Alston & Bird Consumer Finance Blog

Consumer Financial Protection Bureau (CFPB)

CFPB Issues Its Fall 2019 Rulemaking Agenda

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A&B Abstract:

On November 20, 2019, the Consumer Financial Protection Bureau (the “Bureau” or “CFPB”) published its Fall 2019 Rulemaking Agenda (the “Rulemaking Agenda”) as part of the Fall 2019 Unified Agenda of Federal Regulatory and Deregulatory Actions. The Rulemaking Agenda sets forth the matters that the Bureau reasonably anticipates having under consideration during the period from October 1, 2019 to September 30, 2020.  The Rulemaking Agenda is the first Unified Agenda prepared by the CFPB since Director Kraninger embarked on her “listening tour” shortly after taking office in December 2018. Below we highlight some of the key agenda items discussed in the Rulemaking Agenda.

Implementing Statutory Directives

In the Rulemaking Agenda, the Bureau indicates that it is engaged in a number of rulemakings to implement directives mandated in the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (“EGRRCPA”), the Dodd-Frank Act and other statutes.  For example:

Truth in Lending Act

In March 2019, the Bureau published an Advanced Notice of Proposed Rulemaking (“ANPR”) seeking public comment relating to the implementation of section 307 of the EGRRCPA, which amends the Truth in Lending Act (“TILA”) to mandate that the Bureau prescribe certain regulations relating to “Property Assessed Clean Energy” (“PACE”) financing.  The Bureau indicated that it is reviewing the comments it has received in response to the ANPR as it considers next steps to facilitate the development of a Notice of Proposed Rulemaking (“NPRM”).

TRID Rule Guidance

The Bureau has also been engaged in several other activities to support its rulemaking to implement the EGRRCPA.  For example, the Bureau noted that it has (i) updated its small entity compliance guides and other compliance aids to reflect the EGRRCPA’s statutory changes; and (ii) issued written guidance as encouraged by section 109 of the EGRRCPA, which provides that the Bureau “should endeavor to provide clearer, authoritative guidance” on the CFPB’s TILA/RESPA Integrated Disclosure rule.

Implementation of Section 1071 of Dodd-Frank

Additionally, the Bureau is undertaking certain activities to facilitate its mandate to prescribe rules implementing Section 1071 of the Dodd-Frank Act, which amended the Equal Credit Opportunity Act to require financial institutions to collect, report, and make public certain information concerning credit applications made by women-owned, minority-owned, and small businesses.  For example, on November 6, 2019, the Bureau hosted a symposium on small business data collection in order to facilitate a discussion with outside experts on the issues implicated by creating such a data collection and reporting regime.

We have previously issued an advisory in which we discuss the key mortgage servicing takeaways from the EGRRCPA.

Continuation of the CFPB’s Spring 2019 Rulemaking Agenda

The Rulemaking Agenda notes that the Bureau will continue with certain other rulemakings that were described in its Spring 2019 Agenda that are intended to “articulate clear rules of the road for regulated entities that promote competition, increase transparency, and preserve fair markets for financial products and services.”  Such rulemakings include:

HMDA and Regulation C

In May 2019, the Bureau issued a NPRM to (i) reconsider the thresholds for reporting data about closed-end mortgage loans and open-end lines of credit under the Bureau’s 2015 Home Mortgage Disclosure Act (“HMDA”) Rule and to incorporate into Regulation C an interpretive and procedural rule that the Bureau issued in August 2018 in order to implement certain partial HMDA exemptions created by the EGRRCPA.  In summer 2020, the Bureau is expecting to issue an NPRM to follow-up on an ANPR issued in May 2019 related to data points and coverage of certain business- or commercial-purpose loans.  The Bureau also anticipates issuing a NPRM addressing the public disclosure of HMDA data in light of consumer privacy interests to allow the Bureau to concurrently consider the collection and reporting of data points and the public disclosure of those data points.

Proposed Regulation F

In May 2019, the Bureau issued a NPRM which would, for the first time, prescribe substantive rules under Regulation F, which implements the Fair Debt Collection Practices Act, to govern the activities of debt collectors (the “Proposed Rule”). The Proposed Rule would address several issues related to debt collection, such as (i) addressing communications in connection with debt collection; (ii) interpreting and applying prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection; and (iii) clarifying requirements for certain consumer-facing debt collection disclosures.  The Bureau noted that it is also engaged in testing of consumer disclosures relating to time time-barred debt disclosure issues that were not part of the Proposed Rule.  The results of the CFPB’s testing will inform the Bureau’s assessment of whether to issue a supplemental NPRM seeking comments on any disclosure proposals related to the collection of time-barred debt.

