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Flexible Approach to Credit Reporting

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In a policy statement released on April 1, 2020, the Consumer Financial Protection Bureau (“CFPB”) stated that it will take a “flexible supervisory and enforcement approach” during the COVID-19 pandemic.

The Policy Statement emphasizes the importance for furnishers to continue to report accurate information to the consumer reporting agencies during this crisis.  The CFPB’s position is that the accurate credit reports will be important for the economy moving forward.

The CFPB’s Policy Statement highlights two areas where it will have flexibility: (1) Furnishing Consumer Information Impacted by COVID-19 and (2) Disputes.

Making clear that it expects furnishers to comply with the amendments to FCRA by the CARES Act, the CFPB reiterated its support for furnishers’ efforts to work with consumers impacted by the COVID-19 pandemic.  The CFPB will not cite in examination or take enforcement actions against furnishers who are accurately reporting the payment relief measures being afforded to borrowers during this crisis.

In addition, the CFPB recognizes that CRAs and furnishers may be facing “significant operational disruptions” which will make it difficult to timely respond to a consumer’s dispute in the 30-day time frame provided by FCRA.  To that end, the CFPB’s Policy Statement states that it will take into account the entity’s individual circumstances and does not intend to take enforcement action so long as the entity is making a “good faith effort” to respond to disputes, even if the response is untimely.

Finally, the CFPB’s Policy Statements reminds the CRAs and furnishers that they do not need to investigate disputes submitted by credit repair organizations or disputes that they “reasonably determine to be frivolous or irrelevant.”

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.

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California’s vague new financial regulation law

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California Capitol. Photo by Anne Wernikoff for CalMatters

In summary

California has a new financial regulation law but its reach is vague and awaits more definition.

Assembly Bill 1864 didn’t get much media or public attention as it zipped through both houses of the Legislature on the last day of the 2020 session.

Superficially, it appeared merely to reconfigure the state’s financial regulatory agencies into a new entity called the Department of Financial Protection and Innovation.

However, those in California’s vast financial industry were paying lots of attention because the bill creates an entirely new regulatory regime with broad powers, including fines of up to $1 million a day, to police financial players that hitherto have had little oversight.

The official rationale for the legislation is that President Donald Trump’s administration neutered the federal Dodd-Frank Wall Street Consumer Financial Protection Act of 2010, so the state must step in with an equivalent to guard against predatory financial practices that harm consumers.

The new California Consumer Financial Protection Law gives the reconstituted agency authority to go after “abusive practices” whose definition in the law is fairly vague. Thus, the agency itself will define the term as it also decides which businesses will face its scrutiny.

It appears that the new law will affect firms involved in debt settlement, credit repair, check cashing, rent-to-own contracts, payday lending, student loan servicing and financing for retail sales. However, its primary target seems to be financial services offered by non-banks, particularly what are called “fintech companies” that offer bank-like services via the Internet without maintaining physical offices.

Fintechs, many of them based in the San Francisco Bay Area, have blossomed in recent years as part of the digital economy, competing with traditional brick-and-mortar banks. Their disruptive nature is not unlike the challenge that technology-based ride services such as Uber and Lyft pose to taxicabs and buses.

Late-blooming changes in AB 1864 exempted traditional financial firms that are already regulated, such as banks and credit unions, from the new consumer protection law, leading some analysts to conclude that its unstated aim is to help them stave off competition from new kids on the financial block.

The vagueness of the new law was encapsulated in what Gov. Gavin Newsom said during a signing ceremony. The new law and the new department, he said, will “create conditions for innovation to flourish in a way where we can steward that and we can just work against its excesses. So we support risk-taking, not recklessness.”

Newsom also signed two other financial protection measures, one that requires debt collectors to be licensed beginning in 2022 and the other creating a Student Loan Borrower Bill of Rights.

Although the new state law is said to mirror the Dodd-Frank law, it contains at least one significant difference. When federal regulators levy fines for what they consider to be bad conduct, the money goes into the federal treasury. When state regulators impose their fines of up to $1 million a day, the money will be retained by the new agency to finance more activity.

Will that give the new agency a financial incentive to skip over minor consumer issues and go after big companies? It’s a question that only time will answer.

Significantly too, the new investigative and regulatory mechanism contained in AB 1864 specifically does not usurp the authority of the attorney general to also target companies under the state’s equally vague “unfair competition” law.

From its inception a decade ago, Dodd-Frank has attracted criticism from business executives for regulatory overkill. Will California’s new version be less controversial? We won’t know until the new agency puts some definitional meat on its bones.



