Here are few interesting news items we brought together in a compliance news round-up for this week…
CFPB’s Section 1071 Filing Platform: Beta Testing Feedback
As many of you are aware, the beta Small Business Lending Filing Platform opened in August for testing & commentary. Earlier this week, the CFPB released a few tips related to LEIs, data submission, and filing tools early user feedback. Below you’ll find their tips, exactly as shared by the CFPB.
-
- LEI: If institutions or vendors with an LEI want to test small business lending data, they can use it to register for the beta platform. An LEI is required to upload sample small business lending data for testing purposes. As a reminder, vendors must use their own LEI to test files on the beta platform. In the future, the financial institution must maintain an “Issued” LEI status to sign and submit data, but this is not required at this point on the beta platform. Check your LEI status and learn about registering your institution for a LEI here: https://www.gleif.org/en/about-lei/get-an-lei-find-lei-issuing-organizations.
- Beta Test Files and Data Submission: Filers are encouraged to use the SBL Beta Platform to test sample small business lending applications. Filers can upload an unlimited number of files, but data uploaded on the beta platform is for testing purposes only. Data there will not count for small business lending data reporting compliance. Once a filer reaches the “Sign and submit” section of the filing platform, that is the end of the beta filing process. The submission functionality is disabled for the beta platform. Upon reaching this page, please conclude the process or upload a new file to continue testing. Test files to be used can be found in our test file repository. Participants may test with other sample files; however, it is imperative they do not use actual customer data.
- SBL Filing Tools: There have been requests for tools that will assist with the creation of a file that can be used on the beta platform. Our team is currently discussing the implementation of such tools and will provide further details next year. Contact our support staff at SBLHelp@cfpb.gov for any specific requests or suggestions for tools.
The platform will remain open for you to test your data, in accordance with Section 1071 compliance deadlines.
California Governor Newsom Signs a Range of Consumer Protection Bills
California Governor Gavin Newsom recently signed several consumer protection bills aimed at easing financial burdens on residents and promoting transparency across industries.
Key legislation includes:
-
- AB 2017: Prohibits state-chartered banks and credit unions from charging nonsufficient funds (NSF) fees when a transaction is declined instantaneously due to insufficient funds.
- SB 1075: Limits overdraft and NSF fees for credit unions to a maximum of $14 or the fee amount set by the Consumer Financial Protection Bureau, whichever is lower, and mandates consumer notification when such fees are charged.
- SB 1061: Prevents medical debt from being included on credit reports and from negatively impacting credit decisions.
- AB 2863: Requires companies offering automatic renewals to provide consumers with an easy cancellation method, such as a click-to-cancel option for online subscriptions.
These bills strengthen consumer protections by addressing issues related to fees, credit reporting, and subscription services.
CFPB Finalizes Rule to Supervise Digital Payment Apps
On November 21, 2024, the CFPB announced the finalization of a new rule to regulate large digital payment apps, such as those processing over 50 million transactions annually. The rule aims to ensure that these popular apps follow federal consumer protection laws, similar to banks and credit unions.
With digital payments becoming an essential part of daily commerce, particularly among middle- and lower-income consumers, the CFPB is focusing on areas like privacy, fraud prevention, and unauthorized account closures. In the press release announcing this rule, the CFPB stated that by supervising these apps, they are seeking to protect consumer data, ensure fair dispute resolution, and prevent harmful practices like “debanking,” where users lose access to their funds without warning.
The rule applies to companies handling trillions of dollars in payments and includes provisions to monitor transaction errors, fraud risks, and disruptions to services. It also mandates that these companies comply with transparency in data practices and consumer rights for disputing fraudulent transactions.
The CFPB’s move to supervise these Big Tech firms highlights the growing importance of ensuring consumer protections in the rapidly evolving digital payment landscape. This rule will go into effect 30 days after publication in the Federal Register.
As always, if you have any thorny compliance issues, we invite you to enter them into our forum, where experts & peers from across the country can weigh in to help. You can also reach out to our support inbox, and we’d be glad to help in any way we can.