August 31, 2026
Below you will find several key developments in the financial services industry, including related developments in information privacy and data security, from the past week. We add an "Amicus Brief(ly)1" comment to each item, where we briefly (see what we did there?) note for friends (and again?) of CounselorLibrary the important takeaways from the developments outlined in the email. Our legal reporters - CARLAW, HouseLaw, InstallmentLaw, PrivacyLaw, and BizFinLaw - provide more comprehensive, real-time updates of federal and state laws, regulations, litigation, and other industry items of interest. For a personal guided tour and free trial of any of these legal reporters, please contact Michael Willer at 614-855-0505 or mwiller@counselorlibrary.com.
On August 27, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency announced the issuance of a final rule that adopts a uniform definition of the term "unsafe or unsound practice" for purposes of enforcement actions and supervisory activities. The final rule additionally establishes uniform standards for when and how the agencies may, as part of the examination process, issue Matters Requiring Attention and communicate supervisory observations and other violations of laws and regulations. The final rule also clarifies how the agencies will tailor their use of the unsafe or unsound practice definition and the MRA standard based on risk factors specific to an institution. In addition, the final rule explicitly limits its scope to institutions the agencies supervise.
The final rule defines the term "unsafe or unsound practice" to mean "a practice, act, or failure to act, alone or together with one or more other practices, acts, or failures to act, that (1) is contrary to generally accepted standards of prudent operation; and (2)(i) if continued, is likely to (A) materially harm the financial condition of the [insured depository institution]; or (B) present a material risk of loss to the [Deposit Insurance Fund]; or (ii) materially harmed the financial condition of the [insured depository institution]."
The final rule is effective 60 days after it is published in the Federal Register.
In connection with the final rule, the OCC substantially revised its policies and procedures manuals regarding enforcement actions and MRAs and released for public comment a notice of proposed rulemaking to codify its supervisory framework for the issuance of MRAs in response to violations of laws and regulations.
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On August 25, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the Department of Housing and Urban Development, the Department of Justice, and the Federal Housing Finance Agency rescinded guidance provided in the "Interagency Statement on Special Purpose Credit Programs Under the Equal Credit Opportunity Act and Regulation B," clarifying that special purpose credit programs must comply with the ECOA, Reg. B, and the Fair Housing Act and that "[f]ederal law does not authorize any generalized remedial 'equity' initiatives absent specific cases of unlawful discrimination, and creditors should not rely upon previous guidance which may have suggested otherwise."
According to the agencies, the interagency statement, which was issued in February 2022, "encouraged creditors to offer special purpose credit programs that 'meet the credit needs of specified classes of persons' and gave assurances to participants that were uncertain about the permissibility of such credit programs. However, the Interagency Statement referenced a provision of [Reg. B] ... that has since been amended. The earlier version of [Reg. B] permitted creditors to implement lending programs based on the race, color, national origin, or sex of the applicant under certain circumstances, and the Interagency Statement and other related guidance referenced that earlier version of the provision. Similarly, the assurance given with respect to conformity with the [FHA] was based on an interpretation promulgated under HUD guidance that is no longer in effect. These prior interpretations cannot be reconciled with the statutory text of ECOA and the FHA, which expressly prohibit discrimination against individuals based on prohibited characteristics. Furthermore, the Supreme Court has been consistent that race-based policies are subject to higher scrutiny and that a general desire to remedy societal discrimination does not satisfy such threshold."
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On August 19, the Federal Trade Commission announced that it is seeking public comment on a proposed policy statement concerning personalized pricing, which is the use of a consumer's personal data to set a price according to the amount that a company believes the consumer is willing to spend on a product or service. According to the proposed policy statement, "Congress has not given the Commission the authority to prohibit personalized pricing in all circumstances, but the Commission intends to enforce the law aggressively against any deceptive or unfair personalized pricing practices that violate Section 5 of the FTC Act or any other law enforced by the Commission. Where consumers reasonably expect that prices for a product or service will not vary based on their personal data, businesses that engage in personalized pricing should clearly and conspicuously disclose not just that the price is personalized, but also the basis for that personalization and the types of data on which the personalization is based. The failure to make these disclosures is likely to constitute an unfair or deceptive act or practice in violation of Section 5."
