All work at the CFPB, including supervision and examination activities, has ceased following an order by the bureau’s new acting director. Several rulemakings are also on pause.
The order, reached following a scheduling conference, also prohibits the administration from deleting data held by the CFPB and from transferring money from the bureau’s reserve funds.
Federal regulation is needed for data privacy, earned wage access products and artificial intelligence, industry experts say. But states may end up carrying the ball on some of these issues plus others.
The stay for now only applies to some lenders. But a pending court ruling in a Kentucky lawsuit against the bureau’s Section 1071 rule could stay compliance with the rule for all covered entities.
The next round of improvements is expected to go live during the third quarter and will include a new FBI identity verification requirement for some users.
Plaintiffs argued that fees charged to expedite payment were in violation of a Fair Debt Collection Practices Act provision that prohibits the collection of any amount unless it was expressly authorized when the debt was created.
A California law requiring interest to be paid on escrow account balances doesn’t “significantly interfere” with the powers of national banks, state regulators argue.
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