We previously published a five-part blog series in which we discussed the provisions of the Proposed Rule that are under consideration. We will continue to monitor and report on any developments related to the Proposed Rule.

Payday, Vehicle Title, and Certain High-Cost Installment Loans (the “Payday Rule”)

The Bureau is expecting to take final action in April 2020 on the NPRM issued in February 2019 related to the reconsideration of the mandatory underwriting requirements of the 2017 Payday Rule.  That said, we note that the U.S. District Court for the Western District of Texas has stayed the Payday Rule’s August 19, 2019 compliance date. The parties before the court have a status hearing on December 6, 2019 which could affect the stay and the effective date of the Payday Rule.

Remittance Rule

In addition, the Rulemaking Agenda notes that the Bureau is planning to issue a proposal this year to amend the CFPB’s Remittance Rule to address the effects of the expiration in July 2020 of the Rule’s temporary exception allowing institutions to estimate fees and exchange rates in certain circumstances.

New Rulemakings and Review of Existing Regulations

Expiration of the “GSE Patch”

In January 2019, the Bureau completed an assessment of certain rules that require mortgage lenders to make a reasonable and good faith determination that consumers have a reasonable ability to repay certain mortgage loans and that define certain “qualified mortgages” that a lender may presume comply with the statutory ability-to-repay requirement. The “GSE Patch” is set to expire in January 2021, meaning that loans eligible to be purchased or guaranteed by GSEs that are originated after that date would not be eligible for qualified mortgage status under its criteria. In July 2019, the Bureau issued an ANPR to amend Regulation Z, regarding the scheduled expiration of the GSE Patch, and is currently reviewing the comments it received since the comment period closed on September 2019.

As noted in a previous blog post, the CFPB announced in its ANPR, that the Bureau does not intend to extend the GSE patch permanently. It will be interesting to see whether the Bureau will allow the patch to expire in January 2021 as planned of if the Bureau will use this as an opportunity to possibly extend the expiration date.

Addition of New Regulatory Agenda Items

In response to feedback received in response to the Bureau’s 2018 Call for Evidence and other outreach efforts, the Bureau is adding two new items to its long-term regulatory agenda to address concerns related to (i) loan originator compensation; and (ii) the use of electronic channels of communication in the origination and servicing of credit card accounts.

Review of Existing Regulations

The Rulemaking Agenda also highlights the Bureau’s active review of existing regulations.  For example, the CFPB will be assessing its so-called TRID Rule pursuant to Section 1022(d) of the Dodd-Frank Act, which requires the CFPB to publish a report assessing the effectiveness of each “significant rule or order” within five years of it taking effect.  The Bureau must issue a report with the results of its assessment by October 2020.

The Rulemaking Agenda further notes that, in 2020, the Bureau expects to conduct a 610 RFA review of the Regulation Z rules that implemented the Credit Card Accountability Responsibility and Disclosure Act of 2009.  Section 610 of the RFA requires federal agencies to review each rule that has or will have a significant economic impact on a substantial number of small entities within 10 years of publication of the final rule.

Takeaway

The Bureau’s Rulemaking Agenda gives industry an advanced look at what to expect from the CFPB in the coming months. We expect the Bureau to be active in working through their agenda and will provide further updates as they become available.

* We would like to thank Associate, David McGee, for his contributions to this blog post.

CFPB Updates Financial Institution Guidance on Elder Financial Exploitation

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A&B ABstract:

In July 2019, the Consumer Financial Protection Bureau (“CFPB”) issued an update to its 2016 Advisory and Recommendations for Financial Institutions on Preventing and Responding to Elder Financial Exploitation (“Update”).  The Update focuses on recent developments in state laws related to elder financial exploitation (“EFE”) and makes a number of recommendations to financial institutions on how to best handle EFE.

Developments in State Law

The Update highlighted four principal sets of state law developments.

Reporting Obligations:

As of April 2019, 26 states and the District of Columbia require financial institutions or certain financial professionals to report suspected EFE.

