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CFPB Takes Action on Consumer Refunds Withholding

Neobanks

Compliance Operations

May 31, 2024

The Case

The Consumer Financial Protection Bureau ("CFPB") issued a Consent Order against a San Francisco-based fintech for allegedly withholding refunds beyond the 14-day window for closed accounts established in the Company's agreement with account holders.     

Why Does This Matter?

Under the CFPB’s order, the fintech must pay at least $1.3 million in redress and over $3 million in penalties, as well as provide timely refunds going forward by implementing strict compliance controls. 

The ruling highlights the regulator’s focus on several key consumer compliance regulations: 

  • Electronic Fund Transfer Act (EFTA); 

  • Unfair, Deceptive, or Abusive Acts or Practices (UDAAP); 

  • Regulation E 

InnReg's Experience

Since its founding in 2013, InnReg has developed deep expertise in consumer compliance, including EFTA, UDAAP, and Regulation E. Whether you are a regulated entity or not, we partner with you to identify your current exposure and develop a remediation strategy. Our partnership will equip you with a tailored compliance program to help you mitigate your specific risks.

Learn More About This Topic

For additional details, read how InnReg’s Fintech Compliance checklist can help your fintech build best practices to meet evolving regulatory requirements. 

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RIAs

The SEC recently brought settled enforcement actions against two registered investment advisers for failing to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information (MNPI), in violation of Section 204A of the Investment Advisers Act of 1940 (Advisers Act) and the Compliance Rule.

RIAs

On Sep. 4, 2024, FinCEN published a final rule (Final Rule) adding certain RIAs and ERAs (collectively, Covered Advisers) to the definition of “financial institution” under the regulations implementing the BSA, and imposing on Covered Advisers broad AML and CFT program requirements, as well as other BSA recordkeeping and reporting requirements.

Broker-Dealers

On November 22, the SEC announced (here) that broker-dealers Webull Financial LLC, Lightspeed Financial Services Group LLC, and Paulson Investment Company, LLC agreed to settle charges that they filed with law enforcement SARs that failed to include required information.

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1101 Brickell Avenue
South Tower, 8th Floor
Miami, FL 33131

LinkedIn Innreg
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Quora Innreg
Blog Innreg

© 2024 InnReg LLC

1101 Brickell Avenue
South Tower, 8th Floor
Miami, FL 33131