Cornerstone Newsletter
Cornerstone Licensing
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INDUSTRY NEWS
CFPB RULE WOULD SUBJECT DATA BROKERS TO FCRA RULES
?The CFPB has proposed a sweeping rule that would significantly expand the scope of the Fair Credit Reporting Act (FCRA), targeting data brokers and entities handling consumer data. The rule would classify brokers selling sensitive personal information, such as income, credit history, and Social Security numbers, as "consumer reporting agencies" (CRAs), subjecting them to stricter accuracy, access, and security standards. It also broadens definitions of consumer reports and CRAs to include nearly any activity involving consumer data, while credit header data and data shared for financial gain fall under new restrictions.
?Key provisions include requiring explicit, one-year-valid consumer consent for data sharing and limiting the resale of personal identifiers. The rule aims to address critical risks such as identity theft, criminal exploitation, and national security threats posed by foreign entities acquiring U.S. consumer data.
?The public comment period closes on March 3, 2025, and the rule's future may be influenced by upcoming administrative changes. Stakeholders are encouraged to review their practices and submit feedback. Effective immediately upon adoption.
NEW YORK
LEGISLATIVE UPDATES IN?DEBT COLLECTION
Recently, New York enacted two significant laws affecting debt collection practices. The first law prohibits debt collectors from joining a consumer's social media network or using social media platforms to communicate with consumers regarding debt collection. This measure defines social media platforms as public or semi-public services that facilitate social interactions, excluding email and direct messaging.
?The second law regulates private education creditors, requiring them to register with the Superintendent of Financial Services and renew their registration annually. These creditors must also provide detailed information about private education debts, including default rates and school-specific data. Violators of this law may face a ban of up to 10 years from operating as private education creditors in the state. Both measures were signed into law by Governor Kathy Hochul on December 21, 2024, and take effect immediately.
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CORPORATE TRANSPARENCY ACT
BOI REPORTING REQUIREMENTS IN FLUX
The Corporate Transparency Act’s Beneficial Ownership Information (BOI) reporting requirements remain in legal limbo due to ongoing court challenges. FinCEN has extended the filing deadline for existing businesses to January 13, 2025, but enforcement is currently on hold. As of Dec 26th, the Corporate Transparency Act has been blocked again nationwide, suspending all filing deadlines.
CORNERSTONE CAN HELP
While the situation evolves, we recommend staying informed and prepared to file if needed. Cornerstone will provide updates as developments occur and will be standing by to assist with your BOI filings, saving you time and ensuring accuracy. If you're a client, we likely have all the information needed to file on your behalf.
Connect with us today to learn more or move forward. If you are already a Cornerstone client, please?book time?directly with Beth Aide, Sr. Customer Success Manager.
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CALIFORNIA
ANNUAL REPORT DEADLINE FOR CA COMMERCIAL FINANCING ENTITIES
Entities offering or providing commercial financing or related services to small businesses, nonprofits, or family farms principally managed from California must file an annual report with the California Department of Financial Protection and Innovation (DFPI) by March 15, 2025, under the California Consumer Financial Protection Law (CCFPL). Exemptions apply to those conducting minimal transactions as specified in the regulations. Reports must be submitted electronically through the DFPI Self-Service Portal, requiring a registered account. Further guidance and updates are available on the DFPI website.
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WASHINGTON
EARNED WAGE ACCESS SERVICES ACT INTRODUCED
The proposed Washington State Earned Wage Access Services Act establishes strict regulations for offering earned wage access services, requiring providers to obtain a license by July 1, 2026. Licenses remain valid unless surrendered, revoked, or suspended, and annual assessments are due for licenses held at any point during the previous calendar year. Licensees are prohibited from certain practices, including sharing fees with employers, using credit reports for access decisions, and charging delivery fees over $7 per transaction.
Additional restrictions include bans on reporting unpaid amounts to credit agencies, using aggressive debt collection tactics, and misleading or deceptive advertising. The measure explicitly excludes earned wage access services from being classified as loans, credit, or money transmission, and exempts traditional financial institutions. The Department of Financial Services is granted authority to enforce compliance and interpret the act.
