mid-2018, and will presumably be replaced by a director less hostile to the payday loan industry, some industry commentators speculate that the Payday Lending Rule, at least in its present form, may never become effective.
Continue Reading The CFPB’s Payday Lending Rule: An Opportunity in Disguise?
CFPB’s First No-Action Letter: FinTech Lenders and Banks Take Note
On September 14, 2017, the Consumer Financial Protection Bureau (the “CFPB”) issued its first no-action letter (the “No-Action Letter”) concerning the operations of Upstart Network, Inc. (“Upstart”), a FinTech lender that utilizes alternative data in assessing the creditworthiness of prospective customers. While Upstart’s No-Action Letter has narrow applicability, it may serve as a tool for other FinTech lenders in implementing innovative products and services and establishing relationships with banks.
Background
The financial services industry is changing. With innovative technology and business models, FinTech companies have brought an interesting and complex issue center stage. Namely, how will the CFPB seek to regulate these FinTech companies and their innovative operations within the context of rigid consumer financial protection laws. Although the answer is not yet clear, it appears that the CFPB is trying to better understand how FinTech companies operate.
In October 2016, the CFPB issued its final No-Action Letter Policy (the “NAL Policy”). The NAL Policy permits institutions to submit a request to the CFPB to issue a statement that the CFPB has no present intention to recommend initiation of an enforcement or supervisory action against the applicant with respect to a particular product or service’s compliance with specifically identified regulatory requirements. For example, an applicant may seek to obtain assurance from the CFPB that the applicant’s form disclosure otherwise complies with the Truth in Lending Act and Regulation Z.
Continue Reading CFPB’s First No-Action Letter: FinTech Lenders and Banks Take Note