Transaction Holds:

Since 2016, a substantial number of states have enacted legislation permitting delayed disbursements of funds or transaction holds when a financial institution believes that financial exploitation may occur. Generally, when a financial institution chooses to hold a transaction, it must report the suspected financial exploitation.  Most states’ statutes apply only to broker/dealers, financial advisers, or others dealing in securities.  Several states, however, also extend their statutes to depository institutions such as banks and credit unions.

Record Production:

Since 2016, Kentucky, Tennessee, Texas, and Utah have enacted new laws regarding the production of records to investigatory agencies. Kentucky and Texas (along with Illinois Minnesota, and Wisconsin) now require that financial institutions provide records related to suspected EFE to Adult Protective Services (“APS”) and law enforcement, either as part of a report or referral or upon request pursuant to an investigation.  Tennessee and Utah (along with North Carolina) now require that financial institutions provide records related to suspected EFE to authorized investigatory agencies if the agency serves a subpoena.  Additionally, Maryland and Washington permit, but do not require, financial institutions to provide records related to suspected EFE as part of a report or referral or upon request pursuant to an investigation.

Employee Obligations:

Ohio now requires that employees of banks, savings banks, savings and loan associations, or credit unions, in addition to certain financial professionals, report suspected financial exploitation.

CFPB Recommendations to Financial Institutions

The  CFPB also made a series of  recommendations in the Update.

Protocols and Procedures:

First, financial institutions should develop and implement internal protocols and procedures for protecting account holders from EFE, including training requirements, procedures for making reports, compliance with the Electronic Fund Transfer Act as implemented by Regulation E, means of consent for information-sharing with trusted third parties, and procedures for collaborating with key stakeholders.

Technology:

Second, financial institutions should harness technology to detect EFE by ensuring that their fraud detection systems include analyses of the types of products and account activity that may be associated with EFE risk.

Reporting:

Third, financial institutions should report suspected EFE to all appropriate local, state, or federal responders, regardless of whether reporting is mandatory or voluntary under state or federal law (which, in general, does not violate the privacy provisions of the Gramm-Leach-Bliley Act).

SAR Filings:

Fourth, financial institutions should file Suspicious Activity Reports (“SARs”) when the financial institution suspects EFE.  When a financial institution files an EFE-related SAR, it should also report to APS and/or relevant law enforcement agencies.  Financial institutions should work with their legal counsel to expedite their responses to requests for SAR supporting documentation by law enforcement and other agencies with authority to access SARs.

Collaboration:

Fifth, financial institutions should collaborate with other stakeholders such as law enforcement, APS, and service organizations, as well as expedite documentation requests and provide financial records at no charge to APS and law enforcement when requested.

Training:

Finally, financial institutions should establish clear, efficient training protocols to enhance their capacity to prevent, detect, and respond to EFE.  This training curriculum should include indicators of potential EFE, describe what actions to take when employees detect problems, and describe the roles of management, frontline staff, and other employees.  A key benefit from following this suggestion is that under the Federal Senior Safe Act, which became effective in June 2018, an eligible financial institution[i] is not liable for disclosing suspected EFE to certain agencies if the institution has trained its employees on identifying EFE and the disclosure is made in good faith and with reasonable care by a trained employee.[ii]

Takeaways

These developments at the state level and recommendations by the CFPB strongly indicate a governmental full‑court press against EFE.  While local, state, and federal agencies and law enforcement are all working to identify and address EFE, financial institutions play an integral role in the process.  Financial institutions should ensure compliance with state law and should train their personnel to detect EFE and report suspected EFEs to relevant law enforcement and governmental agencies.

[i] Eligible institutions are depository institutions, credit unions, investment advisers, broker/dealers, insurance companies, insurance agencies, insurance advisers, and transfer agents.

[ii] Specifically, the training must: (1) instruct any individual attending the training on how to identify and report the suspected exploitation of a senior citizen internally and, as appropriate, to government officials or law enforcement authorities, including common signs that indicate the financial exploitation of a senior citizen; (2) discuss the need to protect the privacy and respect the integrity of each individual customer of the covered financial institution; and (3) be appropriate to the job responsibilities of the individual attending the training.