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California’s vague new financial regulation law – Whittier Daily News

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Assembly Bill 1864 didn’t get much media or public attention as it zipped through both houses of the Legislature on the last day of the 2020 session.

Superficially, it appeared merely to reconfigure the state’s financial regulatory agencies into a new entity called the Department of Financial Protection and Innovation.

However, those in California’s vast financial industry were paying lots of attention because the bill creates an entirely new regulatory regime with broad powers, including fines of up to $1 million a day, to police financial players that hitherto have had little oversight.

The official rationale for the legislation is that President Donald Trump’s administration neutered the federal Dodd-Frank Wall Street Consumer Financial Protection Act of 2010, so the state must step in with an equivalent to guard against predatory financial practices that harm consumers.

The new California Consumer Financial Protection Law gives the reconstituted agency authority to go after “abusive practices” whose definition in the law is fairly vague. Thus, the agency itself will define the term as it also decides which businesses will face its scrutiny.

It appears that the new law will affect firms involved in debt settlement, credit repair, check cashing, rent-to-own contracts, payday lending, student loan servicing and financing for retail sales. However, its primary target seems to be financial services offered by non-banks, particularly what are called “fintech companies” that offer bank-like services via the Internet without maintaining physical offices.

Fintechs, many of them based in the San Francisco Bay Area, have blossomed in recent years as part of the digital economy, competing with traditional brick-and-mortar banks. Their disruptive nature is not unlike the challenge that technology-based ride services such as Uber and Lyft pose to taxicabs and buses.

Late-blooming changes in AB 1864 exempted traditional financial firms that are already regulated, such as banks and credit unions, from the new consumer protection law, leading some analysts to conclude that its unstated aim is to help them stave off competition from new kids on the financial block.

The vagueness of the new law was encapsulated in what Gov. Gavin Newsom said during a signing ceremony. The new law and the new department, he said, will “create conditions for innovation to flourish in a way where we can steward that and we can just work against its excesses. So we support risk-taking, not recklessness.”

Newsom also signed two other financial protection measures, one that requires debt collectors to be licensed beginning in 2022 and the other creating a Student Loan Borrower Bill of Rights.

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397 people register to vote on deadline day at Duval Supervisor of Elections – 104.5 WOKV

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JACKSONVILLE, Fla. — Monday, Oct. 5 at midnight, is the deadline to register to vote in Duval County.

But the Supervisor of Elections helped hundreds of people get registered today.

Robert Phillips, the chief elections officer of the Duval Supervisor of Elections, told Action News Jax’s Courtney Cole that 397 people came down to the Supervisor of Elections in downtown Jacksonville to get registered.

Supervisor of Elections staff assembled tents outside to allow people to register to vote without having to go through the COVID-19 prescreening necessary to enter the building.

“Again, 2020 has thrown us some challenges,” Phillips said.

There was even a little rain thrown into the mix today, but it didn’t stop folks from coming out.

“Out here, we have a lot of activity. We’ve been going since first thing this morning,” Phillips told Action News Jax.

There were people of all ages from all walks of life — some even registered for the very first time like Lemark Jamison.

Monday, Oct. 5, is a day he will always remember.

“It feels awesome, you know? It feels awesome,” Jamison told Cole.

Today, Jamison had the opportunity to register to vote for the first time in Florida.

“I’ve worked for voter registration companies. I’ve done advocating for Amendment 4, but I was never able to vote because of my prior background. But now I can,” Jamison said.

Jamison, the owner of a tax and credit repair business, told Cole his prior felony conviction held him back in the past.

In November 2018, more than 60% of Floridians voted to restore voting rights to more than 1 million people who completed their sentences.

But several months later, legislation was passed that required them to pay all financial penalties, which means thousands lost the right as quickly as they gained it.

“I’ve been contributing to society. I’ve been able to have several businesses. And I pay taxes. But I haven’t been able to, when it comes to voting, whether in a local level or any type of legislature — I haven’t been able to vote,” Jamison said.

The 35-year-old told Cole even though his wife helped him fill out his voter registration form — to which he exclaimed, “Thank God for wives, right?” — he told Cole it was pretty easy.

Now, he has this advice to share with other people who may be in his shoes:

“Get out and vote. Take advantage of this opportunity, regardless of who you plan on voting for.”

Here’s a breakdown from the Supervisor of Elections of how the 397 people registered today:

-56% registered as Democrats.

-21% registered as Republicans.

-22% registered as nonparty affiliates.



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