Cross-Border Crosswalk: an Overview of Canadian and US Banking and Consumer Financial Services Regulators

Journal of Financial Compliance Volume 4 Number 1

Cross-border crosswalk: An overview of Canadian and US banking and consumer financial services regulators Received (in revised form) 11th June, 2020 Suhuyini Abudulai* Partner, Cassels Brock & Blackwell LLP, Canada Suhuyini Abudulai Xiaoling Ang** Associate Director, NERA Economic Consulting, USA Eric Goldberg† Partner, Akerman LLP, USA Thomas Kearney‡ Partner, Akerman LLP, USA

Suhuyini Abudulai is a partner at Cassels Brock general actions, class certification and damages & Blackwell LLP. Suhuyini’s practice focuses on analysis, policy evaluation, cost-benefit anal- Dr Xiaoling Ang transactional and regulatory matters in financial ysis and fair lending analysis. Xiaoling has tes- services, with particular expertise in Canadian tified and submitted affidavit and expert report consumer protection laws. She regularly advises testimony in US federal proceedings and has clients on the regulation of financial services advised clients on consumer financial services and consumer finance in Canada including doc- compliance issues, including annual percent- umentation, licensing and disclosure require- age rate (APR) and amortisation schedule cal- ments. On the transactional side, Suhuyini culations. Her antitrust-related work includes advises clients on commercial lending matters, matters related to fixed-income securities and acting for lenders and borrowers in domestic insurance as well as consumer packaged goods and multijurisdictional transactions. Suhuyini and electronic components. Prior to working in has authored several publications, including the economic consulting, Xiaoling was one of the Eric Goldberg Annotated Ontario Consumer Protection Act. original economists at the Consumer Financial Among other professional experience, Suhuyini Protection Bureau (CFPB). At the CFPB, holds leadership positions with the American Xiaoling frequently served as the Lead Econ- Bar Association and the Ontario Bar Associa- omist on Bureau initiatives and rulemakings. tion (OBA) including Chair of the Consumer Law Before joining the CFPB, she was a Financial Committee of the OBA’s Business Law Section. Economist at the Federal Deposit Insurance She is ranked in the ILFR1000 (financial services Corporation. Xiaoling’s work has been pub- regulatory and banking). lished in law and economic journals, and she has presented her research at academic and Dr Xiaoling Ang is an Associate Director special- industry conferences. Her academic research Thomas Kearney ising in consumer financial services, consumer includes work on student and mortgage lend- protection, antitrust and labour economics. She ing, as it relates to behavioural economics, chiefly directs matters in the consumer financial pass through and bankruptcy. She has been services, banking, insurance and finance indus- awarded various national fellowships, includ-

Journal of Financial Compliance tries. Xiaoling focuses on applying rigorous ing the National Science Foundation Graduate Vol. 4, No. 2 2020–21, pp. 110–125 economic and econometric methods to these Research Fellowship and the Statistics Canada © Henry Stewart Publications, 2398-8053 areas, including in regulatory and state attorney Tom Symons Research Fellowship.

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Eric Goldberg helps clients tackle regula- involved in the CFPB’s TILA-RESPA Integrated tory compliance issues that arise in consumer Disclosure (Know Before You Owe) rulemak- finance with a particular focus on payments ing and the Ability-to-Repay and Qualified and FinTech issues. Previously, Eric was Man- Mortgage rulemakings. aging Counsel for Regulations at the Consumer Financial Protection Bureau (CFPB) where he Abstract led the Agency’s payments regulatory work. At Canada and the United States are neighbours, each Akerman, Eric evaluates federal and state reg- with its own ‘alphabet soup’ of banking and con- ulatory issues that arise for providers of prepaid sumer financial services regulators. Many institu- accounts, money transmission services, credit tions in each country are under the purview of both cards and other lending products, earned wage federal and state/provincial regulators, and some access services and on FinTech products, such institutions may be supervised by multiple finan- as those involving virtual currency, blockchain cial regulators. For businesses engaged in financial and consumer data aggregation. Eric evaluates services on either side of the border, it is important unfair, deceptive and abusive acts and practices to understand which agencies regulate the products (UDAAP) risk and counsels clients on issues and services they offer and how agencies policies arising under the federal consumer finance laws, change over time.1 Understanding how local regu- the Dodd–Frank and Federal Trade Commis- latory environments differ should inform business *Cassels Brock & Blackwell, sion (FTC) Acts, Bank Secrecy Act / Anti-money decisions. For example: 2100 Scotia Plaza, Laundering (BSA/AML) and state licensing con- 40 King Street West, sumer protection laws. While at the CFPB, Eric ●● There may be costs associated with expanding Toronto, ON, Canada led rulemakings on prepaid accounts and remit- to a new jurisdiction as there are likely different M5H 3C2 Tel: +1 416 642 7452; tance transfers and was involved in the Agen- compliance requirements. E-mail: sabudulai@cassels. cy’s innovation activities. Eric is a frequent writer ●● A product that is viable in one area may be com and speaker on consumer finance issues includ- untenable in another due to differing regulations **NERA Economic ing on regulators’ innovation and sandbox (eg varying usury limits). Consulting, initiatives. ●● Litigation risk may differ between jurisdic- 1255 23rd St NW, tions: various US regulators can file lawsuits Suite 600, in federal court whereas Canadian regulators Washington, DC 20037, Thomas Kearney helps lenders, technology USA companies and other financial services pro- often have supervisory and regulatory powers Tel: +1 202 466 9259; viders navigate issues arising under finan- that do not include prosecution. US compa- E-mail: lingling.ang@ nera.com cial services laws. Thomas works with clients nies are also often able to insulate themselves to operationalise state and federal laws and from class action liability through the oper- †Akerman, regulations, ranging from implementing the ation of arbitration clauses and class action The Victor Building, waivers. 750 Ninth Street, recent Home Mortgage Disclosure Act (HMDA) N.W., Suite 750, ●● amendments to assessing programme com- Companies seeking to do business in both the Washington, DC 20001, pliance with information privacy, data breach United States and Canada should consider USA Tel: +1 202 824 1761; and cybersecurity requirements. He counsels engaging legal and expert teams during product development to harmonise where possible. Addi- E-mail: eric.goldberg@ FinTechs, RegTechs and vendors on develop- akerman.com ing and maintaining compliant technology and tionally, when facing regulatory scrutiny or liti- ‡ data systems. Thomas joined Akerman from the gation, similar harmonisation may be beneficial Akerman, as well. The Victor Building, Consumer Financial Protection Bureau’s (CFPB) 750 Ninth Street, N.W., Office of Regulations, where he played a key role Suite 750, Washington, developing and drafting multiple mortgage orig- Navigating the oversight of each agency is nuanced DC 20001, within each country, and one’s knowledge, experi- USA inations related rulemakings. He led the team Tel: +1 202 824 1777; responsible for the Home Mortgage Disclo- ence and jargon are often specific to their area of E-mail: thomas.kearney@ sure Act rulemakings. He was also substantially expertise. Regulated entities’ incentives may differ akerman.com

