Weekly RoundUp
January 11, 2024

CFPB Report Identifies Challenges Faced by Borrowers in Resumption of Student Loan Payments

In this Issue. The Consumer Financial Protection Bureau (CFPB) issued a report identifying challenges faced by borrowers in resumption of student loan payments; the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Federal Reserve), and Federal Deposit Insurance Corporation (FDIC) proposed revisions to the consolidated reports of condition and income (Call Reports) and the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (the FFIEC 002 report); the FDIC issued an advisory on managing commercial real estate concentrations in a challenging economic environment; the OCC announced updates to the Community Reinvestment Act (CRA) regulations and also published frequently asked questions regarding the State Small Business Credit Initiative 2.0 (SSBCI). These and other developments are discussed in more detail below.

Regulatory Developments

CFPB Report Identifies Challenges Faced by Borrowers in Resumption of Student Loan Payments
On January 5, the CFPB released a new report highlighting various challenges that federal student loan borrowers have been experiencing since the resumption of payments after the COVID-19 pandemic pause. The CFPB’s investigation found borrowers are facing three main problems:

  • Extended call hold times: Wait times for borrowers to speak with a live loan servicer representative has increased by 12 minutes since August 2023 to over 70 minutes in October 2023.
  • Income-driven repayment application processing delays: Borrowers submitted millions of income-driven repayment plan applications through October 2023; however, more than 450,000 of those applications remained pending for more than 30 days with no resolution.
  • Inaccurate billing and disclosure statements: Borrowers have reported receiving incorrect billing statements from loan servicers, with errors including incorrect payment due dates and inflated monthly payment amounts that loan servicers calculated using outdated poverty guidelines or incorrect income information.

The CFPB’s oversight of loan servicers’ conduct surrounding return to repayment remains ongoing.

“[T]he CFPB will continue to carefully watch loan servicers and work with federal and state agencies to hold accountable those that violate laws protecting borrowers.”
‒ Rohit Chopra, Director, CFPB

Proposed Revisions to the Consolidated Reports of Condition and Income (Call Reports) and the FFIEC 002 Report
On December 27, the OCC, Federal Reserve, and FDIC requested comment to proposed revisions to the reporting requirements for all three versions of the Call Report and the FFIEC 002 report. The proposed change would require greater detail and uniformity among non-depository financial institutions (NDFIs) in their required reporting. This will enable agencies to better monitor NDFIs’ potential exposure and risk within the market. Proposed revisions to Call Reports address loans to NDFIs and other loans, guaranteed structured financial products, proposed long–term debt requirements, and electronic signature and attestation requirements. The proposed revisions to the FFIEC 002 report form and instructions cover reporting loans to NDFIs and other loans.

These revisions would go into effect on June 30, 2024, with the exception of the long-term debt disclosure requirement, which would go into effect during the same quarter that the earlier proposed rule is finalized. Comments to the proposed revisions are due by February 26, 2024.

FDIC Advisory: Managing Commercial Real Estate Concentrations in a Challenging Economic Environment
On December 18, the FDIC issued a letter to institutions it supervises concerning management of commercial real estate holdings in the current challenging economic environment. In the letter, the FDIC stated that rising office vacancy rates due to hybrid and remote work, coupled with a high number of office loans maturing or expiring in the coming years, could lead to a decline in values in the commercial real estate market. The FDIC expressed concern that institutions with heavy exposure to the commercial real estate and construction markets could be vulnerable to such a downturn.

To guard against a downturn, the FDIC identified key risk management actions, including: (1) maintaining strong capital levels; (2) ensuring that allowances for credit loss are appropriate for the current economic environment and outlook; (3) managing commercial real estate and construction loan portfolios in a manner consistent with their risk; (4) maintaining updated financial and analytical information about commercial real estate borrowers; (5) bolstering infrastructure to manage issues that arise with loans; and (6) maintaining adequate liquidity and diverse sources of funding.

Community Reinvestment Act: Revision of Small and Intermediate Small Bank and Savings Association Asset Thresholds
On December 26, the OCC announced updates to CRA regulations. The OCC’s revisions are to the asset-size thresholds used to define “small bank or savings association” and “intermediate small bank or savings association” under the CRA. These updates apply to any national bank, federal savings association, or state savings association (collectively, banks). As of January 1, 2024, a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.564 billion is a “small bank or savings association” under the CRA regulations. A “small bank or savings association” with assets of at least $391 million as of December 31 of both of the prior two calendar years and less than $1.564 billion as of December 31 of either of the prior two calendar years is an “intermediate small bank or savings association” under the CRA. These revisions become effective January 1, 2024.

Community Reinvestment Act: Frequently Asked Questions Regarding the SSBCI
On January 8, the OCC published answers to frequently asked questions (FAQ) regarding the SSBCI. These FAQs apply to community banks, including national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.

The FAQs address the topics including, but not limited to:

  • Reporting on loans to businesses owned by socially and economically disadvantaged individuals.
  • Regulatory treatment for loans using certain SSBCI-supported credit enhancements.
  • Consideration for loans to tribal governments, enterprises and small businesses on tribal lands.

These FAQs do not introduce new policy or guidance and are based on previously communicated policy, guidance, and interpretations.

Check Out Goodwin’s Latest Industry Insights

Upcoming Goodwin Event – San Francisco Fintech Forum: Investment Trends and Regulatory Updates (February 7)
Goodwin’s Fintech group will host a premier gathering of fintech companies, financial institutions, and investors at our San Francisco office on Wednesday, February 7, to discuss the latest fintech trends facing the industry. For more information, including the program agenda, click here.

FinCEN Issues Beneficial Ownership Information Access Rule; Bank Regulators Issue Interagency Statement
On December 21, 2023, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule regarding access to the beneficial ownership information reported to FinCEN pursuant to the Corporate Transparency Act. Read more on this rule in our recent client alert.

Corporate Transparency Act (CTA) Resource Center
Go-to resource with on-demand webinars and compliance toolkit.

Consumer Finance Insights (CFI) Blog
The latest on consumer finance regulation, litigation, and enforcement.

FinReg & Policy Watch Blog
Stay on top of developments affecting the financial services community.

Digital Currency & Blockchain Perspectives Blog
Stay on top of digital currency industry news, regulatory developments, and issues.

Fintech Flash
The latest news and developments for the rapidly evolving fintech industry – which often can change in a flash.

Bank Failure Knowledge Center
Timely updates on important developments following the March 2023 US bank failures.

2022 Consumer Financial Services Year in Review
This in-depth report summarizes major regulatory, litigation, and enforcement activity that impacted the consumer financial industry in 2022, and identifies the key trends for 2023.


This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee a similar outcome.