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Consumer Financial Protection Bureau (CFPB)
CFPB Finalizes Personal Financial Data Rights Rule to Boost Competition, Protect Privacy, and Give Families More Choice in Financial Services
The CFPB issued a final rule to implement the personal financial data rights established by section 1033 of the Dodd-Frank Act. The final rule requires banks, credit unions, and other financial service providers to make consumers’ data available upon request to consumers and authorized third parties in a secure and reliable manner; defines obligations for third parties accessing consumers’ data, including important privacy protections; and promotes fair, open, and inclusive industry standards.
The final rule includes a coverage threshold which exempts credit unions that hold less than the SBA size standard from the rule. Per 13 CFR 121.201, the threshold for credit unions is $850 million in assets.
Data providers must comply with the rule beginning in:
CFPB Orders Apple and Goldman Sachs to Pay Over $89 Million for Apple Card Failures
The CFPB took action against Apple and Goldman Sachs for customer service breakdowns and misrepresentations that impacted hundreds of thousands of Apple Card users. The CFPB found that Apple failed to send tens of thousands of consumer disputes of Apple Card transactions to Goldman Sachs, and when Apple did send disputes to Goldman Sachs, the bank did not follow numerous federal requirements for investigating the disputes. Apple and Goldman launched Apple Card despite third-party warnings to Goldman that the Apple Card disputes system was not ready due to technological issues. These failures meant that consumers faced long waits to get money back for disputed charges, and some had incorrect negative information added to their credit reports.
CFPB Issued Guidance on Worker Digital Tracking and Decision-Making Systems
The CFPB issued Consumer Financial Protection Circular 2024-06 to address the question of whether an employer can make employment decisions utilizing background dossiers, algorithmic scores, and other third-party consumer reports about workers without adhering to the Fair Credit Reporting Act (FCRA) requirements.
The CFPB’s opinion is that those would be similar to credit reports and scores which are often governed by the FCRA when it comes to employment decisions. Many background dossiers that are compiled from databases collecting public records, employment history, collective-bargaining activity, or other information about a worker are “consumer reports” under the FCRA. Other types of consumer reports may include, for example, reports that convey scores assessing a current worker’s risk level or performance.
Employers that use consumer reports—both initially when hiring workers and for subsequent employment purposes—must comply with FCRA obligations, including the requirement to obtain a worker’s permission to procure a consumer report, the obligation to provide notices before and upon taking adverse actions, and a prohibition on using consumer reports for purposes other than the permissible purposes described in the FCRA.
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Financial Crimes Enforcement Network (FinCEN)
FinCEN Issues Alert to Financial Institutions to Counter Financing of Hizballah and Its Terrorist Activities
FinCEN issued an alert to assist financial institutions in identifying and reporting suspicious activity supporting Lebanese Hizballah which has been designated as a Foreign Terrorist Organization. The alert provides an overview of Hizballah and the financing of the organization along with how the organization launders its illicit proceeds. In addition, the alert provides red flags that credit unions can watch for along with SAR reporting instructions.
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National Credit Union Administration (NCUA)
Board of Director Engagement in Cybersecurity Oversight
The NCUA issued Letter to Credit Unions 24-CU-02 to remind credit union board of directors and senior management to stay highly focused on managing cyber risks and ensure credit unions have necessary resources to maintain an effective cybersecurity program.
Boards should engage in ongoing education about current cybersecurity threats, trends, and best practices. The NCUA provides various resources to assist, including training webinars, web-based learning resources, and written guidance.
The letter to credit unions provides additional insight related to:
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