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The CFPB has issued a consent order to the Navy Federal Credit Union, which is the largest credit union in the country, with over $73 billion in assets as of last year-end, ordering the credit union to make redress payments totaling $23 million to consumers and pay a $5.5 civil money penalty for unfair and deceptive debt collection acts and practices. The Bureau investigation found that Navy Federal Credit Union deceived consumers to get them to pay delinquent accounts. The credit union falsely threatened severe actions when, in fact, it seldom took such actions or did not have authorization to take them. The credit union also cut off members’ electronic access to their accounts and bank cards if they did not pay overdue loans. The Bureau said that the credit union falsely threatened legal action and wage garnishment and to contact commanding officers about a consumer's debt, misrepresented the consequences of being delinquent on a loan, and illegally froze members' access to their accounts.

For details on the Bureau's action, see "Navy FCU pays $5.5MM CMP for debt collection practices," in our Penalties pages.

The Federal Reserve Board has posted the August 2016 G.19 consumer credit report data. Consumer debt increased at a seasonally adjusted annual rate of 8-1/2 percent. Revolving credit increased at an annual rate of 7 percent, while nonrevolving credit increased at an annual rate of 9 percent.

FDIC FIL-62-2016 has announced measures to provide regulatory relief to financial institutions and to facilitate recovery in areas of Florida affected by Hurricane Hermine. With Hermine now "old news" in Florida, we can expect another announcement in the wake of Hurricane Matthew, now ravaging the Sunshine State and threatening Georgia and the Carolinas.

The NCUA reports that Chairman Metsger has submitted a letter to the CFPB requesting an exemption from the final CFPB payday lending rule for NCUA’s payday alternative loan rules. “We respectfully request the Bureau exempt FCUs completely from its final rule for loans made under and consistent with NCUA’s PALs regulation,” Metsger said in his letter. “As the prudential regulator for federal credit unions, NCUA already ensures that members receive the type of protections the Bureau is seeking to address. The Bureau should therefore defer to determinations of the FCU prudential regulator about this product.”

The OCC will host two workshops in Cincinnati, Ohio, at the Hyatt Regency Cincinnati, November 9-10, for directors of national community banks and federal savings associations supervised by the OCC. The Compliance Risk workshop on November 9 combines lectures, discussion, and exercises on the critical elements of an effective compliance risk management program. Topics of discussion include the Bank Secrecy Act, Community Reinvestment Act, and the Truth-in-Lending (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA) Integrated Disclosures Rule, also known as TRID. The Operational Risk workshop on November 10 focuses on the key components of operational risk — people, processes and systems. The workshop also covers governance, third-party risk, vendor management, and cybersecurity.

The FDIC has issued a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in July 2016. Three were rated outstanding, 55 satisfactory, one needs to improve and none substantial non-compliance.

HUD has proposed utility benchmarking of water and energy in its portfolio of public and assisted, as well as newly-insured, multifamily housing. This new "utility benchmarking" initiative would apply to approximately 2.2 million units across several categories of HUD-assisted affordable housing: developments with Project Rental Assistance Contracts, multifamily properties with mortgages insured by the Federal Housing Administration (FHA), and Public Housing Authorities (PHAs) with more than 250 public housing units. Notice of the proposal has been sent to owners of multifamily properties and public housing authorities and published at 81 FR 68446 in the Federal Register. Comments are due by December 5, 2016.

Almost two years after its November 13, 2014, proposal, the Consumer Financial Protection Bureau announced early this morning a finalized rule amending Regulations E and Z to provide federal consumer protections for prepaid account users. The new rule requires financial institutions to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, and give consumers free and easy access to account information. The Bureau also finalized new “Know Before You Owe” disclosures for prepaid accounts to give consumers clear, upfront information about fees and other key details. Finally, prepaid companies must now generally offer protections similar to those for credit cards if consumers are allowed to use credit on their accounts to pay for transactions that they lack the money to cover.

The rule covers traditional prepaid cards, including general purpose reloadable cards. It also applies to mobile wallets, person-to-person payment products, and other electronic prepaid accounts that can store funds. Other prepaid accounts covered by the new rule include: payroll cards; student financial aid disbursement cards; tax refund cards; and certain federal, state, and local government benefit cards such as those used to distribute unemployment insurance and child support. New protections for these cards under the Electronic Fund Transfer Act and Regulation E include requirements for statements or free and multi-channel access to account information, error resolution rights, and protections for lost cards and unauthorized transactions. New upfront disclosures will use standard formats for both short-form and long-form versions, and card agreements will be publicly available on issuers' websites and, in the future, on a CFPB site.

Credit protections similar to those provided for credit card accounts will apply when consumers have access to credit products via their prepaid accounts, including ability to pay requirements, monthly billing statements, at least 21 days from billing to payment due dates, and limited fee and interest charges. Credit features cannot be made available via a prepaid account until 30 days after a consumer registers the account, and prepaid companies cannot automatically grab a credit repayment when a prepaid account is next reloaded with funds, and can't automatically take funds from a prepaid account balance when a credit payment is due without consumer consent.

The new rule will be effective October 1, 2017.

UPDATE: The rule was published in the Federal Register on November 22, 2016.

• The CFPB's Final Rule [1,689 page PDF]
• LINK to November 22, 2016, publication in the Federal Register
• Sample disclosures under the new rule
• Link to the Bureau's new Prepaid Accounts page, with links to resources, model forms, etc.
• The CFPB Prepaid Accounts implementation page
• Bureau YouTube video with highlights of the rule

The Federal Trade Commission has announced that a federal court has found that racecar driver Scott A. Tucker and several corporate defendants in a Kansas City-based payday lending scheme violated Section 5 of the FTC Act and has ordered them to pay $1.3 billion for deceiving consumers across the country and illegally charging them undisclosed and inflated fees. The $1.3 billion order handed down by the U.S. District Court for the District of Nevada stems from a complaint filed in 2012 by the agency, which alleged that the operators of AMG Services Inc. falsely claimed they would charge borrowers the loan amount plus a one-time finance fee. Instead, the defendants made multiple withdrawals from consumers’ bank accounts and assessed a new finance fee each time, without disclosing the true costs of the loan. The judgment represents the difference between what consumers actually paid on the loans and what they were told they would have to pay. See "Tucker et al hit with $1.3 B penalty…," in our Penalties pages, for additional information.

The Department of Housing and Urban Development has published an announcement at 81 FR 68297 in this morning's Federal Register concerning the fee that HUD will collect from borrowers of loans guaranteed under HUD's Section 108 Loan Guarantee Program to offset the credit subsidy costs of the guaranteed loans pursuant to commitments awarded in FY 2017. The fee will be 2.59% of the principal amount of the loan. The announcement carries an effective date of November 3, 2016.