Supreme Court to Decide CFPB’s Constitutionality

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A&B ABstract: On October 18, 2019, the Supreme Court granted certiorari in Seila Law v. CFPB to decide the constitutionality of the Consumer Financial Protection Bureau’s leadership structure.[1]  Significantly, the Court also ordered the parties to brief and argue a second question: “If the Consumer Financial Protection Bureau [“CFPB”] is found unconstitutional on the basis of the separation of powers, can 12 U.S.C. § 5491(c)(3) [which permits the President to remove the Director of the CFPB only for cause] be severed from the Dodd-Frank Act?”[2]

A decision on these two questions could significantly affect every financial institution or entity regulated by the CFPB.

The Constitutionality of the CFPB

In response to the 2008 financial crisis, Congress passed the Dodd-Frank Act, which included the Consumer Financial Protection Act (“CFPA”) and created, arguably, one of the most powerful federal agencies to have ever existed—the CFPB.[3]  This power emanates from the CFPB’s single director structure, the CFPB’s broad rulemaking and enforcement authority, and the fact that the CFPB’s Director is insulated from removal except for cause.  Since the CFPB’s inception, there have been numerous challenges to the constitutionality of what is known as the “for-cause” removal provision of the CFPA, which permits the President to remove the Director of the CFPB, not at will, but only “for inefficiency, neglect of duty, or malfeasance in office.”[4]  Challenges have been brought in courts in the Second, Third, Fifth, Ninth, Tenth, Eleventh, and D.C. Circuits.[5]

One of the most significant challenges to the CFPB’s constitutionality occurred before an en banc D.C. Circuit in PHH Corp. v. CFPB.  There, a majority of the D.C. Circuit held that the CFPB’s leadership structure was constitutional, reversing the three-judge-panel decision written by now-Justice Kavanaugh.[6]   Justice Kavanaugh then dissented from the en banc opinion that reversed the original decision. In his dissent, he again concluded that the CFPB’s leadership structure was unconstitutional because the Director’s power and authority were “massive in scope, concentrated in a single person, and unaccountable to the President.”[7]  It is unclear whether Justice Kavanaugh will choose to recuse himself in Seila Law, given that he has already ruled on the issue of the CFPB’s constitutionality in PHH Corp., though he is not required to do so.

One of the most recent challenges, and the one to be reviewed by the Supreme Court, was raised by the law firm Seila Law.  As explained in a previous post,[8] Seila Law involves Seila Law’s refusal to comply with a CFPB civil investigative demand (“CID”).  When the CFPB moved to enforce the CID in federal district court, Seila Law argued that the CFPB’s structure was unconstitutional and, as a result, the CID was unenforceable.  While the CFPB prevailed before the district court, and on appeal to the Ninth Circuit, with the argument that the CFPB’s leadership structure was constitutional, it has since asserted the new position that the for-cause removal provision is unconstitutional.[9]  The Supreme Court has now taken up Seila Law’s petition for certiorari.

The Severability Question

While Seila Law petitioned for certiorari on the issue of whether the CFPB’s leadership structure is unconstitutional, the obvious follow-up question is what happens as the remedy if it is.  That is, what happens if the Supreme Court strikes down the CFPA’s for-cause removal provision?  Recognizing this, when the Supreme Court granted certiorari in Seila Law, it sua sponte also ordered the parties to brief and argue the additional question of whether the for-cause removal provision is severable from the remainder of the CFPA, if the CFPB’s leadership structure is found unconstitutional on the basis of separation of powers.

This is significant because if the Court holds that the provision is not severable, it could strike down the entire CFPA, resulting in any number of drastic consequences.  For example, the Court could strip the CFPB of its enforcement powers or hold that all of the CFPB’s actions to date were ultra vires.  At least one amicus litigant in Seila Law has already made arguments to this end.  The State of Texas’s amicus brief on the certiorari issue took the position that the for-cause removal provision renders the CFPB unconstitutional and, as a result, there is no obligation for Seila Law to answer the CFPB’s CID.[10]

If the provision is found to be severable, then the CFPB likely would proceed with business as usual, even if its structure is held unconstitutional because the remedy would be to make the CFPB’s Director removable at the will of the President.  This is the position the CFPB has taken in recent statements agreeing that its leadership structure is unconstitutional.[11] The CFPB has largely relied on the fact that the Dodd-Frank Act contains a severability clause, which states that “[i]f any provision of this Act . . . is held to be unconstitutional, the remainder of this Act . . . shall not be affected thereby.”[12]  As such, the CFPB has stated that “a Supreme Court decision holding that the for-cause removal provision is unconstitutional should not affect the Bureau’s ability to carry out its important mission [of consumer protection],” because “if the Court holds the for-cause removal provision unconstitutional, the CFPA should remain ‘fully operative’ and the Bureau would ‘continue to function as before, just with a Director who ‘may be removed at will by the President.’”[13]

