insideARM Weekly Recap – Week of May 20th, 2024

The ARM Industry is hard enough to keep up with during a normal week; last week (and with the CFPB in rare form) it was basically a full-time job in and of itself. That is why we on the editorial team at insideARM pride ourselves on finding only the most important news to share with our readers. Last week included two pieces on the CFPB’s recent actions, some tips on implementing AI, and a legislative update out of Minnesota. Read on and catch up on the news from last week and why we think you needed to see it!

On Monday, we brought you an FAQ from our Editor and General Counsel, Missy Meggison, on the recent Supreme Court ruling which held the CFPB's funding structure was constitutional. On May 16, 2024, SCOTUS published its opinion, and the industry immediately had a flurry of questions. The article addresses some of the most frequent questions we received, including how the SCOTUS opinion may affect operations, what the opinion means for the Late Fee Rule and other pending litigation, what we can expect from the CFPB going forward, and what the industry can do to prepare for an extremely active CFPB. These FAQs provide a good breakdown of the aftermath of this SCOTUS decision, some advice for how to react to it, and a reminder that you aren’t alone if the ruling left you asking “What now?”

Tuesday, we wanted to highlight some of the benefits of implementing Artificial Intelligence for anyone struggling to jump into the use of AI. The article points out some of the advantages like convenience for consumers, AI’s ability to work after hours, and how AI can actually help with compliance issues. These notes include questions you should be asking if you or your organization are considering implementing AI into any of your processes. When it comes to Artificial Intelligence, the word is out and, while it may face regulatory hurdles in the future, it is unlikely that any amount of regulation will put the toothpaste back in the tube. So, there is no better time than the present to at least investigate how AI could improve your organization’s efficiency.

On Wednesday we brought you another CFPB bombshell as the Bureau put out an Interpretive Rule regarding Buy Now Pay Later (BNPL) loans. The CFPB, through a press release, stated that BNPL’s are credit card providers. For lenders that fall under this new interpretation, they would now need to extend to their consumers the protections offered under TILA and Regulation Z. Some of the main responsibilities this drops on BNPL lenders are the investigation of disputes, how to handle refunds/cancelation, and the furnishing of billing statements to consumers. Though this may seem like a smaller subset of lenders, this rule from the CFPB should concern the entire industry as it is further evidence that Director Rohit Chopra intends to take the momentum from the recent SCOTUS decision and run with it, and, we can’t be sure where he is running to next.

Thursday, we reported on an update from the Minnesota legislature and their Debt Fairness Act. The bill was originally presented in February of this year and caused a stir with what would have been extreme changes to the debt collection landscape in Minnesota. The proposed language, as we discussed here, would have severely limited debt collection processes and efficiency in the state. While the bill as passed still makes some major changes, they have been toned down significantly and/or are limited to the collection of medical debt (including a definition of what constitutes “medical debt.”) This shows how impactful the industry can be when it comes together behind a single message. It is scary to think what the final language would have looked like if not for the work of industry veterans and advocacy groups.

We appreciate you reading our weekly recap! If you have more to catch up on, you can find the recap for the week of May 13th here.

You don’t need to face your compliance or collection issues alone! Click here to learn more about Research Assistant, our weekly peer group meeting, and a free 1-month trial!