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Regulatory Updates February 2023: RESPA Spotlight, Credit Card Late Fees, Zelle Fraud, & More.

2 min read
Feb 1, 2023


Significant Regulatory Updates in February 2023:

RESPA in the Spotlight

The Supreme Court will hear a case on the constitutionality of the CFPB's structure and funding. Meanwhile, the CFPB issued an advisory opinion stating that digital mortgage shopping platforms may violate RESPA if they present options in a biased manner and receive fees from lenders. Platform operators and mortgage lenders using these platforms should be cautious about compliance with RESPA and other related laws. The FDIC has also settled a similar case recently. Expect increased scrutiny on RESPA compliance.

CFPB Proposes Changes to Credit Card Late Fees

The CFPB has issued a proposed rule to address credit card late fees, aiming to reduce fees and enhance consumer protection. The rule would decrease the safe harbor amounts from $30 and $41 to just $8 for first-time and subsequent violations. The proposal also eliminates inflationary adjustments and limits late fees to 25% of the minimum payment. The industry is requested to provide feedback within the 30-day comment period.

Credit Unions & Zelle

Recent issues have arisen regarding fraud and scams involving Zelle transfers. Victims seek reimbursement from financial institutions for unauthorized transactions, but institutions argue that the transactions were not unauthorized. In a New Jersey court case, Navy Federal Credit Union was not required to reimburse a member for a fraudulent Zelle transfer. The ruling provides guidance on what constitutes unauthorized transactions and highlights the need for internal controls to manage fraud risks. The NCUA plans to examine credit unions' risk management practices in this area.

California Privacy Regulation Moving Forward

The California Consumer Privacy Act (CCPA) grants privacy rights to California residents, including the right to know and delete personal information and opt out of data sharing. Recent proposals aim to make compliance easier by clarifying sensitive information usage, ensuring the accuracy of corrected data, and addressing opt-out preferences. The Attorney General is investigating non-compliant businesses, particularly those not offering opt-out mechanisms or properly processing requests. Businesses sharing personal information through mobile apps must provide notices, disclose data selling, and offer opt-out options. Stay tuned for updates.

NYDFS Implements State CRA Revisions

The New York Department of Financial Services has implemented a final rule for CRA, requiring banks to report data on serving minority and women-owned businesses. The Federal Reserve, FDIC, and OCC issued a statement on liquidity risks related to cryptocurrency, advising due diligence and understanding customer behaviors. No new requirements were imposed.

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