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The California Court of Appeal recently ruled that California law treats default interest measured against the unpaid principal balance of a loan as an unenforceable penalty. In Honchariw v. FJM Private Mortgage Fund, LLC (see link), the court held that under section 1671 of the California Civil Code, a default interest charge must bear a "reasonable relationship" to the lender's actual damages from the breach to be enforceable.

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) issued a circular to affirm that neither consumer reporting companies nor information furnishers can skirt dispute investigation requirements. The circular outlines how federal and state consumer protection enforcers, including regulators and attorneys general, can bring claims against companies that fail to investigate and resolve consumer report disputes.

The Consumer Financial Protection Bureau (CFPB) on October 27, 2022 took the long-anticipated first step to issue a regulation implementing Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.¹ This followed a preview by CFPB Director Rohit Chopra at the Money 20/20 conference on October 25 in which he outlined the “CFPB’s new approach to regulation,” which is designed to create “catalysts for more competition.” With respect to Section 1033, Director Chopra said that the CFPB is “exploring safeguards to prevent excessive control or monopolization by one, or even a handful of, firms”² and will be working toward avoiding regulations that could be “rigged in favor of some players over others.”³ Director Chopra’s focus on competition as an essential element of consumer protection has been a hallmark of his directorship.⁴

Crypto-assets are increasingly offered and marketed to consumers, including being incorporated into other products. Even large financial firms have begun offering and marketing crypto-asset custodial services to certain customers. As these offerings have increased, so too have consumers’ complaints to the Consumer Financial Protection Bureau

Our markets are far different than they were the last time this committee met in person. We look forward to hearing your advice on how the FDIC can be best prepared to resolve institutions whose failure may pose risk to the stability of the financial system.