As southern states work to recover from the second of two significant hurricanes in short succession, federal banking regulators again responded with guidance providing supervisory relief and details about available assistance for affected institutions. This guidance and information about recent enforcement actions and a new fraud report are included in this regulatory roundup:
Agencies issue joint statement on institutions affected by Hurricane Milton
In a response substantially similar to the one initiated for Hurricane Helene, the Federal Deposit Insurance Corp., the Federal Reserve Board, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Florida Office of Financial Regulation issued a joint statement providing for supervisory relief for financial institutions impacted by Hurricane Milton. The interagency guidance addressed issues banks and credit unions face regarding customers and operations and indicated what appropriate regulatory assistance the agencies would provide to affected institutions subject to their supervision as they try to continue to meet the financial services needs of their communities. Learn more here.
CFPB sues student lender, investment firm for deceptive practices
The Consumer Financial Protection Bureau (CFPB) sued student lender Climb Credit, and its largest shareholder 1/0 (one zero), for deceptive practices meant to encourage students to take out loans. The companies allegedly misrepresented the quality training programs offered by their partner schools and made false claims about graduates’ hiring rates and salaries. The lawsuit alleges Climb Credit and 1/0 claimed to have vetted its partner schools for “outcomes and value” but in fact offered loans for programs that had failed the defendants’ own return-on-investment analysis or for which the company conducted no analysis. The defendants also allegedly failed to properly disclose annual percentage rates in online marketing materials and illegally hid loan origination fees in disclosures. Learn more about the case here.
OCC announces enforcement actions for October
The Office of the Comptroller of the Currency (OCC) released a list of enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with banks supervised by the OCC during the month of October. The list includes five formal agreements citing institutions for “unsafe or unsound” practices, the most notable one being charges against TD Bank for BSA/AML deficiencies, which led to a cease and desist order, an asset cap on the bank’s deposits, and a $450 million civil money penalty from the OCC. The OCC uses enforcement actions against banks to require the board of directors and management to take timely actions to correct the deficient practices or violations identified. See the full list here.
FTC Issues Annual Report to Congress on Agency’s Actions to Protect Older Adults
The Federal Trade Commission (FTC) issued its latest report to Congress on protecting older adults from fraud. The report highlighted trends based on fraud reports, and the FTC’s multipronged efforts to combat the problem through law enforcement actions, rulemaking, and outreach and education programs. The report, titled Protecting Older Consumers, 2023-2024, outlined various actions taken by the FTC-led Scams Against Older Adults Advisory Group, created as a result of the Stop Senior Scams Act of 2022. The group, which included representatives from numerous federal and state government agencies, developed guidance designed to help interrupt scams that target seniors and prepared a report highlighting what research says are the challenges to effective consumer education messaging to prevent scams. Find more details about the report here.