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The second 2024 issue of Consumer Compliance Outlook has been released by the Federal Reserve, with a focus on consumer complaints. The issue includes these articles:

• The Benefits of a Formal Complaint Management Program
• Consumer Complaints 2023: A Review of Federal Reserve Data
• Enhancing the Compliance Management Program with Complaint Data

The Federal Housing Finance Agency has announced that U.S. house prices were unchanged in May, according to the FHFA's seasonally adjusted monthly House Price Index (HPI). House prices rose 5.7 percent from May 2023 to May 2024. The previously reported 0.2 percent price increase in April was revised upward to 0.3 percent.

For the nine census divisions, seasonally adjusted monthly price changes from April 2024 to May 2024 ranged from -0.5 percent in the West North Central division to +0.3 percent in the New England division. The 12-month changes were all positive, ranging from +2.4 percent in the West South Central division to +9.2 percent in the New England division.

The FDIC has released a list of enforcement orders and notices it issued in June 2024. Among those orders are four prohibition orders; one combined prohibition order and order to pay a civil money penalty (CMP); and one CMP order. The first Notice seeks a prohibition order; the second Notice seeks a prohibition order and assessment of a CMP.

• A Notice of Charges and Hearing seeking a civil money penalty and prohibition order against Elias Israel Robiero Rangel, now or formerly affiliated with Truist Bank, Charlotte, NC
• A Notice of Charges and Hearing for a prohibition order against Martin Fernandez Jr., now or formerly affiliated with International Bank of Commerce, Laredo, TX
• An order for assessment of a $15,000 CMP and prohibition against Toni Miller, formerly affiliated with South State Bank, Columbia, SC
• An order assessing a CMP of $7,000 against Mohammed A. Kasem, now or formerly affiliated with Truist Bank, Charlotte, NC
• An order of prohibition against Joshua E. Breedwell, formerly affiliates with Discover Bank, Greenwood, DE
• An order of prohibition against Brady D. Torgerson, formerly affiliated with The Union Bank, Beulah, ND, and First Security Bank, West Beulah, ND
• An order of prohibition against Mitchell A. Fowler, formerly affiliated with Sunmark Community Bank, Perry, GA

The CFPB on Friday announced it has sued Acima Holdings, LLC, Acima Digital, LLC (subsidiaries of Rent-a-Center (now known as Upbound Group, Inc.), and collectively, "Acima"), and Acima's founder and former CEO, Aaron Allred for illegal lending activities in connection with as many as five million consumer financing agreements.

The CFPB alleges Acima used deceptive dark patterns and other tricks to trap consumers in high-cost credit agreements to finance the purchase of household goods. Acima sought to disguise many of these credit agreements as leases to evade consumer financial protection laws. Due to Acima’s deception and obstruction, many consumers did not understand they were agreeing to expensive markups, exorbitant finance charges, and having few ways to escape their contracts. The CFPB is asking that the court order the defendants to forfeit the illegally obtained profits, give refunds to consumers, and halt their misconduct.

The CFPB’s lawsuit alleges Acima violated the Consumer Financial Protection Act, Truth in Lending Act, Fair Credit Reporting Act, and Electronic Fund Transfer Act. Specifically, the CFPB alleges Acima has misled and harmed consumers through:

• False marketing
• Deceptive digital dark patterns
• Trapping borrowers
• Widespread credit reporting failures

The FDIC, Federal Reserve Board, and the OCC yesterday announced their second notice requesting comment to reduce regulatory burden. The Economic Growth and Regulatory Paperwork Reduction Act of 1996 requires the Federal Financial Institutions Examination Council and federal bank regulatory agencies to review their regulations every 10 years to identify outdated or otherwise unnecessary regulatory requirements for their supervised institutions.

To facilitate this review, the agencies divided their regulations into 12 categories and are now soliciting comments on their regulations in three categories: Consumer Protection; Directors, Officers, and Employees; and Money Laundering. The public has 90 days from publication in the Federal Register to comment on the relevant regulations. PUBLICATION AND COMMENT PERIOD UPDATE: Published at 89 FR 62679 in the August 1, 2024, Federal Register, with comments due by 10/30/2024.