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due to differences in regulation or licensing require- The Bank of Canada, Canada’s national ments. Engaging with and retaining expertise (eg bank, is responsible for the Canadian finan- staff, counsel or external experts) in one country cial system, developing and implementing who have the tools and language to work with peo- monetary policy, designing, issuing and ple in another can be valuable. To help with that, distributing Canadian currency and, as the this paper provides an overview of the legal frame- fiscal agent of the federal government, man- work, financial services landscape and key regula- aging the public debt and foreign exchange tors in Canada and the United States. reserves.11 At the provincial and territorial levels, there are consumer affairs offices Keywords: Canada, United States, regu- (with oversight over provincial and territo- lation, banking, consumer finance, con- rial consumer protection laws),12 regulatory sumer protection, FinTech, compliance authorities who regulate credit unions and caisse populaires (cooperative, member-owned LEGAL FRAMEWORK IN CANADA AND financial institutions), securities commis- THE UNITED STATES sions and insurance regulators.13 Canada has a parliamentary system of govern- The United States, like Canada, employs ment, comprised of ten provinces and three a legal system based on English common territories.2 All provinces (except Québec) law, with the exception of Louisiana, which and each territory have an English common follows a civil law system.14 Consumer pro- law legal system.3 Québec has a civil law tection laws are generally enacted at both the system based on the Napoleonic Code.4 The federal and state levels,15 although a few US legal framework for the financial services municipalities have laws regulating certain regulation in Canada involves a mix of laws types of financial services.16 Many US fed- and voluntary arrangements.5 In particular, eral financial services laws are implemented consumer protection laws are enacted at the by, or supplemented with, regulations federal, provincial and territorial levels.6 The issued by a federal agency that provide Canadian federal government has enacted more details on the scope and requirements various laws that regulate federally regulated of the statute.17 Businesses subject to these entities and a variety of consumer protec- laws must review both the statute and the tion matters, including matters related to related regulation to fully understand their anticompetitive practices, payments, bank- obligations. Both state and federal laws can ing, prepaid payment products, packaging require certain disclosures, restriction on and labelling and privacy.7 At the provincial terms and conditions, and regulate adver- and territorial levels, laws have been enacted tising and other practices.18 Licensing and that govern matters such as gift cards, loyalty registration of non-bank financial services programmes, misleading or deceptive repre- providers — specifically consumer finance sentations, consumer credit, documentation lenders, mortgage companies, debt collec- requirements in consumer transactions and tors and money transmitters — are generally consumer warranties.8 handled exclusively by the states. Obtaining In Canada, there is a shared responsibil- licenses can be a costly undertaking for enti- ity of regulation of the Canadian financial ties seeking to do business in all 50 states and system.9 Federal financial regulators include the District of Columbia, although recently the Department of Finance, the Office of some regulators have taken some steps the Superintendent of Financial Institu- to streamline some licensing processes.19 tions (OSFI), the Canada Deposit Insurance Licenses are subject to certain reporting and Corporation (CDIC) and the Financial examination requirements, as well. Many Consumer Agency of Canada (FCAC).10 states have usury caps on consumer credit

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product and some states may ban certain pursue joint federal and state actions against products, such as payday loans, altogether.20 individuals engaging in unfair or deceptive In the United States, financial regulatory practices,30 The CFPB shares supervisory oversight is split between regulators at the authority over certain depository insti- federal and state levels, and then further split tutions with state and federal prudential based on the type of entity, transaction or regulators.31 Nonbank providers are also activity. 21 The federal regulators overseeing potentially subject to the authority of state depository institutions are the Office of the regulators and attorneys general, the FTC Comptroller of the Currency (OCC), the and the CFPB. Similarly, money transmit- Federal Reserve System (Federal Reserve), ters must comply with both state licensing the Federal Deposit Insurance Corporation requirements and federal regulations from (FDIC) and the National Credit Union Asso- CFPB and FinCEN.32 ciation (NCUA); a depository institution’s charter determines its regulator.22 Compa- rable state regulators exist with oversight of FINANCIAL SERVICES LANDSCAPE state-chartered depository institutions. In light of the roles of both national and The Consumer Financial Protection subnational (ie state, provincial or territo- Bureau (CFPB) has authority over most fed- rial) financial services regulation, a helpful eral laws concerning consumer credit. CFPB metric for thinking about the coverage of also have supervisory and enforcement a set of regulations is population. Although authority over many bank and nonbank pro- the total population of Canada was 11.3 viders of these products.23 The Federal Trade per cent that of the United States as of 1st Commission’s (FTC) jurisdiction is broad, July, 2017, 33 Canada’s largest provinces have covering nonbank activity ranging from populations comparable to large US states. anticompetitive practices to data privacy For example, Ontario, the largest Canadian and unfair and deceptive acts and practices.24 province, has a population of 14.2 million, The US Department of Treasury’s Financial which is larger than the population of Penn- Crimes Enforcement Network (FinCEN) sylvania (12.8 million), the fifth largest US oversees the entire US financial system to state.34 The three largest provinces, which monitor and protect against money launder- combined account for 74.7 per cent of the ing, terrorist financing and similar financial population of Canada, each have larger pop- crimes.25 The US Department of Justice,26 ulations than the median US state.35 Department of Housing and Urban Devel- In comparison to the United States, opment27 and Department of Defense28 and commercial banking in Canada has been other federal agencies also monitor and described as stable36 and concentrated or enforce various aspects of financial services highly concentrated, with over 90 per cent laws. In addition, each of the 50 states, the of all banking assets held by the largest District of Columbia, US territories and six banks.37 The ‘Big Six’ banks (Bank of many federally recognised Indian tribes Montreal, the Bank of Nova Scotia, Cana- have one or more agencies tasked with dian Imperial Bank of Commerce, National monitoring, regulating, and, in most states, Bank of Canada, Royal Bank of Canada licensing certain types of financial services and the Toronto-Dominion Bank) are des- providers.29 ignated domestically systemically important Regulatory, supervisory and enforcement banks by OSFI.38 There are considerably authority is often shared with another reg- fewer banks in Canada than the United ulator or government agency. For example, States. As of the date of this paper, includ- the FTC and state attorneys general often ing the Big Six, there are 37 domestic banks

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and 19 foreign bank subsidiaries operating consumers of their rights and responsibilities in Canada39 compared to the 4,952 domes- when dealing with FRFIs and obligations tic commercial banks and 204 foreign bank of payment card network operators to con- subsidiaries operating in the United States as sumers and merchants; monitor and evaluate of 31st December, 2017.40 In the fourth quar- trends and emerging issues that impact con- ter of 2017, there were 272 credit unions or sumers of financial products and services; caisses populaires in Canada41 and 5,573 credit and promote financial literacy and protec- unions in the United States.42 tion of consumers of financial services and Canadian and American consumers uti- products.49 lise select financial services at rates higher The FCAC is led by a Commissioner, than the aggregate level for Organisation for appointed by the federal government,50 with Economic Co-operation and Development a variety of responsibilities including provid- (OECD) countries, including credit cards ing annual reports to the federal government and housing loans.43 In addition, utilisation on the FCAC’s initiatives and activities of rates for Canadians for formal financial ser- the prior year and the compliance of FRFIs vices are higher than Americans in various with consumer protection measures.51 categories: 99.7 per cent of Canadians aged The FCAC has a risk-based supervi- 15 or over hold accounts at formal finan- sory model of enforcement52 and a range cial institutions, compared to 93.1 per cent of administrative and enforcement powers of Americans.44 Canada also has higher that include monetary penalties and crim- debit, credit card, and digital payment util- inal sanctions.53 The FCAC Commissioner isation rates than the United States — 96.8 has authority to issue notices of violation to per cent and 80.2 per cent, respectively, for FRFIs that do not comply with their legis- debit cards, 82.6 per cent and 65.6 per cent, lative obligations and has the discretion to respectively for credit cards and 97.9 per cent disclose the violation to the public and select and 91.1 per cent for digital payments.45 In a monetary penalty of up to CA$500,000.54 addition, in a cross-country comparison of In early 2018, the FCAC established the payment methods utilisation, Canadians and Consumer Protection Advisory Commit- Americans were the only countries that rou- tee (CPAC) to support the FCAC’s mandate. tinely use credit for small transactions46 and The CPAC is comprised of members of the were more likely to use credit than Europe- private, nonprofit and academic sectors. ans for larger transactions.47 The CPAC provides guidance and advice to the FCAC by informing policy development and the FCAC’s supervision role in respect of CANADIAN REGULATORS financial consumer protection in Canada.55 Financial Consumer Agency of Canada Canada’s federal consumer agency, the Office of the Superintendent of Financial FCAC, monitors and supervises federally Institutions regulated financial institutions (FRFIs), The OSFI is an independent federal govern- which include banks, federal credit unions ment agency that regulates and supervises and federally incorporated or registered FRFIs and federally regulated private pen- insurance, trust and loan companies.48 sion plans. OSFI plays a significant oversight The FCAC is mandated under federal law role in respect of FRFIs and, among other to, inter alia, ensure FRFIs comply with responsibilities, OSFI interprets legisla- consumer protection provisions of federal tion and regulation, develops rules, ensures legislation, regulations, voluntary codes of FRFIs are meeting requirements and are conduct and public commitments; inform in sound financial condition, and provides