CORNERSTONE CAN HELP
BEWARE OF PHISHING EMAILS
There has been an increase in deceptive emails targeting businesses, particularly those soliciting filings like BOI reports to FinCEN. These emails often aim to solicit business in sneaky ways, promoting filings that are unnecessary, illegitimate, or misleading. Scammers may disguise these communications as urgent or official, hoping to exploit confusion or fear to gain unauthorized payments or agreements.
At Cornerstone, your trust is our priority. Any requests from us for payments, renewal information, forms to be completed, etc. will come from your known specialist, our accounting department or someone you recognize. If you ever receive an email or solicitation that seems suspicious or you are unsure of, don’t hesitate to share it with your specialist. We’ll help you sort through the noise and ensure you act only on what truly matters.
Count on Cornerstone to provide clarity, protect your business, and guide you with the personal touch you know and trust.
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DISTRICT OF COLUMBIA
STUDENT LOAN BORROWER PROTECTIONS?
Effective October 1, 2024, the District of Columbia’s Student Loan Borrower Bill of Rights strengthens regulations for loan servicers and lenders. Borrowers can seek damages for violations, including treble damages—triple the actual harm suffered—up to $1,500 for significant interference with benefits like loan forgiveness.
The law mandates that servicers be licensed and requires them to respond promptly to borrower inquiries, honor benefits during loan transfers, and offer flexible repayment plans. It prohibits deceptive practices, improper default acceleration, and restrictions on cosigner releases. A new Student Loan Ombudsperson will oversee compliance, handle complaints, and provide borrower education, further reinforcing these protections.
MASSACHUSETTS
MOVES TO REGULATE MONEY TRANSMISSION
A Massachusetts Senate committee has advanced a bill to regulate domestic money transmission, updating the state's Division of Banks regulations to include apps like Venmo and Cash App. The proposed legislation requires service providers to obtain a state license, submit quarterly financial condition reports, and subjects them to potential license revocation for non-compliance, fraud, or unsafe practices.
This bill, based on a House-passed version (H 4840) from July, addresses Massachusetts' outdated domestic money transmission rules, making it consistent with other states. The bill must pass before the legislative term ends on December 31, 2024, or risk a pocket veto. If enacted, the new regulations will expand Massachusetts' oversight from foreign to domestic money transmission services.
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INDUSTRY NEWS
CFPB FINALIZES OVERSIGHT RULE FOR DIGITAL PAYMENTS APPS?
The CFPB has finalized a rule, effective 30 days after Federal Register publication, to oversee large nonbank digital payment companies handling over 50 million consumer transactions annually. This rule extends supervisory authority similar to that over banks and credit unions, impacting approximately seven companies responsible for 13 billion transactions yearly.
?Key provisions include strengthened consumer protections, such as ensuring personal financial data rights, addressing fraud under Regulation E, and preventing sudden account closures that disrupt consumers' access. The rule excludes digital currency transactions and sets a 50 million annual transaction threshold for applicability.
The rule faces potential challenges under a new administration or through Congressional action, which could repeal it under the Congressional Review Act. The CFPB aims to ensure compliance with financial protection laws, including the Dodd-Frank Act and Electronic Fund Transfer Act.
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INDUSTRY NEWS
GUIDANCE ISSUED ON ELDER FINANCIAL EXPLOITATION RISK MANAGEMENT?
Federal and state financial agencies have issued joint guidance outlining strategies to combat elder financial exploitation, which results in over $28 billion in annual losses. While not imposing new regulatory requirements, the guidance emphasizes enhancing risk-based policies, internal controls, and transaction monitoring to identify and mitigate exploitation risks. Institutions are encouraged to train employees to recognize red flags, establish trusted contacts for suspected cases, and use transaction holds or disbursement delays in compliance with applicable laws.