Notably, though it is unclear what position the Justices will take on the severability issue, Justice Kavanaugh’s original decision in PHH Corp., and his dissent in the en banc review, also touched on severability, finding that “[a]s to remedy . . . [t]he Supreme Court’s Free Enterprise Fund decision and the Court’s other severability precedents require that we sever the CFPB’s for-cause provision, so that the Director of the CFPB is supervised, directed, and removable at will by the President.”[14]

Takeaway

After years of litigation, and conflicting court decisions, the Supreme Court has finally agreed to take on the question of whether the CFPB’s leadership structure is unconstitutional and, if so, what the remedy should be.  That said, even if the CFPB’s leadership structure is found to be unconstitutional, at least one conservative Justice is already on record with the conclusion that the for-cause provision is severable (though Justice Kavanaugh could elect to recuse himself).  While the ultimate outcome is unclear, this case promises to be a major development in the arena of consumer finance and administrative law.

Seila Law will likely be scheduled for oral argument in early 2020, with a decision following in the coming summer.  For now, we will be monitoring the case for developments, including what arguments rise to the top during the briefing process.

[1] https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/19-7.html (Oct. 18, 2019).
[2] Id.
[3] See 12 U.S.C. § 5491.
[4] See 12 U.S.C. § 5491(c)(3); see e.g., CFPB v. Nationwide Biweekly Admin., No. 18-15431 (9th Cir.); CFPB v. CashCall, Inc., No. 18-55479 (9th Cir.); CFPB v. All Am. Check Cashing, Inc., No. 18-90015 (5th Cir.); CFPB v. RD Legal Funding, LLC, No.18-2860 (2d Cir.); Community Fin. Servs. Assoc. v. CFPB, No. 1:18-cv-0295 (W.D. Tex.); CFPB v. Ocwen Fin. Corp., No. 9:17-cv-80495 (S.D. Fla.); BCFP v. Progrexion Mktg., Inc., 2:19-cv-00298 (D. Utah); CFPB v. Navient Corp., 3:17-cv-101 (M.D. Pa.).
[5] See CFPB v. Nationwide Biweekly Admin., No. 18-15431 (9th Cir.); CFPB v. CashCall, Inc., No. 18-55479 (9th Cir.); CFPB v. All Am. Check Cashing, Inc., No. 18-90015 (5th Cir.); CFPB v. RD Legal Funding, LLC, No.18-2860 (2d Cir.); Community Fin. Servs. Assoc. v. CFPB, No. 1:18-cv-0295 (W.D. Tex.); CFPB u. Ocwen Fin. Corp., No. 9:17-cv-80495 (S.D. Fla.); BCFP v. Progrexion Mktg., Inc., 2:19-cv-00298 (D. Utah); CFPB v. Navient Corp., 3:17-cv-101 (M.D. Pa.).
[6] PHH Corp. v. Consumer Fin. Prot. Bureau, 881 F.3d 75 (D.C. Cir. 2018) (en banc).
[7] PHH Corp., 881 F.3d 75, 166 (Kavanaugh, J., dissenting).
[8] https://www.alstonconsumerfinance.com/cfpb-changes-tack-on-for-cause-removal-provision/.
[9] See CFPB v. Seila Law, No. 19-7 (S. Ct. ), CFPB Br. on Pet. for Cert. (filed Sept. 17, 2019).
[10] See CFPB v. Seila Law, No. 19-7 (S. Ct.), Texas Amicus Br. on Pet. for Cert. at 16.
[11] See September 17, 2019 Letters from Director Kraninger to Speaker Pelosi and Majority Leader McConnell (quoting Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 561 U.S. 477, 508 (2010)).
[12] See 12 USCS § 5302 (“If any provision of this Act, an amendment made by this Act, or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the application of the provisions of such to any person or circumstance shall not be affected thereby.”).
[13] See September 17, 2019 Letters from Director Kraninger to Speaker Pelosi and Majority Leader McConnell (quoting Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 561 U.S. 477, 508 (2010)).
[14] PHH Corp., 881 F.3d 75, 167 (Kavanaugh, J., dissenting).