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regulatory approvals for certain matters (eg Bureau has investigative powers, it does not formation of a bank in Canada). OSFI does prosecute competition offences; the Public not regulate consumer-related matters or Prosecution Service of Canada prosecutes the securities sector.56 those offences.63 The Superintendent of Financial Institu- Anticompetitive practices, such as false tions heads the OSFI and has various powers or misleading representations, exclusive and responsibilities designated by various dealing, tied selling and deceptive mar- federal laws. The Superintendent reports to keting practices, are investigated by the the federal government on matters related Competition Bureau.64 The compliance and to OSFI’s administration and supervision of enforcement tools available to the Com- federal laws applicable to FRFIs.57 petition Bureau include written opinions, written undertakings, the power of search Competition bureau and seizure, the power to refer criminal The Competition Bureau is a federal inde- matters for prosecution, the authority to pendent law enforcement agency that bring civil matters before the Competition ensures the Canadian marketplace operates Tribunal or other courts, and the authority in a competitive and innovative manner. to intervene on matters of competition pol- The Competition Bureau is responsible for icy before federal or provincial or territorial the administration and enforcement of Can- governmental authorities.65 The Compe- ada’s federal Competition Act and federal tition Bureau may also offer immunity or legislation governing consumer packag- leniency for certain offences.66 ing and labelling, textile labelling, and marking of precious metals and articles.58 Financial transactions and reports analysis The Competition Bureau also works with centre of Canada other regulatory authorities in Canada and Canada’s financial intelligence unit, the has partnered with various authorities to Financial Transactions and Reports Analy- issue formal agreements and memoranda of sis Centre of Canada (FINTRAC), mandate understanding.59 is to facilitate the detection, prevention and The Commissioner of Competition heads deterrence of money laundering and ter- the Competition Bureau and administers rorist financing activities.67 The Director and enforces the Competition Act, which of FINTRAC heads the organisation68 and prohibits various anticompetitive conduct, the federal Minister of Finance has statutory including cartels, multilevel marketing, pyr- power and oversight over FINTRAC.69 amid schemes and deceptive prize notices.60 FINTRAC advises the Canadian gov- The Commissioner has oversight over the ernment about the nature and scope of administrative branches of the Competi- money laundering in Canada and any new tion Bureau, which address matters, such as or emerging trends that may require legisla- mergers and monopolistic practices, cartels tive amendment. FINTRAC also has a role and deceptive marketing practices, competi- in informing and educating the public in its tion promotion and corporate services.61 role and mandate, as well as on the extent of The Competition Tribunal is an indepen- money laundering in Canada. FINTRAC dent adjudicative body that hears a variety collects reports and voluntary information, of matters, such as trade practices, deceptive monitors compliance by ‘reporting entities’ marketing practices, business mergers and with Canada’s federal Proceeds of Crime foreign judgments, laws or directives that (Money Laundering) and Terrorist Financ- have an adverse impact on Canadian eco- ing Act (PCMLTFA) and its regulations, and nomic activity.62 While the Competition provides financial intelligence to a number of

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law enforcement and intelligence agencies.70 PIPEDA will apply.76 Currently, Alberta, Reporting entities are entities prescribed in British Columbia and Québec have substan- Part 1 of the PCMLTFA that are subject to tially similar private-sector privacy laws.77 reporting, record keeping and compliance Each province and territory has public requirements. These entities include banks, sector privacy laws that apply to provincial casinos and money services businesses.71 and territorial government agencies. Most FINTRAC is specifically directed to Canadian jurisdictions also have health receive reports under the PCMLTFA and privacy laws, employment-related privacy any information about suspicious transac- laws and laws governing consumer credit tions and suspicious attempted transactions reporting.78 provided to FINTRAC voluntarily, to The Office of the Privacy Commissioner collect the information it considers rele- (the OPC) of Canada is Canada’s national vant from other reports and public sources, regulator and enforces Canada’s federal pri- and to analyse and assess the reports and vacy laws. The OPC oversees compliance information.72 with PIPEDA, investigates complaints, per- To facilitate and support compliance with forms audits, pursues legal action, provides the legislative and regulatory requirements, legal opinions or analysis, provides public FINTRAC issues guidelines with expla- reports on personal information-handling nations and guidance for compliance. The practices of organisations, and promotes guidelines do not have the force of law and public awareness of privacy laws and issues.79 focus on assisting reporting entities and If the OPC receives a complaint alleging individuals in understanding their obli- a breach by a business or federal organisa- gations under the PCMLTFA and its tion of PIPEDA, the OPC will investigate regulations.73 FINTRAC also issues inter- the complaints and may audit the practices pretation notices and policy interpretations of the organisation (and has discretion to on occasion, to provide a better under- publicise the results of the audit public).80 standing of how the PCMLTFA and its The OPC publishes selected findings on regulations are administered.74 its website.81 With respect to federal government organisations, the OPC is subject Office of the Privacy Commissioner of to confidentiality obligations and can only Canada publicise its findings from investigations of In Canada, privacy laws govern the private, such organisations in limited circum- public and health care sectors and are a mix stances.82 Complaints reviewed may be of federal and provincial/territorial laws. referred to federal court, which has the Canada has two federal privacy laws, the authority to award damages for breach of Personal Information Protection and Elec- PIPEDA.83 tronic Documents Act (PIPEDA), which Audits of federal organisations and busi- governs private sector organisations and nesses in the private sector subject to Canada’s their collection, use and retention of personal federal privacy laws may be performed by information, and the Privacy Act, which the OPC to verify personal information is governs the personal information-handling being managed in compliance with privacy practices of federally regulated organisa- law requirements.84 Audits include a review tions.75 PIPEDA generally does not apply of security controls, policies, procedures to provinces in Canada that have their own and practices.85 The Privacy Commissioner substantially similar private-sector privacy of Canada is directed to review the protec- laws; if the personal information data, how- tion of information received by FINTRAC ever, crosses provincial or national borders, and to submit the Privacy Commissioner’s