Institutions must file Suspicious Activity Reports (SARs) for suspected elder exploitation and may voluntarily file for activities below mandatory thresholds. Agencies also recommend timely reporting to law enforcement or Adult Protective Services to increase the likelihood of recovering funds. Engaging with fraud prevention networks and conducting consumer education on scams are highlighted as proactive measures. Institutions should ensure compliance with anti-discrimination laws like the Equal Credit Opportunity Act when implementing these practices.
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CALIFORNIA
PROPOSED UPDATES TO CCPA REGULATIONS AND CYBERSECURITY REQUIREMENTS
The California Privacy Protection Agency (CPPA) has initiated rulemaking to amend the California Consumer Privacy Act (CCPA) regulations, with public comments open until January 14, 2025. The proposed updates include requirements for businesses to conduct annual cybersecurity audits, perform risk assessments, and clarify CCPA compliance obligations for insurance companies.
?Key provisions also implement consumers’ rights to access and opt out of automated decision-making technology (ADMT) used by businesses. These changes aim to enhance data privacy, security, and transparency in response to evolving technological and regulatory landscapes. The CPPA Board will review public feedback before finalizing the regulations in a future meeting.
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INDUSTRY NEWS
NEW RULE APPLIES MORTGAGE STANDARDS TO RESIDENTIAL PACE LOANS
On December 17, 2024, the CFPB finalized a rule applying mortgage protections under Regulation Z to Residential Property Assessed Clean Energy (PACE) loans, effective March 1, 2026. PACE loans, used to finance clean energy improvements via property tax assessments, will now require ability-to-repay evaluations similar to traditional mortgages. Borrowers must also receive standard mortgage disclosures, helping them compare PACE loan costs with alternative financing.
PACE loans are secured by liens that often take priority over mortgages, raising concerns about foreclosure risks. CFPB studies have highlighted that PACE borrowers often face higher costs and are more likely to default on primary mortgages. The rule aims to address these issues, ensuring loans are responsibly issued and borrowers are better informed.
INDUSTRY NEWS
CFPB FINALIZES OVERDRAFT CAP EFFECTIVE OCTOBER 2025
?The CFPB issued a final rule capping overdraft fees, effective October 1, 2025, aiming to save consumers $5 billion annually and address longstanding regulatory gaps. Banks must choose one of three approaches: capping fees at $5, limiting fees to cover costs and losses, or treating overdrafts as loans subject to lending laws with clear interest rate disclosures.
领英推荐
?The rule is part of the CFPB’s initiative to curb “junk fees,” though it faces legal challenges from industry groups and potential repeal under the Congressional Review Act. While consumers may save an estimated $225 annually per household, some banks warn of reduced services or new fees to offset revenue losses. The rule’s impact on overdraft services and broader financial practices remains under scrutiny.
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INDUSTRY NEWS
CFPB UNCOVERS LOAN SERVICING VIOLATIONS
The CFPB reported significant violations in student loan refinancing, servicing, and debt collection as federal borrowers resumed repayments post-COVID. Issues included misleading refinancing offers that negated federal protections, unlawful debt collection practices like transcript withholding, and inaccurate billing from servicers.
Servicers also faced criticism for excessive call wait times and unauthorized account debits. The CFPB has directed lenders and servicers to improve borrower protections, revise billing policies, and ensure accessible loan management systems. These changes aim to address failures in the $1.77 trillion student loan market.
CORNERSTONE CAN HELP
SURETY BONDS?
Surety Bonds can feel like just one more hassle standing in the way of your compliance. You want to close?the loop on your licensing or permitting requirements and get back to what you do best – running your business. But the process can be slow, costly, and downright stressful. And while you’re waiting, you’re losing out on potential clients and revenue.
At Cornerstone, we understand and we’re here to help. Our team of experts work tirelessly to get you the surety bond you need quickly and at a fair price. No more lengthy waits for a response or being hit with hidden fees. Plus, our dedication to exceptional customer service ensures a stress-free experience from start to finish.