CFPB Issues Final HMDA Rule Incorporating Reporting Exemptions

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A&B ABstract:  In a final rule issued on October 10, 2019, the CFPB amended Regulation C under the Home Mortgage Disclosure Act to incorporate exemptions created by the Economic Growth, Regulatory Relief, and Consumer Protection Act, among other changes.

Discussion:

Effective January 1, 2020, the Consumer Financial Protection Bureau issued a final rule under the Home Mortgage Disclosure Act (“HMDA”), addressing certain exemptions from HMDA’s reporting requirements.

Threshold Exemption for Reporting on Open-End Loans

The CFPB has extended to January 1, 2022, an increased threshold for reporting HMDA data on open-end loans.  Specifically, the rule maintains the threshold of 500 transactions below which a lending institution is not required to report loan data.  (Thus, an entity originating fewer than 500 transactions is exempt.)   However, if a financial institution that is under the 500-transaction threshold chooses to report any excluded applications for, or originations or purchases of open-end lines of credit, it must report all such transactions.

Incorporation of Partial Exemptions Under the Regulatory Relief Act

The final rule incorporates into Regulation C provisions of an August 2018 interpretive and procedural rule adopted pursuant to the Regulatory Relief Act.  Specifically, an insured depository institution or credit union covered by a partial exemption may report exempt data fields as long as it reports all data fields within any exempt data point for which it reports data.  Section 1003.3(d) makes a partial exemption available to an entity that, in each of the preceding two calendar years, originated fewer than 500 closed-end mortgage loans or 500 open-end lines of credit.

The final rule also include clarifications:

  • That only loans and lines of credit that are otherwise reportable under HMDA count towards the thresholds for the partial exemptions;
  • Of which data points the partial exemptions cover; and
  • On the applicability of the partial exemptions to insured depository institutions with less-than-satisfactory CRA examination histories.

Takeaway:

In its rule announcement, the CFPB indicated that it will address permanent coverage thresholds for both closed-end mortgage loans and open-end lines of credit in a separate final rule.  We will continue to monitor the rulemaking process.

Arizona Seeks to Improve FinTech Sandbox with HB 2177

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A&B ABstract: Arizona launched a first-in-the-nation FinTech Sandbox in August 2018, which has been a successful venture by the state. Arizona seeks to improve this program with the enactment of HB 2177 and the Arizona Attorney General Office’s involvement in the CFPB’s American Consumer Financial Innovation Network.

Arizona’s FinTech Sandbox

In August 2018, Arizona was the first state to launch its “FinTech Sandbox” to ease state regulatory burdens for persons offering innovative financial technologies. (The July 2019 Alston & Bird LLP Structured Finance Spectrum provides further details).  This program allows such persons to register with the Attorney General’s Office and conduct limited tests of their technologies under its supervision without otherwise complying with more burdensome licensing and regulatory requirements. Arizona Attorney General Mark Brnovich has touted the success of this program, stating that it is “the most active and successful regulatory sandbox in North America.”

House Bill 2177

To improve this program, Arizona enacted HB 2177, which:

  • Makes businesses that provide a “substantial component of a financial product or service” eligible to participate, which will (i) allow for tests of products that affect how financial services are provided in the marketplace even if the product itself is not regulated and (ii) enable regulatory technology (“RegTech”) products to now seek entry into the program as stand-alone participants;
  • Requires applicants to demonstrate the cybersecurity measures they will undertake as part of a sandbox test to ensure consumer data remains private and protected; and
  • No longer requires that sandbox tests involving payments involve the participation of Arizona residents, as long as the transaction occurs in Arizona.

In a recent announcement regarding HB 2177, Attorney General Brnovich also announced his office’s participation in the American Consumer Financial Innovation Network (“ACFIN”).  ACFIN is a new CFPB initiative that seeks to bring together state and federal financial services regulators to collaborate on innovation-fostering programs like the FinTech Sandbox.  Given his office’s experience administering the program, Brnvich is encouraged by the federal efforts evident in ACFIN.

Takeaway

In addition to Arizona, Alabama, Georgia, Indiana, South Carolina, Tennessee and Utah are members of ACFIN. We are keeping our eyes on ACFIN, as we believe this to be an important initiative, and look forward to what is to come.