October 14, 2016  |    Leave a comment

After a few weeks of flexing its muscles against Wells Fargo, LendUp, and Navy Federal Credit Union, the CFPB has suffered a setback of its own. The US Court of Appeals for D.C. declared that the structure of the CFPB is unconstitutional stating that the director of the CFPB had “more unilateral authority than any other officer in any of the three branches of the U.S. government, other than the president.”

From Bloomberg:

In a further blow to the bureau’s authority, the court also found that the CFPB violated [PHH’s] due process rights by reversing a long-standing interpretation of real estate law without notice and then retroactively applying its new standard to impose violations.

That’s not to say that these institutions didn’t deserve some penalties – Navy Federal did engage in some improper behavior, such as false wage garnishment threats, threatening to report overdue debts to military higher-ups, and blocking customer access to online banking.

However, this blowback to the CFPB could add further confusion around regulation and proper agency authority and jurisdiction over various fintech companies. I mentioned earlier how the CFPB had taken action against LendUp, but fintech has clearly been in its sights as earlier this year they had also assessed a penalty against Dwolla for “data security violations.”

In addition, they had announced in March that they would accept complaints against online marketplace lenders. After an apparent land grab for as much power as it could gain, this may slow the CFPB’s ambitions in certain areas, or at least give companies more ground to fight back.

Somewhere between nothing and the CFPB exists a happy medium where both consumers and finserv/fintech business are protected from improper behavior.

Insurance for enterprises + contractors
Bunker, an insurtech company focusing on providing contract-related insurance for independent contractors and small businesses, has launched in beta. The platform facilitates communication between enterprises and their vendors and allows the vendors to find the right type of insurance to cover their contracted work. The insurtech market continues to pick up steam as products begin to be launched after the last year or two has mainly seen companies in stealth mode.

Marcus Goldman wants to lend you money
Marcus, the unsecured consumer lending arm of Goldman Sachs, has finally been launched to the public. At least, some of the public – you can only enter an application if you receive a code in the mail. As a fixed-rate, term product for less than $30,000 of credit, it is a relatively simple product, but is Goldman’s foot in the door as it seeks to expand its consumer banking business.

Assorted fundraisings
Slice Labs raised an undisclosed amount of capital to continue its beta of on-demand insurance for people in the on-demand economy.
Payzer, a provider of mobile financial solutions (payments and financing) for specialty trade contractors has raised $4.25MM in a Series B round, including participation from Route 66 Ventures.
Zero, a mobile banking app + “card with debit-like functionality with credit card rewards” has raised $2.5MM.

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