In a related news release, the agencies announced they will hold a virtual public outreach meeting on September 25, 2024, as part of their review of regulations. The outreach meeting is an opportunity for interested stakeholders to present their views on the six categories of regulations listed in the first two Federal Register notices: Applications and Reporting; Powers and Activities; International Operations; Consumer Protection; Directors, Officers and Employees; and Money Laundering.

Individuals interested in providing oral comments must register by August 9, 2024, and indicate the regulatory category they would like to discuss. The agencies will notify those individuals selected to provide comments within one month of registration closing.

Advance registration is not required to attend this virtual public meeting as an observer.

The FDIC, OCC, and Federal Reserve yesterday jointly issued a statement reminding banks of potential risks associated with third-party arrangements to deliver bank deposit products and services. The agencies support responsible innovation and banks engaging in these arrangements in a safe and sound manner and in compliance with applicable law. While these arrangements can provide benefits, supervisory experience has identified a range of safety and soundness, compliance, and consumer-related concerns with the management of these arrangements.

The statement details the potential risks and provides examples of effective risk management practices for these arrangements. In addition, the statement reminds banks of relevant existing legal requirements, guidance, and related resources, and provides insights that the agencies have gained through their supervision. The statement does not establish new supervisory expectations.

Separately, the agencies have requested additional information on a broad range of bank-fintech arrangements, including with respect to deposit, payments, and lending products and services. The agencies are seeking input on the nature and implications of bank-fintech arrangements and effective risk management practices. Responses and comments will be accepted for 60 days following publication of the request for information in the Federal Register. [Update: Published 7/31/2024 at 89 FR 61577, with a 61-day comment period ending 9/30/2024.]

The agencies are considering whether additional steps could help ensure banks effectively manage risks associated with these various types of arrangements.

• OCC Bulletin 2024-20
• OCC Bulletin 2024-21
• FDIC FIL-45-2024

The Federal Reserve Board has reported it has executed a consent order for the assessment of a $4,800 civil money penalty against North Shore Bank of Commerce, Duluth, Minnesota, for a pattern or practice of violations of Regulation H, 12 C.F.R. § 208.25, which implements the provisions of the National Flood Insurance Act.

The NMLS yesterday launched a video and podcast highlighting NMLS enhancements completed July 20 to improve the NMLS regulator and user experience. The enhancements mark the beginning of a multi-year effort to continually improve NMLS.

The FFIEC has released the 2024 Census flat file, which incorporates the boundary changes from OMB Bulletin 23-01.

Five federal agencies — the CFPB, FDIC, Federal Reserve, NCUA, and OCC — yesterday jointly announced final guidance addressing reconsiderations of value (ROVs) for residential real estate transactions. The guidance advises on policies and procedures that financial institutions may implement to allow consumers to provide financial institutions with information that may not have been considered during an appraisal or if deficiencies are identified in the original appraisal.

ROVs are requests from a financial institution to an appraiser or other preparer of a valuation report to reassess the value of residential real estate. Deficiencies identified in valuations, either through an institution's valuation review processes or through consumer-provided information, may be a basis for financial institutions to question the credibility of the appraisal or valuation report.

The guidance offers examples of ROV policies and procedures that a financial institution may implement to help institutions identify, address, and mitigate discrimination risk; describes the risks of deficient residential real estate valuations; and explains how financial institutions may incorporate ROV processes into risk management functions. The agencies finalized the guidance largely as proposed, with the addition of clarifying edits based on public comments received on the proposed guidance published in July 2023.

The guidance is final as of the date it is published in the Federal Register.

• Federal Register notice: Interagency Guidance on Reconsiderations of Value of Residential Real Estate Valuations.
• Publication update: Published in the Federal Register on 7/26/2024 at 89 FR 60549