State Series: Financial Consumer Protections

Unfair or Deceptive Practices

• Requirements for clear and conspicuous disclosure of the nature, purpose, and amount of fees, including “total price”, mandatory and optional fees, refund policies
• Limitations on select fees, including interchange fees (e.g., taxes, tips, charitable contribution) and ATM fees

Usury Laws; Interest Rates

• Renewed interest in the opt-out provisions available to states under the DIDMCA (Depository Institutions Deregulation and Monetary Control Act)
• Anti-evasion protections for usury laws
• Linking interest rates to floating rate formulas tied to economic indicators rather than static numbers

Debt Collection

• Expanded scope of fair debt collection practices laws to include additional types of debt (e.g., CA)

Credit Reporting

• Disclosures associated with the use of “trigger leads” derived from consumer report inquiries by mortgage companies (e.g., AR, GA)
• Prohibitions or restrictions on medical debt reporting to consumer credit reporting agencies (across multiple states, including ME and OR)

“Debanking”

• Prohibitions against financial institutions denying or canceling services based on factors such as political opinions, religious beliefs, lawful business activities or non-risk-based criteria (e.g., AZ, GA, ID, IN, IA, KY, LA, SD)

Small-Dollar Lending

• New rules on small-dollar loans, including caps on interest rates (e.g., CA)
• Buy Now, Pay Later rules enacted or updated guidance (e.g., CA, NY, MA, TX)

Use of AI

• Restrictions on use of automated decision-making tools/systems for lending practices (e.g., RI, NY)

Novel Products and Services

• Characterizing certain non-credit products as loans, such as fees associated with earned wage access products determined to be interest; buy-now-pay-later products; lease to own arrangements; loans disguised as purchase of future revenues (e.g., NY, DC)

Elder Fraud

• Investigating and coordinating cross-agency efforts to prevent financial exploitation of seniors, including fraud and scams (e.g., VA, CT)

Algorithmic Bias

• Applying existing consumer protection authorities (federal and state) to enforce anti-bias/fair lending laws when decision are made using AI, automated decision-making or other advanced technologies, especially with regard to lending and pricing of products and services (e.g., CA, NJ, MA)

Multi-State; State-Federal Coordination

• Coordinating with other states and/or federal agencies (e.g., FTC, DOJ) to address consumer protection issues, such as:
  • VA/DOJ Task Force to investigate allegations of debanking
  • Multi-state Consortium to collaborate and unify privacy enforcement
  • 50-state participation in Anti-Robocall Litigation Task Force
  • 23-state coalition to oppose CFPB defunding or dismantling