The FTC states that "[r]etailers may deceive consumers in violation of Section 5 when they represent, expressly or by implication, that a price is static or widely offered when in fact it is personalized. They may similarly deceive consumers when a consumer reasonably believes that a price for a good or service is static or widely offered, and the merchant fails to disclose that the price is in fact personalized. ... Similarly, retailers may violate Section 5 when they mislead consumers as to the basis for the personalization of a price or the effect of that personalization. Consumers who reasonably believe that a personalized price is a discount based on their purchase history with that retailer when it is in fact a higher price based on information about their disposable income or their shopping habits with other firms, for example, may be deceived into not taking action to avoid the personalized price."
The FTC also states in the proposed policy statement that "[s]ome personalized pricing practices may also be unfair under Section 5. The higher price paid by a consumer due to personalized pricing may be a substantial injury. Consumers may not reasonably be able to avoid that higher price if the fact or nature of personalization of the price has been concealed by the retailer. For example, consumers may not be able to avoid paying the higher personalized price if they lack the information or tools necessary to, among other things, modify their behavior to avoid triggering higher prices, dispute or correct inaccurate information collected about them that is leading to higher prices, or avoid the collection of that data in the first place."
"Data practices associated with personalized pricing may also implicate Section 5. ... Businesses that collect, use, or disclose consumers' personal data for the purpose of personalized pricing without adequate disclosures or without obtaining consent may violate Section 5. And businesses that base personalized prices on personal data of consumers without sufficiently verifying that consumers consented to the collection of those data for that purpose may violate Section 5."
Comments are due by September 18, 2026.
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On August 19, the Federal Trade Commission and the State of Connecticut obtained a $4 million settlement with a vehicle dealership, its principals, general manager, finance manager, and two sales managers, alleging deceptive and unfair practices in the advertising, sale, and financing of vehicles in violation of the FTC Act and the Connecticut Unfair Trade Practices Act.
The FTC and Connecticut sued the defendants in January 2024, alleging that they charged improper fees in connection with the sale of certified pre-owned vehicles. Certified pre-owned vehicles have been inspected and repaired to the manufacturer's specification and are covered by a manufacturer's extended warranty. According to the complaint, when consumers attempted to purchase certified vehicles for the prices advertised, the defendants charged them hundreds to thousands of dollars in additional fees for services that are part of certifying a vehicle. In addition, the complaint alleged that the defendants represented that consumers were required to pay these additional inspection, safety and reconditioning, and certification fees to purchase vehicles when, in fact, consumers are not required to pay such fees to purchase vehicles that are already advertised as certified. The complaint also alleged that, despite stating in advertisements that vehicles are certified and come with a limited warranty, the defendants did not get the vehicles certified by the manufacturer. The defendants allegedly advertised a vehicle as certified but did not report the sale of that vehicle or pay the certification fee to the manufacturer. Therefore, the consumer did not receive a certified vehicle or the benefits of the limited manufacturer warranty that come with certification. The FTC and Connecticut also alleged that the defendants charged consumers for add-on products that they did not authorize, including guaranteed asset protection products, service contracts, maintenance contracts, and total loss protection coverage, or deceived consumers into paying for them by saying that they were required. Finally, the complaint alleged that the defendants made misrepresentations about registration and other state-imposed fees, such as by stating that certain fees were required by the state when, in fact, they were not and by inflating the amount of required state fees.
The proposed order prohibits the defendants from misrepresenting: the costs or terms of purchasing, financing, or leasing a vehicle; the availability of vehicles at an advertised price; whether vehicles are certified or include a limited manufacturer warranty; whether charges, fees, taxes, products, or services are optional or required; whether charges, products, or services are authorized by consumers; and the amount of any charge, fee, or tax. The defendants are also required under the proposed order to clearly and conspicuously disclose, with respect to the purchasing, financing, or leasing of a motor vehicle, the total price as the most prominently displayed item in any visual disclosure. However, if the defendants charge a fee for processing documents, they must, in addition to including the fee in the total price, state the fee separately and adjacent to the total price if the dealership is based in Connecticut or any other state that has such a requirement.