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report to Canada’s federal government, conduct, solvency and financial soundness of every year.86 insurance companies incorporated in their respective jurisdictions and issue licenses PROVINCIAL AND TERRITORIAL to such companies.94 Similar to the secu- REGULATORS rities regulators, the insurance regulators Each province and territory of Canada have formed a national organisation, the has a regulatory body with oversight over, Canadian Insurance Services Regulatory inter alia, consumer protection laws in their Organizations, to collaborate and harmon- respective jurisdiction and the regulation of ise practices.95 financial institutions under provincial and territorial responsibility.87 US REGULATORS Consumer matters are addressed by pro- The United States has a dual banking sys- vincial and territorial regulators, including tem, meaning an entity may obtain a federal matters related to contracts, memberships, banking charter subjected to federal supervi- collection agencies, credit/consumer report- sion, or a state banking charter subjected to ing, cost of credit disclosure, loyalty state supervision.96 Banks may — and often programmes, the purchase and sale of goods do — convert from state to federal char- and services, advertising, rental/lease ters and vice versa.97 Depository institutions agreements and automotive repairs.88 The must generally comply with both state and regulators promote consumer rights, inves- federal law regardless of whether they are tigate complaints and enforce a variety of state or federally chartered, although some provincial and territorial consumer pro- state banking laws are pre-empted by federal tection laws.89 Certain businesses must be law.98 An entity must also decide what type licensed to operate in Canadian jurisdic- of depository institution it wants to become tions, such as consumer-reporting agencies, as separate charters exist for banks, sav- collection agencies, payday lenders and ings banks, savings associations and credit door-to-door sellers.90 unions.99 Each of the Canadian provinces and Different agencies have jurisdiction over territories has a securities regulator that different types of depository institutions. administers and enforces compliance with The Federal Reserve regulates state- securities laws in their respective juris- chartered banks that have elected to become diction.91 Canada does not have a national members of the Federal Reserve System, as securities regulator; the securities regula- well as bank holding companies and sev- tors in the Canadian jurisdictions, however, eral other types of financial institutions.100 formed the Canadian Securities Adminis- The FDIC regulates state banks that are trators to work collaboratively in an effort not members of the Federal Reserve.101 to harmonise practices.92 As with many The OCC has jurisdiction over national other provincial and territorial govern- banks and federal savings associations.102 mental authorities, the regulators also work The NCUA regulates federally chartered with federal departments and agencies and credit unions.103 And each state, territory law enforcement. A recent Supreme Court and the District of Columbia has a bank- of Canada decision has cleared the path for ing regulator responsible for chartering and a national securities regulator in Canada, supervising banks, savings associations and recognising an effort to establish such a reg- credit unions.104 These regulators are collec- ulator in Canada for the last 30 decades.93 tively called ‘prudential’ regulators because Provincial and territorial insurance reg- their primary focus is the safety and sound- ulators regulate insurance products, market ness of the banking system.

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It is helpful for all financial services provid- The CFPB’s purview is expansive; it reg- ers to be familiar with prudential regulators, ulates bank and nonbank providers of 11 even if their business is not a depository different categories of products and services institution, because of overlapping issues ranging from all manners of credit, banking and regulatory concerns. Prudential regula- and payment products as well as debt col- tors expect depository institutions to obtain lectors, real estate settlement services, check services from compliant third-party vendors cashing and financial advisory services.110 and monitor their performance.105 In recent CFPB has three primary regulatory years, financial technology (FinTech) com- mandates. The first is to implement fed- panies have increasingly sought to partner eral consumer finance laws by developing with depository institutions to provide con- rules and guidance to explain the contours sumers access to new products and services of the laws it is implementing.111 Most of and to utilise a bank’s charter to, for exam- these laws, including the Truth in Lending ple, offer lending products exempt from state Act,112 which mandates certain disclosures usury laws, engage in money transmission for credit products, and the Electronic Fund exempt from state licensing laws or issue Transfer Act (EFTA),113 which provides pro- payment cards.106 As partnerships between tections for consumers engaged in electronic depository institutions and nonbanks have payments, were previously implemented increased, prudential regulators have empha- by the CFPB’s predecessor agencies. (Both sised the need for depository institutions to TILA and EFTA were implemented by be accountable for the actions of their non- the Federal Reserve.)114 Other key laws the bank partners. Thus, FinTech companies CFPB inherited include laws regulating fair must be prepared not only to comply with lending (Equal Credit Opportunity Act),115 all applicable laws and regulations, but also debt collection (Fair Debt Collection Prac- to comprehensively demonstrate compli- tices Act),116 credit reporting (Fair Credit ance to their banking partners and provide Reporting Act),117 and real estate transac- needed support during examinations and tions (Real Estate Settlement Procedures other regulatory inquiries.107 Understand- Act).118 All told, the CFPB implements 19 ing the expectations of the bank or credit different consumer finance laws.119 CFPB union’s prudential regulator will help ensure also has authority to adopt new regulations a successful partnership. to prevent conduct it deems unfair, deceptive or abusive.120 The CFPB has sought to CONSUMER FINANCIAL PROTECTION use this authority to regulate providers of BUREAU payday, instalment and auto title loans121 Prior to 2011, prudential regulators were and has proposed the same with respect to responsible for both safety and soundness debt collectors.122 Most recently, the CFPB and consumer protection.108 As part of the issued a policy statement articulating the reforms enacted in response to the financial process by which it would find conduct to crisis in the Dodd–Frank Wall Street Reform be abusive.123 and Consumer Protection Act, Congress The CFPB also conducts supervisory created the CFPB by both transferring juris- examinations of many of the entities it reg- diction over consumer protection regulation ulates. Specifically, the CFPB can examine from other regulatory agencies to the CFPB all banks and credit unions with greater than and also giving the CFPB powers that other US$10bn in assets and nonbank mortgage regulators lacked (although prudential regu- originators and servicers, payday lenders, lators retain authority to enforce these laws and private student lenders of all sizes.124 The with respect to the entities they supervise).109 CFPB also has adopted rules permitting it to