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BLOG POST
PREPARING FOR THE CFPB'S 'SMALL-DOLLAR' LENDING RULE
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CONNECTICUT
$30M IN MEDICAL DEBT CLEARED
Connecticut has paid off $30 million in medical debt for 23,000 residents through a partnership with Undue Medical Debt, costing only $100,000. Letters confirming the debt forgiveness will be sent on December 23, 2024. Governor Ned Lamont emphasized the initiative's goal to make healthcare more affordable, while state leaders and the Connecticut Hospital Association highlighted the commitment to reducing financial burdens and opposing aggressive debt collection practices.
VIRTUAL SUGGESTION BOX
We’ve continued to hear great feedback from you, our clients, on how our newsletter provides value for your organization. To ensure we continue to research and provide the best data, we have created a virtual “suggestion box” for your ideas. Whatever topic you’d like to learn about, large and small, we will go research with our team and knowledgeable folks from our industry.?
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BLOG POST
ENHANDING MORTGAGE COMPLIANCE WITH AI AND AUTOMATION
Explore how AI and automation are transforming compliance and risk management in the mortgage lending industry. From streamlining loan origination and underwriting processes to enhancing fraud detection and real-time compliance monitoring, these technologies are reducing costs, improving accuracy, and mitigating risks. Discover the latest advancements, including AI-driven credit assessments, predictive analytics, and automated fraud prevention systems, that are helping lenders navigate regulatory complexities and stay ahead.
Click to learn how AI is becoming a strategic asset for the future of mortgage lending.
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INDUSTRY NEWS
DEBT COLLECTION REFORM BILL REINTRODUCED
Rep. Maxine Waters reintroduced the Comprehensive Debt Collection Improvement Act (H.R. 10509) to modernize federal debt collection laws and enhance protections for individuals and small businesses. Key provisions include a two-year prohibition on collecting medical debt after it's incurred, requiring affirmative consent for digital communication by debt collectors, capping excessive collection fees, and banning abusive confessions of judgment against small businesses. The bill also aims to protect servicemembers from harassment and threats related to debt collection. Originally introduced in 2021 and passed by the House, the bill seeks renewed support for stronger consumer safeguards against evolving debt collection practices.
INDUSTRY NEWS
STATES EMBRACE BITCOIN
Florida, Pennsylvania, and Texas are advancing plans to establish Bitcoin reserves, signaling growing state-level adoption of cryptocurrency.
These initiatives aim to leverage Bitcoin for economic stability and innovation.
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BLOG POST
MEDICAL DEBT: A 2024 YEAR-END LEGISLATIVE OVERVIEW
2024 was marked by major shifts in medical debt collection regulations at both federal and state levels. New laws like the Medical Debt Relief Act and state-specific rules in California, Connecticut, and others focus on consumer protections, limiting credit reporting, and enforcing transparency.?
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TEXAS
EXPANDS MORTGAGE BORROWER PROTECTIONS
The Texas Department of Savings and Mortgage Lending (DSML) implemented new rules on November 23, 2024, introducing enhanced protections for mortgage borrowers. Key updates include simplified disclosures for mortgage companies and bankers, mandatory readability standards (12-point font), and the requirement for loan originators to sign conditional pre-qualification and approval letters when issued.
The rules also address the use of "trigger leads," mandating clear disclosures to consumers, including the purpose of contact and the origin of their information, to prevent deceptive practices. Mortgage servicers now need to include identity disclosure only in the first notice to borrowers and report "material risk incidents" such as security breaches or catastrophic events to the DSML within strict timelines.
These regulations align Texas with broader consumer protection trends and necessitate operational updates for mortgage lenders and servicers managing Texas loans.
This information is not intended to be, nor is it, legal advice. It is intended for information purposes only. We make no warranty, express or implied, as to the accuracy or reliability of this information. We are not attorneys. You must retain your own attorney to receive legal advice. While Cornerstone strives to provide the most current and accurate state licensing information, the responsibility for any decision related to state licensing or agency compliance is solely yours.