Finally, the proposed order requires the defendants to obtain express, informed consent from consumers for all charges.
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Illinois Governor JB Pritzker recently signed Senate Bill 2951, which amends Sections 13-115 and 13-206 of the Illinois Code of Civil Procedure to provide that an action on an indebtedness of any kind that is secured by a mortgage or deed of trust in the nature of a mortgage must be commenced within 10 years, regardless of whether it is a traditional home loan or a revolving credit product like a home equity line of credit.
S.B. 2951 supersedes the Illinois Appellate Court's 2025 decision in BMO Bank N.A. v. Zbroszczyk, which held that the 5-year statute of limitations under Section 13-205 applied to actions involving HELOCs secured by mortgages rather than the 10-year limitations period for promissory notes under Section 13-206.
The law is effective immediately.
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An individual bought a vehicle from a dealership. In connection with the purchase, the individual signed a Buyer's Order, which contained an arbitration provision. He also signed a separate retail installment sale contract to finance the purchase. The RISC did not include an arbitration provision. Neither the Buyer's Order nor the RISC referenced the other. Later, the creditor, which was the assignee of the RISC, repossessed and sold the individual's vehicle after he allegedly defaulted on his payments under the RISC. The creditor then sued the individual for breach of contract and sought a judgment for the deficiency amount remaining after the sale of the vehicle. The individual filed a counterclaim, alleging that the creditor violated the statutorily mandated pre-sale notice requirements. The creditor moved to compel arbitration of the individual's counterclaim pursuant to the arbitration provision in the Buyer's Order. The trial court refused to compel arbitration, concluding that no arbitration agreement existed between the parties. The creditor appealed.
The Court of Appeals of Missouri affirmed the trial court's decision. The creditor argued that an arbitration agreement existed between it and the individual because: (1) it was entitled to enforce the arbitration provision in the Buyer's Order; and (2) the Buyer's Order and the RISC should be construed together because they were signed contemporaneously.
The appellate court first concluded that the dealership did not assign or intend to assign the Buyer's Order to the creditor when it assigned the RISC. The appellate court relied on a statement by the dealership's finance and insurance manager confirming that the dealership neither assigned nor intended to assign the Buyer's Order to the creditor. In addition, the language in the Buyer's Order did not contemplate any assignment, unlike the language in the RISC. Therefore, the appellate court found that the Buyer's Order, including its arbitration provision, was between the individual and the dealership, not the individual and the creditor. Moreover, the appellate court noted that the RISC explicitly stated that it "contains the entire agreement between [the creditor] and [the individual] relating to the sale and financing of the motor vehicle."
Next, the appellate court concluded that although the individual signed the Buyer's Order and the RISC contemporaneously, the facts indicated that the dealership and the individual did not intend for the documents to be construed together. Applying the reasoning in a similar case, Jay Wolfe Used Cars of Blue Springs, LLC v. Jackson, 2014 Mo. App. LEXIS 152 (Mo. App. February 18, 2014), the appellate court found that because the dealership and the creditor are separate entities, it would be inappropriate to read the Buyer's Order and the RISC as one contract "'because doing so would result in imputing the contractual rights and obligations of one entity to the other, which Missouri law generally disallows.'" The appellate court "also decline[d] to find that because the documents may have been signed contemporaneously that the documents must be read together as one because, like in Jay Wolfe LLC, the [RISC] here contains all the material terms necessary to the transaction as it sets forth the purchase price of the vehicle, identifies all the terms for payment, and identifies the conditions and consequences of default. Also, as in Jay Wolfe LLC, [the creditor] only sought to enforce the [RISC] in its petition, with no reference to the Buyer's Order whatsoever. Further, the Buyer's Order states nothing regarding assignment, nor does it reference the [RISC.] The [RISC] also fails to reference or incorporate the Buyer's Order."
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