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supervise larger nonbank participants in the to safeguard consumers’ sensitive data.131 In consumer reporting, debt collection, student addition, the FTC has authority to develop loan servicing, international money transfer regulations and enforce violations of a and automobile financing markets.125 The number of other laws that impact financial CFPB’s onsite supervisory examinations services including electronic fund transfers have three goals: (1) to assess compliance (Electronic Fund Transfer Act132) and credit with Federal consumer financial laws, (2) repair activities (the Credit Repair Organi- to obtain information about activities and zations Act133). Like the CFPB, the FTC has compliance systems or procedures and (3) regulatory and enforcement authority. The to detect and assess risks to consumers and FTC, however, does not have supervisory to markets for consumer financial products authority.134 Additionally, the FTC, through and services.126 While CFPB examination its Bureau of Competition, also has authority results are not public, the CFPB periodically to enforce federal antitrust laws. The FTC releases ‘Supervisory Highlights’ explaining shares this authority with the US Depart- some items CFPB examiners found con- ment of Justice (DOJ). The FTC reviews cerning during recent exams. In addition to proposed mergers to see if they violate the supervisory authority, the CFPB can bring federal antitrust laws and also investigates enforcement lawsuits against banks with and pursues civil antitrust violations.135 greater than US$10bn in assets and most nonbank providers of consumer financial Other US Federal Agencies products and services that violate one of Other agencies in the United States’ federal the 19 consumer finance laws or engage in government also play a role in the regulation practices the CFPB deems unfair, decep- of financial services. The DOJ files criminal tive or abusive.127 These actions are public, and civil lawsuits against those that violate and either are filed in federal court or the many federal laws; it has overlapping jurisdic- CFPB’s own administrative court. tion with many the other federal regulators discussed in this paper. For example, DOJ Federal Trade Commission enforces US civil rights laws that apply to The CFPB is not the only federal consumer financial services including the Fair Hous- protection regulator. The FTC imple- ing Act and ECOA.136 DOJ can also pursue ments the FTC Act which, among other criminal violations of anti-money laun- things, allows it to stop unfair, deceptive dering and terrorist financing laws (eg the or fraudulent practices in the consumer PATRIOT Act137 and Bank Secrecy Act138) finance marketplace through its Bureau of and it can bring suit for fraudulent activi- Consumer Protection.128 The FTC has juris- ties involving the United States government diction over nonbank providers of financial including bank and mortgage fraud.139 The services except that it lacks jurisdiction over US Department of Housing and Urban federally chartered banks.129 The FTC has Development (HUD) implements many ‘concurrent’ jurisdiction with the CFPB to aspects of federal housing policy, including pursue unfair and deceptive acts and practices the Fair Housing Act and other forms of and FCRA violations.130 In recent years, the housing discrimination.140 The Department FTC has taken a particular interest in data of Defense implements the Military Lending privacy and data security issues, including Act, which imposes consumer protections in implementing the Gramm–Leach–Bliley on most nonmortgage loan products offered Act, which requires certain financial services to service members and their families.141 companies that have ongoing customer rela- The Department of Education offers gov- tionships to explain information sharing and ernment-backed student loans to students

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pursuing higher education and also regu- law; states typically cannot loosen federal lates certain banking activities on college requirements.152 States, through their finan- campuses.142 cial regulators or their attorneys general, also can file suit on behalf of their residents US State Authorities for violations of state laws.153 As noted earlier, each state and the Dis- trict of Columbia (as well as US territories such as Puerto Rico, the US Virgin Island References and Notes (1) See, eg, Abudulai, S., Ang, X., Goldberg, E. and Guam) also regulates certain financial and Kearney, T. (2020) ‘Regulation across the services providers that offer products and border: Developments in Canadian and U.S. services in their jurisdiction. In most cases, consumer financial services’, The Business Lawyer, states do not have the ability to regulate fed- Vol. 75, Spring, pp. 1949–1956, available at: https://www.nera.com/content/dam/nera/ erally chartered banks and credit unions, publications/2020/2020%20-%20AT%20-%20 although they do charter state banks and Regulation%20Across%20Borders%20Ang.pdf credit unions.143 (accessed 7th July, 2020). (2) Government of Canada, ‘Provinces and territories’, Most states require nonbanks offering cer- Last modified 25th October, 2019, available at: tain financial services to obtain and maintain https://www.canada.ca/en/intergovernmental- a license in order to do business in that par- affairs/services/provinces-territories.html (accessed 144 5th June, 2020). ticular state. Almost all states require a (3) Department of Justice Canada, ‘Where our legal license to act as a mortgage lender, money system comes from’, Last modified 16th October, transmitter and check casher.145 Some states 2017, available at: https://www.justice.gc.ca/eng/csj- also require licensure of other types of pro- sjc/just/03.html (accessed 5th June, 2020). (4) Ibid. viders including nonmortgage lenders and (5) Financial Consumer Agency of Canada Act, S.C commercial lenders.146 To obtain a license, 2001, c.9, ss 3(2)(c). providers must provide details regarding their (6) Office of Consumer Affairs (OCS), ‘Consumer protection legislation in Canada’, Last modified 4th business operations, post a bond and subject December, 2018, available at: http://www.ic.gc.ca/ themselves to periodic examinations of their eic/site/oca-bc.nsf/eng/ca02965.html#s1 (accessed conduct.147 Notably, online providers typi- 5th June, 2020). (7) Ibid. cally must be licensed in states where their (8) Ibid. customers live, even if those providers have (9) Bank of Canada, ‘Regulation of the Canadian no physical operations in particular states and financial system’, Last modified 28th February, only, for example, an online presence.148 2014, available at: https://www.bankofcanada.ca/ wp-content/uploads/2010/11/regulation_canadian_ States also may restrict the offering of financial.pdf (accessed 5th June, 2020). certain products within their state or bar (10) Ibid. providers from engaging in prohibited (11) Ibid. 149 (12) Office of Consumer Affairs (OCS), ref. 6 above. conduct. For example, many states pro- (13) Ontario Securities Commission, ‘The Canadian hibit payday lending or have usury caps financial regulatory system’, Last modified 2nd May, that block interest loans with high inter- 2019, available at: https://research.osc.gov.on.ca/ 150 globalreg/cdnreg (accessed 5th June, 2020). est rates. Most states also have consumer (14) Louisiana State University Law, ‘French Law: Home’, protection laws that prohibit other forms Last modified 19th June, 2019, available at: https:// of conduct including unfair and deceptive libguides.law.lsu.edu/c.php?g=693022&p=4910133 151 (accessed 5th June, 2020). acts and practices. While the law in this (15) Labonte, M. (2017) ‘Who regulated whom? An area is complex, states typically can impose overview of the U.S. financial regulatory framework’, requirements on providers when federal law Congressional Research Service, 17th August, pp. 18, 25, does not specifically address the issue and available at: https://fas.org/sgp/crs/misc/R44918. pdf (accessed 7th July, 2020). the state law imposes requirements stricter (16) See, eg, N.Y.C. Admin Code § 20-700, et seq. than federal law or unaddressed in federal (Consumer Protection Law); Municipal Code

Page 120 Abudulai et al.

