Federal Agency Interpretation

This January 2025 CFPB Consumer Advisory highlights issues with consumer understanding of Home Equity Investment Loans, including that the companies may not provide standard disclosures or comply with laws protecting consumers when taking out a mortgage.  It also describes pitfalls—the loans are expensive, the homeowner may have to sell the home if unable to repay the loan all at once, and a lien will be placed on the home.  The advisory also lists where homeowners can get help.

This January 2025 CFPB press release announces three different actions that the CFPB took on January 15, 2025 regarding home equity investment loans, with links to those actions—a consumer advisory highlighting problems with these loans, a market overview describing the loans, and an amicus brief arguing that these “investments” are mortgage loans within the scope of the Truth in Lending Act.

This January 2025 CFPB market overview examines home equity contracts—often called home equity “investments” (HEIs), a relatively new financial product in which homeowners get an upfront payment and, in exchange, must repay a single lump-sum repayment in the future that is based, in part, on the home’s value. Key findings include: 

Guidance about using TANF funds to support families facing an economic crisis as a result of EBT theft.

The Consumer Financial Protection Bureau (CFPB or Bureau) issues this Compliance Bulletin to provide guidance to covered persons and service providers regarding fee assessments for pay-by-phone services (phone pay fees) and the potential for violations of sections 1031 and 1036 of the Dodd-Frank Wall Street Reform and Consumer Protection Act’s (Dodd-Frank Act) prohibition on engaging in unfair, deceptive, or abusive acts or practices (collectively, UDAAPs) when assessing phone pay fees. 

The Board, FDIC, and OCC (collectively, the agencies) are issuing final guidance on managing risks associated with third-party relationships. The final guidance offers the agencies’ views on sound risk management principles for banking organizations when developing and implementing risk management practices for all stages in the life cycle of third-party relationships. The final guidance states that sound third-party risk management takes into account the level of risk, complexity, and size of the banking organization and the nature of the third-party relationship.

The Bureau of Consumer Financial Protection is rescinding the Statement of Policy Regarding Prohibition on Abusive Acts or Practices.

Section 1031(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provides that the Bureau of Consumer Financial Protection (Bureau) may use its supervisory and enforcement authority, among other things, to prevent a covered person or service provider from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.

The OCC is rescinding its supervisory guidance entitled ‘‘Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products’’ and OCC Bulletin 2013–40 (collectively, Guidance), which address the OCC’s expectations regarding the offering of deposit advance products by national banks and federal savings associations (collectively, banks).

The OCC is issuing final supervisory guidance entitled ‘‘Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products’’ (Guidance), which addresses safe and sound banking practices and consumer protection in connection with deposit advance products.