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The Federal Emergency Management Agency today published [89 FR 87299] a final rule revising the National Flood Insurance Program's regulations to offer NFIP policyholders who are not required to escrow their premiums and fees for flood insurance the option of paying their annual flood insurance premium in monthly installments.

The rule will become effective December 31, 2024.

FDIC FIL-77-2024, issued yesterday, describes steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas affected by the Havasupai Tribe Flooding August 22–23, 2024..

The Federal Reserve System has issued the third 2024 issue of Consumer Compliance Outlook. This issue includes articles on:

• Top Federal Reserve System Compliance Violations in 2023 Under the Flood Disaster Protection Act of 1973
• Top Federal Reserve System Compliance Violations in 2023 Under the Real Estate Settlement Procedures Act and Regulation X
• Consumer Compliance Requirements for Purchasers of Residential Mortgage Loans
• Consumer Compliance Requirements for Servicers of Purchased Mortgage Loans

The CFPB yesterday announced action against VyStar Credit Union for harming consumers through its botched rollout of a new online banking system. In May 2022, VyStar transitioned to a new, dysfunctional online banking platform that made it difficult for credit union members to perform basic banking functions for weeks, with some features unavailable for more than six months. Families incurred fees and costs as a result of these problems. The CFPB is ordering VyStar to ensure that all consumers are made whole. VyStar must also pay a $1.5 million civil penalty to the CFPB’s victims relief fund.

VyStar, formerly known as JAX Navy Federal Credit Union, is a Florida state-chartered credit union headquartered in Jacksonville with 70 branches in Florida and 10 branches in Georgia. VyStar is one of the largest credit unions in the country, with approximately $14.75 billion in total assets and over 980,000 members. In May 2022, VyStar attempted to launch a new virtual banking platform. VyStar anticipated banking services would be inaccessible for several days during the transition to the new platform, but it turned out to be much longer. The new system crashed upon launch because VyStar brought it online prematurely and failed to establish or follow critical processes to ensure its success. The platform was taken offline soon after launch. Upon bringing the system back online, the new platform lacked key banking services, some of which were not restored for months.

For further details, see “VyStar CU pays $1.5M for botched systems upgrades” in BankersOnline’s Penalties pages.

• NCUA Chairman Harper and Board Member Otsuka Statements on CFPB's VyStar Credit Union action

A CFPB blog article reports that the Bureau, through JND Legal Administration, has begun distributing refund checks to over 250,000 consumer harmed by leasing company Tempoe, LLC. Tempoe offered point-of-sale financing at major retailers, including Sears and Kmart. The CFPB took action against the company for tricking customers into expensive leasing agreements by hiding the contract terms and costs. Tempoe’s practices left hundreds of thousands of customers on the hook to pay for merchandise they couldn’t afford or return. Tempoe generated approximately $192 million in revenues from about 325,000 consumers from its unlawful conduct.

As a result of the CFPB’s enforcement action, Tempoe was permanently banned from offering consumer leases. They were also required to close any existing lease agreements and release customers from making any further payments on their leased merchandise.

The Federal Trade Commission reports it is sending more than $1 million in refunds to consumers who were allegedly harmed by Rhinelander Auto Center’s junk fees and discriminatory practices.

The FTC and State of Wisconsin took action against Rhinelander Auto and its general manager in 2023, alleging that they regularly charged many customers junk fees for “add-on” products or services without the customer’s consent. The defendants also discriminated against American Indian customers in the cost of financing by adding more “markup” to their interest rates, according to the complaint.

The FTC is sending checks to 7,531 consumers.

The Federal Housing Finance Agency has reported that U.S. house prices rose 0.3 percent in August, according to the FHFA seasonally adjusted monthly House Price Index (HPI). House prices rose 4.2 percent from August 2023 to August 2024. The previously reported 0.1 percent price increase in July was revised upward to 0.2 percent.

For the nine census divisions, seasonally adjusted monthly price changes from July 2024 to August 2024 ranged from -0.1 percent in the East North Central and New England divisions to +0.9 percent in the West North Central division. The 12-month changes were all positive, ranging from +2.4 percent in the West South-Central division to +6.3 percent in the East North Central division.

The Federal Housing Finance Agency has announced updates to several Fannie Mae and Freddie Mac (the Enterprises) policies that are intended to enhance efficiencies and promote cost savings in the single-family mortgage market. These policy updates are the result of engagement with public- and private-sector stakeholders and cover four key policy areas:

• Expanded eligibility for appraisal waivers on purchase loans
• Expanded Uniform Appraisal Dataset (UAD) to include Federal Housing Administration (FHA) data
• Expanded eligibility for Freddie Mac performing loan repurchase alternative pilot
• Advance notice of certain Enterprise pricing increases

Additional information can be found in these press releases:

• Fannie Mae Appraisal Waiver press release
• Freddie Mac Appraisal Waiver press release
• Freddie Mac Performing Loan Repurchase Alternative Pilot press release
• Joint FHFA/HUD press release on expanded scope of public appraisal data

The Treasury Department has announced the release of the National Strategy for Financial Inclusion in the United States, which identifies objectives and recommendations for policymakers, industry, employers, and community organizations to advance consumer access to safe financial products and services and strengthen financial security. The Strategy was requested in 2023 by Congress and has been informed by Treasury’s research and engagement with experts, community leaders, industry representatives, and other federal agencies, including public input through a Request for Information.

Objectives and key recommendations of the Strategy include:

• Promote access to transaction accounts that meet consumer needs
• Increase access to safe and affordable credit
• Expand equitable access to savings and investments
• Improve the inclusivity of financial products and services provided or backed by the government
• Foster trust in the financial system by protecting consumers from illegal and predatory practices

Treasury invited all stakeholders to engage with this Strategy, to innovate, and to collaborate in creating a more inclusive financial landscape.

• Fact Sheet on the report and recommendations

The CFPB yesterday announced action against Apple, Inc. ("Apple") and Goldman Sachs Bank USA ("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

The CFPB is ordering Goldman Sachs to pay at least $19.8 million in redress and a $45 million civil money penalty, and Apple to pay a $25 million civil money penalty. The CFPB is also banning Goldman Sachs from launching a new credit card unless it can provide a credible plan that the product will actually comply with the law.

The CFPB also found that Apple and Goldman Sachs misled consumers about interest-free payment plans for Apple devices. Many customers thought they would automatically get interest-free monthly payments when buying Apple devices with their Apple Card. Instead, they were charged interest. In some cases, Apple did not even show the interest-free payment option on its website on certain browsers. Goldman Sachs also misled consumers about the application of some refunds, which led to consumers paying additional interest charges.

Goldman Sachs Group, Inc. (NYSE: GS), is one of the largest financial institutions in the world. It operates Goldman Sachs Bank USA, headquartered in New York City. Goldman Sachs primarily focuses on investment banking and investment management, not consumer finance. Apple Card was Goldman Sachs’s first significant experiment in credit card lending.

• Consent order against Goldman Sachs Bank USA
• Consent order against Apple, Inc.