of Chicago, § 2-25-090 (prohibiting consumer convertible virtual currencies’, 9th May, available fraud, unfair competition and deceptive practices). at: https://www.fincen.gov/resources/statutes- Federally regulated Indian tribes also may regulate regulations/guidance/application-fincens- consumer financial services. See eg The Lac Vieux regulations-certain-business-models (accessed 9th Desert Band of Lake Superior Chippewa Indians July, 2020). Tribal Financial Services Regulatory Code available (33) The U.S. population calculation is limited to the at: http://www.lvdtribal.com/tfsra.html (accessed 50 states, the District of Columbia, and Puerto 5th June, 2020). As noted below at __, some Rico. Statistics Canada, CANSIM, Table 051-0001; federal laws may pre-empt state and local laws and U.S. Census Bureau, Population Division, NST- federally-chartered banks are exempt from certain EST2017-01. state laws. (34) Ibid. (17) Komai, A. and Richardson, G. (2011) ‘A brief history (35) Ibid. of regulations regarding financial markets in the (36) Unlike the United States, Canada did not experience United States: 1789 to 2009’, NBER Working Paper a banking crisis in 2008. Laeven, L. and Valencia, No. 17443, National Bureau of Economics Research, F. (2012) ‘Systemic banking crises database: An 22nd September. update’, IMF Working Paper 12/163, p. 10, available (18) Labonte, ref. 15 above, pp. 3, 25. at: https://www.imf.org/en/Publications/WP/ (19) Ibid., p. 24. Issues/2016/12/31/Systemic-Banking-Crises- (20) Consumer Financial Protection Bureau, ‘What is a Database-An-Update-26015 (accessed 7th July, payday loan?’, Last modified 2nd June, 2017, available 2020). at: https://www.consumerfinance.gov/ask-cfpb/ (37) See, eg, Bordo, M. D., Redish, A. and Rockoff, H. what-is-a-payday-loan-en-1567/ (accessed 5th June, (2014) ‘Why didn’t Canada have a banking crisis in 2020). 2008 (or in 1930, or 1907, or . . .)?’, The Economic (21) Labonte, ref. 15 above, Table 1. History Review, Vol. 68, p. 218 and Allen, J. and (22) Ibid. Engert, W. (2007) ‘Efficiency and competition in (23) Ibid. Canadian banking’, Bank of Canada Review, p. 39, (24) Federal Trade Commission, ‘What we do’, available available at: https://www.bankofcanada.ca/wp- at: https://www.ftc.gov/about-ftc/what-we-do content/uploads/2010/06/allen-engert.pdf (accessed (accessed 5th June, 2020). 7th July, 2020). (25) Financial Crimes Enforcement Network, ‘What we (38) As of 2016. Department of Finance Canada, (2016) do’, available at: https://www.fincen.gov/what-we- ‘Supporting a strong and growing economy: do (accessed 5th June, 2020). Positioning Canada’s financial sector for the future: (26) The United States Department of Justice, A consultation document for the review of the ‘Technology and financial services section’, Last federal financial sector framework’, p. 10, available modified 31st July, 2019, available at: https://www. at: https://www.canada.ca/en/department-finance/ justice.gov/atr/about-division/tfs-section (accessed programs/consultations/2016/federal-financial- 5th June, 2020). sector-framework.html (accessed 7th July, 2020). (27) U.S. Department of Housing and Urban (39) Office of the Superintendent of Financial Development, ‘HUD’s Regulations Division’, Institutions, ‘Who we regulate’, available at: http:// available at: https://www.hud.gov/program_offices/ www.osfi-bsif.gc.ca/Eng/wt-ow/Pages/wwr-er. general_counsel/HUD-Regulations-Division aspx?sc=1&gc=1#WWRLink11 (accessed 5th June, (accessed 5th June, 2020). 2020). (28) Consumer Financial Protection Bureau, ‘What are (40) Federal Financial Institutions Examination Council my rights under the Military Lending Act?’, Last (2018) ‘Annual report 2017’, 30th March, p. 44, modified 7th October, 2016, available at: https:// available at: https://www.ffiec.gov/PDF/annrpt17. www.consumerfinance.gov/ask-cfpb/what-are-my- pdf (accessed 7th July, 2020). rights-under-the-military-lending-act-en-1783/ (41) Canadian Credit Union Association, ‘Canadian credit (accessed 5th June, 2020). union association 2017 annual report’, p. 3, available (29) Labonte, ref. 15 above, pp. 24, 25. at: https://ccua.com/resources/2017-annual-report/ (30) Federal Trade Commission, ‘The Enforcers’, available (accessed 7th July, 2020). at: https://www.ftc.gov/tips-advice/competition- (42) National Credit Union Administration (2018) guidance/guide-antitrust-laws/enforcers (accessed ‘NCUA releases Q4 2017 credit union system 5th June, 2020). performance data’, March, available at: https://www. (31) Consumer Financial Protection Bureau, ‘Non- ncua.gov/newsroom/news/2018/ncua-releases- depository institution supervision database’, Last q4-2017-credit-union-system-performance-data modified 1st August, 2011, available at: https:// (accessed 7th July, 2020). www.consumerfinance.gov/privacy/system-records- (43) Based on 2017 levels for population aged 15 or notices/non-depository-institution-supervision- older. Demirgüç-Kunt, A., Klapper, L., Singer, D., database/ (accessed 5th June, 2020). Ansar, S. and Hess, J. (2018) The Global Findex (32) FIN-2019-G001 (2019) ‘Application of FinCEN’s Database 2017: Measuring Financial Inclusion and the regulations to certain business models involving Fintech Revolution. Washington, DC: World Bank.

Page 121 An overview of Canadian and US banking and consumer financial services regulators

(44) Demirgüç-Kunt et al., ref. 43 above. (62) Competition Tribunal, ‘Mandate’, 20th March, 2020, (45) Both Canadian and American credit card utilisation available at: https://www.ct-tc.gc.ca/en/tribunal/ rates are higher than the OECD country utilisation mandate.html (accessed 5th June, 2020). level of 56.8 per cent. Demirgüç-Kunt et al., ref. 43 (63) Competition Bureau Canada, ‘Criminal above. investigations: Basic process’, 5th November, 2015, (46) Small is defined as the first quartile of transaction available at: https://www.competitionbureau.gc.ca/ values; rates of utilisation are 3 per cent for eic/site/cb-bc.nsf/eng/02443.html (accessed 5th Canadians and 6 per cent for Americans. Utilisation June, 2020). was compared across countries from surveys in (64) Competition Bureau Canada, ref. 58 above. the years listed in parentheses: Canada (2009), the (65) Competition Bureau Canada, ‘Competition United States (2012), Australia (2010), Austria (2011), compliance framework bulletin’, section 3.1.1, France (2011), Germany (2011), and the Netherlands 10th November, 2015, available at: https://www. (2011). Bagnall, J., Bounie, D., Huynh, K. P., Kosse, competitionbureau.gc.ca/eic/site/cb-bc.nsf/ A., Schmidt, T., Schuh, S. and Stix, H. (2016) eng/03982.html (accessed 7th July, 2020). ‘Consumer cash usage: A cross-country comparison (66) Ibid., section 3.1.2. with payment diary survey data’, International Journal (67) Financial Transactions and Reports Analysis of Central Banking, Vol. 12, No. 4, pp. 20–21. Centre of Canada, ‘Who we are’, Last modified (47) Ibid. 18th July, 2019, available at: https://www.fintrac- (48) Financial Consumer Agency of Canada, ‘Supervision canafe.gc.ca/fintrac-canafe/1-eng (accessed 5th June, framework’, Last modified 26th February, 2020, 2020). available at: https://www.canada.ca/en/financial- (68) Financial Transactions and Reports Analysis Centre consumer-agency/services/industry/supervision- of Canada, ‘FINTRAC’s organization’, Last modified framework.html (accessed 5th June, 2020). 18th July, 2019, available at: https://www.fintrac- (49) Financial Consumer Agency of Canada Act, SC canafe.gc.ca/about-apropos/2-eng (accessed 11th 2001, c. 9, ss 3(2). September, 2019). (50) Financial Consumer Agency of Canada Act, ss 4(1). (69) FINTRAC, ref. 67 above. (51) Financial Consumer Agency of Canada Act, ss 34(a). (70) Ibid. (52) Financial Consumer Agency of Canada, ‘Supervision (71) Proceeds of Crime (Money Laundering) and Framework’, 3.1. Terrorist Financing Act, SC 2000, c. 17, ss 5. (53) Financial Consumer Agency of Canada Act, ss (72) FINTRAC, ref. 67 above. 19(1)(b). (73) Financial Transactions and Reports Analysis Centre (54) Financial Consumer Agency of Canada Act, ss 19(2). of Canada, ‘Guidance, Last modified 18th July, 2019, (55) Financial Consumer Agency of Canada, ‘FCAC available at: https://www.fintrac-canafe.gc.ca/ Commissioner announces members of new guidance-directives/1-eng (accessed 11th September, consumer protection advisory committee’, Last 2019). modified 29th March, 2018, available at: https:// (74) Financial Transactions and Reports Analysis Centre www.canada.ca/en/financial-consumer-agency/ of Canada, ‘FINTRAC interpretation notices and news/2018/03/fcac-commissioner-announces- policy interpretations’, Last modified 18th July members-of-new-consumer-protection-advisory- 2019, available at: https://www.fintrac-canafe.gc.ca/ committee.html (accessed 5th June, 2020). guidance-directives/overview-apercu/FINS/1-eng (56) Office of the Superintendent of Financial (accessed 11th September, 2019). Institutions, ‘OSFI and the Canadian financial (75) Office of the Privacy Commissioner of Canada, system’, pp. 1–2, available at: https://www.osfi-bsif. ‘Summary of privacy laws in Canada’, Last modified gc.ca/Eng/Docs/osfi_bch.pdf (accessed 9th July, 31st January, 2018, available at: https://www. 2020). priv.gc.ca/en/privacy-topics/privacy-laws-in- (57) Ibid. canada/02_05_d_15/ (accessed 5th June, 2020). (58) Competition Bureau Canada, ‘What is the (76) Ibid. Competition Bureau?’, 25th September, 2019, (77) Ibid. available at: https://www.competitionbureau.gc.ca/ (78) Ibid. eic/site/cb-bc.nsf/eng/04296.html (accessed 5th (79) Office of the Privacy Commissioner of Canada, June, 2020). ‘How the OPC protects and promotes privacy’, Last (59) Competition Bureau Canada, ‘Agreements with modified 10th November, 2016, available at: https:// domestic partners’, 20th December, 2019, available www.priv.gc.ca/en/about-the-opc/what-we-do/ at: https://www.competitionbureau.gc.ca/eic/site/ mm/ (accessed 5th June, 2020). cb-bc.nsf/eng/h_03696.html (accessed 5th June, (80) Ibid. 2020). (81) Eg, Office of the Privacy Commissioner of Canada, (60) Competition Bureau Canada, ref. 58 above. ‘Financial transactions and reports analysis: Centre (61) Competition Bureau Canada, ‘Our structure’, of Canada’, Last modified 21st September, 2017, 18th July, 2019, available at: https://www. available at: https://www.priv.gc.ca/en/opc-actions- competitionbureau.gc.ca/eic/site/cb-bc.nsf/ and-decisions/audits/ar-vr_fintrac_2017/ (accessed eng/h_00018.html (accessed 5th June, 2020). 5th June, 2020).

