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January 2024 Regulatory Brief: Section 1071, enforcement actions plus final rules and guidance

2 min read
Jan 12, 2024

The regulatory agencies – especially the Consumer Financial Protection Bureau (CFPB) – finished 2023 strong with a variety of enforcement actions, lawsuits, reports, final rules, and guidance.

Miss some of the news in the holiday rush? Not to worry, Ncontracts’ team of regulatory experts is here to break it down for you in this month’s Regulatory Update podcast. Read on for highlights from the podcast.

For a deeper dive, listen to the podcast or log into Ncomply for the latest information.  


CFPB Regulations & Enforcement

Congress fails to overturn CFPB Section 1071

Congress tried unsuccessfully to overturn the CFPB’s final 1071 rule through a congressional resolution. While it passed 221-202 in the House and 53-44 in the Senate, President Biden vetoed the resolution and Congress did not have the two-thirds majority to override the veto. Implementation dates are now dependent on the results of the Supreme Court case questioning the constitutionality of the CFPB’s funding. A decision is expected in June.

CFPB fines U.S. Bank $21 million for pandemic account freezes.

The CFPB fined U.S. Bank $21 million for freezing the assets of thousands of accounts of unemployed customers during the pandemic, making it impossible to access unemployment benefits. The bank didn’t provide an easy way for customers to regain access to their funds. The CFPB says the bank violated the Consumer Financial Protection Act and the Electronic Fund Transfer Act. The Office of the Controller of the Currency also assessed a $15 million penalty for unfair practices. Listen to the podcast for a deeper dive into what went wrong – and what it means for fraud controls at your institution.

CFPB continues to push back against overdraft fees.

The CFPB’s fight against overdraft fees continues with the agency releasing a report revealing that many accountholders are still surprised by unexpected overdraft and nonsufficient fund (NSF) fees. It’s a reminder that financial institutions should risk assess their overdraft programs to determine if the fee income is worth the risk.

Rules and guidance from regulators

FinCEN issues final rule on beneficial ownership.

FinCEN released a final rule outlining the framework for accessing and protecting beneficial ownership information (BOI) under the Corporate Transparency Act (CTA). It also released guidance explaining how the final rule complements FinCEN’s Customer Due Diligence (CDD) rule.

OCC and FDIC guidance

The OCC issues guidance focused on safety and soundness with “Buy Now, Pay Later” (aka BNPL) lending. Meanwhile, the FDIC issued guidance on the risks of concentrations in commercial real estate lending (CRE) and the need for healthy capital and credit risk management.

NCUA Seeks Increased Vendor Management Oversight

After last month’s ransomware attack impacting around 60 credit unions, NCUA Chairman Todd Harper testified before the Senate, asking Congress to empower the NCUA to examine third-party vendors and how those risks are managed.  


Overwhelmed by regulatory change? Not sure where to begin? Download our guide Navigating Change: A Comprehensive Guide to Effective Change Management in Financial Institutions.

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