Federal agencies regulating banks, direct lenders, bank program facilitators and alternative credit products remained active in 2023 with enforcement actions highlighting a variety of initiatives such as small dollar lending, banking as a service (BaaS), fair lending and so-called "junk fees." Given the tendency for “regulation by consent order” and with at least another year before any potential change in administration, savvy market participants will incorporate the lessons learned from regulatory activity in 2023 into their compliance systems. This panel will accordingly provide an overview of federal regulatory enforcement in 2023, thoughts on the potential industry impact and prognostications on regulatory action in 2024.
Despite the well-established benefits to consumers flowing from lending partnerships
between fintechs and banks, the “bank model” continues to be attacked at the state and federal levels. In this session, Manatt lawyers will discuss the most recent efforts to undermine bank-model lending, including through legislation, regulation, regulatory enforcement actions, and litigation at the state and federal level. They also will discuss best practices for structuring bank partnership programs to maximize their defensibility against “true lender” and other attacks.
The Consumer Financial Protection Bureau (CFPB) has been at the forefront of discussions
surrounding the evolving role of data brokers in today’s digital economy. Specifically, on September 15, 2023, the CFPB released its outline of a proposed rule that would regulate both data collection and data sales, and would effectively expand the scope of the Fair Credit Reporting Act. This move comes after considerable discussions by the Bureau and the Biden Administration regarding the data broker space. Regulation in this industry sits at the nexus of fair credit reporting, privacy issues, and the regular business practices of lenders, data brokers, and third-party service providers. This panel will discuss the development of regulation in the data broker space, implications of the CFPB’s potential rulemaking, and ways that stakeholders can (1) work with trade groups and other interested partners to influence the rulemaking through the public comment process and (2) begin preparing for a new regulatory regime.
This panel discussion will cover updates on industry trends in government investigations
and consumer litigation. The speakers will provide practical insights on responding to such actions and
best practices to avoid them. The presentation will help owners, operators, and stakeholders identify
areas of risk and properly allocate resources accordingly.
This session will cover the CFPB’s open banking proposal issued in October 2023 and its
potential implications for banks, fintechs, data aggregators and other stakeholders. In particular, it will focus on data security and privacy considerations, and consumer and regulatory pressures toward increasing accessibility to loans and other financial products and services that may be affected by easier and more uniform data flows from banks and other financial institutions.
Federal regulators continue to focus on the intersection between their efforts to combat
discrimination in credit and “digital redlining practices” that may exclude or unfairly target protected borrowers and the use of innovative technologies and alternative data. This has led to a number of groundbreaking enforcement actions, regulatory initiatives, and guidance bulletins, but also challenges from market participants that have brought into question the scope of the Equal Credit Opportunity Act itself and the CFPB’s ability to make new policy using its UDAAP authority. This panel will provide an update on these developments and fair lending and anti-discrimination enforcement trends that affect online lenders, lead generators, and marketing partners. It will provide concrete strategies on how players in the space can attempt to mitigate fair lending and UDAAP risk as they continue to use innovative technologies to enhance their product offerings and customer experience. In doing so, this panel will discuss emerging areas of concern such as algorithmic bias, the use of UDAAP as a tool for regulators to combat discrimination, trends in advertising and marketing and fair lending, and recent state and federal regulatory commentary regarding fair lending.
Speaker: Andrew Duke – Chief Executive Officer – Online Lenders Alliance