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(82) Office of the Privacy Commissioner of Canada, (100) See, eg, Federal Reserve System (2019) The Federal ‘Investigations into federal institutions’, Last modified Reserve System Purposes & Functions, 10th ed., part 11th July, 2019, available at: https://www.priv. V. Washington, DC: Board of Governors of the gc.ca/en/opc-actions-and-decisions/investigations/ Federal Reserve System, available at: https://www. investigations-into-federal-institutions/ (accessed 5th federalreserve.gov/aboutthefed/files/pf_5.pdf June, 2020). (accessed 7th July, 2020). (83) OPC, ref. 79 above. (101) Ibid. See also FDIC, ‘Who is the FDIC?’, Last update (84) Privacy Act, RSC 1985, c. P-21, ss 37. 7th May, 2019, available at: https://www.fdic.gov/ (85) Office of the Privacy Commissioner of Canada, about/learn/symbol/index.html (accessed 12th ‘Audits?’, Last modified 14th December, 2018, September, 2019). available at: https://www.priv.gc.ca/en/opc-actions- (102) Ibid. See also OCC, ‘About us’, available at: https:// and-decisions/audits/ (accessed 5th June, 2020). www.occ.treas.gov/about/what-we-do/mission/ (86) Privacy Act, ss 38. index-about.html (accessed 5th June, 2020). (87) Office of Consumer Affairs, ‘Consumer protection (103) Ibid. See also NCUA, ‘About NCUA’, available at: legislation in Canada’, Last modified 4th December, https://www.ncua.gov/about-ncua (accessed 5th 2018, available at: http://www.ic.gc.ca/eic/site/oca- June, 2020). bc.nsf/eng/ca02965.html (accessed 5th June, 2020). (104) See, eg, Conference of State Bank Supervisors, (88) Ibid. ‘State bank agency contact quick access’, available (89) Brock, C. (2017) ‘Consumer protection’, May, at: https://www.csbs.org/state-bank-agency- available at: https://www.casselsbrock.com/files/file/ contact-quick-access(accessed 5th June, 2020). docs/CasselsBrock_DBIC_ConsumerProtection_ (105) OCC (2013) ‘Third-party relationship: Risk May2017.pdf (accessed 5th June, 2020). management guidance (Bulletin 2013-29)’, 30th (90) Abudulai, S. and Manzer, A. (2019) ‘Canada’, The October, available at: https://www.occ.gov/news- Consumer Finance Law Review, 3rd ed, , February, Law issuances/bulletins/2013/bulletin-2013-29.html Business Research Ltd., London. (accessed 7th July, 2020). (91) Canadian Securities Administrators, ‘Who we are’, (106) Verhage, J. (2019) ‘No banking charter? No available at: https://www.securities-administrators. problem. Fintechs team up with small-town ca/aboutcsa.aspx?id=77 (accessed 5th June, 2020). banks,’ Bloomberg, 23rd September, available (92) Ibid. at: https://www.bloomberg.com/news/ (93) Monk, A. (2019) ‘Supreme Court of Canada decision articles/2019-09-23/no-banking-charter-no- paves way for more efficient national approach problem-fintechs-team-up-with-small-town-banks to securities regulation’, Mondaq Business Briefing, (accessed 7th July, 2020). 17th June, available at: https://www.mondaq. (107) Federal Reserve (2019) ‘Consumer compliance com/canada/securities/815640/supreme-court- supervision bulletin’, December, available at: of-canada-decision-paves-way-for-more-efficient- https://www.federalreserve.gov/publications/ national-approach-to-securities-regulation (accessed files/201912-consumer-compliance-supervision- 9th July, 2020). bulletin.pdf (accessed 7th July, 2020). (94) Insurance Bureau of Canada, ‘Insurance regulators’, (108) Levitin, A. (2013) ‘The consumer financial Last modified 18th June, 2019, available at: http:// protection bureau: An introduction’, Review of www.ibc.ca/on/resources/industry-resources/ Banking and Financial Law, Vol. 32, pp. 321, 327. insurance-regulators (accessed 5th June, 2020). (109) Labonte, ref. 15 above, Figure A-1. (95) Canadian Insurance Services Regulatory (110) Dodd–Frank Act, 12 U.S.C. § 5481(15) (defining Organizations, ‘Who we are’, available at: https:// ’Financial Product and Service’). Note that the www.cisro-ocra.com/WhoWeAre (accessed 5th Dodd–Frank Act contains a number of exceptions June, 2020). to the CFPB’s broad authority. See 12 U.S.C. (96) Comptroller of the Currency (2003) National Banks § 5517(a); 12 U.S.C. § 5518 (excluding auto and the Dual Banking System. Washington, DC: dealers); 12 U.S.C. § 5481(15)(c) (excluding Office of the Comptroller of the Currency, pp. 1, 2, electronic conduit services and insurance available at: https://www.occ.treas.gov/publications- businesses). and-resources/publications/banker-education/files/ (111) Consumer Financial Protection Bureau (2018) national-banks-and-the-dual-banking-system.html ‘Bureau of consumer financial protection (accessed 7th July, 2020). strategic plan; FY 2018–2022’, Washington, DC, (97) Comptroller of the Currency (2018) Conversions 12th February, p. 5, available at: https://files. to Federal Charter. Washington, DC: Office of the consumerfinance.gov/f/documents/cfpb_strategic- Comptroller of the Currency, p. 1, available at: plan_fy2018-fy2022.pdf (accessed 7th July, 2020). https://www.occ.treas.gov/publications-and- (112) Mithal, M. (2017) ‘Malini Mithal to Paul Sanford’, resources/publications/comptrollers-licensing- 30th May. Letter, Federal Trade Commission manual/files/licensing-booklet-conversions-to- Department of Financial Practices, available at: federal-charter.html (accessed 7th July, 2020). https://www.ftc.gov/system/files/documents/ (98) Labonte, ref. 15 above, p. 25. reports/federal-trade-commission-enforcement- (99) Ibid., p. 12. activities-related-compliance-regulation-z-truth-

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lending-act/p154802_2016_report_to_cfpb_re_ (137) Office of the Inspector General (2006) Report to tila_cla_and_efta.pdf (accessed 7th July, 2020). Congress on Implementation of Section 10001 of the (113) Ibid. USA Patriot Act. Washington DC: U.S. Department (114) Ibid. of Health and Human Services, 8th March 8, (115) Equal Credit Opportunity Act, 15 U.S.C. §§ 1691- available at: https://oig.justice.gov/special/s0603/ 1691f. index.htm (accessed 7th July, 2020). (116) Fair Debt Collection Practices Act, 15 U.S.C. §§ (138) The United States Department of Justice, ‘Money 1692-1692p. laundering and asset recovery section (MLARS)’, (117) Fair Credit Reporting Act, 15 U.S.C. §§ 1681- available at: https://www.justice.gov/criminal-mlars 1681x. (accessed 12th September, 2019). (118) Real Estate Settlement Act, 12 U.S.C. §§ 2601– (139) See generally 18 U.S.C. ch. 47. 2617. (140) U.S. Department of Housing and Urban (119) Dodd–Frank Act, 12 U.S.C. § 5481(14). Development, ‘HUD’s regulations division’, (120) CFPB, ‘Bureau of Consumer Financial Protection available at: https://www.hud.gov/program_ Strategic Plan’, p. 5, available at: https://files. offices/general_counsel/HUD-Regulations- consumerfinance.gov/f/documents/cfpb_strategic- Division (accessed 5th June, 2020). plan_fy2018-fy2022.pdf (accessed 9th July, 2020). (141) See Department of Defense, ‘Welcome to MLA’, (121) CFPB, Payday, Vehicle Title and Certain High-Cost available at: https://mla.dmdc.osd.mil/mla/ Installment Loans Final Rule, 82 FR 54472 (Nov. (accessed 10th September, 2012). 17, 2017). The CFPB is currently reconsidering this (142) U.S. Department of Education, ‘U.S. Department rulemaking and may drastically curtail its scope. of Education announces two final regulations CFPB, Payday, Vehicle Title and Certain High-Cost to protect students and help borrowers’, Last Installment Loans Proposed Rule, 84 FR 4252 (6th modified 27th October, 2015, available at: https:// February, 2019). www.ed.gov/news/press-releases/us-department- (122) CFPB, Debt Collection Practices (Regulation F) education-announces-two-final-regulations- Proposed Rule, 84 FR 23274 (21st May, 2019). protect-students-and-help-borrowers (accessed 5th (123) CFPB, Policy Regarding Prohibition on Abusive June, 2020). Acts of Practices, (24th January, 2020). (143) Comptroller of the Currency, ref. 96 above, p. 1, 2. (124) See CFPB, ‘Institutions subject to CFPB (144) See Conf. of State Bank Supervisors & Money supervisory authority’, available at: https:// Transmitters Regulators Association (2016) ‘The www.consumerfinance.gov/policy-compliance/ state of state money services businesses regulation guidance/supervision-examinations/institutions/ and supervision’, May, available at: https://www. (accessed 5th June, 2020). csbs.org/sites/default/files/2017-11/State%20 (125) Dodd-Frank Act, 12 U.S.C. § 5514(a)(1)(B). of%20State%20MSB%20Regulation%20and%20 (126) See CFPB (2012) ‘Supervision and Examination Supervision%202.pdf (accessed 7th July, 2020). Manual’, Washington, DC, October, Overview, (145) Ibid. at 6–7; Odinet, C. (2018 ) ’Consumer bitcredit p. 3, available at: https://www.consumerfinance. and fintech lending’, Alabama Law Review, Vol. 781, gov/policy-compliance/guidance/supervision- pp. 812–813. examinations/ (accessed 7th July, 2020). (146) Mortgage Bankers Ass’n (2018) ‘Understanding the (127) See CFPB, ‘Enforcement’, available at: https:// regulatory compliance framework for commercial www.consumerfinance.gov/policy-compliance/ and business purpose loans’, January, available at: enforcement/ (accessed 5th June, 2020); Dodd- https://www.mba.org/Documents/18292_CMF_ Frank Act, 12 U.S.C. § 5561. RC_White_Paper%201-16-18.pdf (accessed 7th (128) FTC Act, 15 U.S.C. § 45(1). July, 2020). (129) FTC Act, 15 U.S.C. § 57a(f). (147) See, eg, Ala. Code § 8-7-5, Ala. Admin. Code r. (130) Dodd-Frank Act section 1024(c)(3)(A). 830-X-7-.01); Cal. Fin Code § 2032. (131) Gramm-Leach-Bliley Act, 15 U.S.C. § 6801(b). (148) N.Y. State Banking Department, Opinion Letter (132) Electronic Fund Transfer Act, 15 U.S.C. § 1693(b). (2002) ‘Opinion regarding PayPal activities’, 3rd (133) Credit Repair Organizations Act, 15 U.S.C. § June, available at: https://www.dfs.ny.gov/legal/ 1679(a). interpret/lo020603.htm (accessed 7th July, 2020). (134) Federal Trade Commission, ‘About the FTC’, (149) McDonald, K. M. and Rojc, K. (2018) ‘State available at: https://www.ftc.gov/about-ftc law developments driving automotive finance (accessed 5th June, 2020). regulation,’ The Business Lawyer, Vol. 73, Spring, p. (135) FTC, ‘The antitrust laws’, available at: https://www. 555. ftc.gov/tips-advice/competition-guidance/guide- (150) National Conference of States Legislatures, antitrust-laws/antitrust-laws (accessed 25th January, ‘Payday lending state statutes’, Last modified 29th 2020). May, available at: http://www.ncsl.org/research/ (136) The United States Department of Justice, ‘Housing financial-services-and-commerce/payday-lending- and civil enforcement section’, available at: state-statutes.aspx (accessed 5th June, 2020). https://www.justice.gov/crt/housing-and-civil- (151) See, eg, Cal. Bus. & Prof. Code section 17200 enforcement-section (accessed 5th June, 2020). (California’s Unfair Competition Law) and Mass.

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G.L. § 93A (Massachusetts’s Consumer Protection January, available at: https://fas.org/sgp/crs/misc/ Law). Most states have a law similar to these two R45081.pdf (accessed 7th July, 2020). laws. (153) Widman A. and Cox, P. (2011) ‘State attorneys (152) See, eg, Sykes, J. B. (2019) ‘Banking law: An general use of concurrent public enforcement overview of federal preemption in the dual banking authority in federal consumer protection laws,’ 33 system’, Congressional Research Service, 23rd Cardozo Law Review 62 (accessed 30th July, 2020).

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