Covington Financial Services

Subscribe to all posts by Covington Financial Services

What To Keep in Mind For Cultural Reviews In The #MeToo Era

In the wake of the #MeToo movement and broader conversations about sexual harassment and wage discrimination, many financial institutions are wondering whether any of these issues are affecting their organizations and, if so, how to address them.  To assess this question, financial institutions are increasingly turning to internal cultural reviews. These reviews, in which investigators … Continue Reading

CFPB Dismisses Suit Against Tribal Lenders

In a surprising turn of events, the CFPB on Thursday dismissed its ongoing litigation against Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc.  The Bureau’s case was predicated on a controversial theory that turned alleged violations of state law into alleged violations of the Dodd-Frank Act, … Continue Reading

CFPB Requests Public Comment on Bureau Activities

The Consumer Financial Protection Bureau announced today a planned series of Requests for Information on the Bureau’s activities and how those activities impact consumers and covered entities. According to the press release, the goal of issuing these Requests for Information is to “ensure the Bureau is fulfilling its proper and appropriate functions to best protect … Continue Reading

California Bill Would Mandate Expedient Software Updates for Credit Bureaus

Following the Equifax data breach in 2017, there has been heightened awareness surrounding how credit reporting agencies handle consumers’ personal information. At the same time, recent high-profile attacks, such as the “WannaCry” ransomware attacks, have focused media and regulatory attention on vulnerabilities associated with unpatched systems. In response to these two concerns, on January 10, … Continue Reading

Whistleblower Retaliation: How Companies Should Prepare for the Supreme Court’s Upcoming Decision

For unprepared companies, whistleblowers can cause serious problems. Companies could be subject to burdensome investigations by law enforcement authorities or hit with substantial fines and other sanctions. Companies might even face exposure for alleged retaliation against a whistleblower if the situation is not handled carefully. In this article for the New York Law Journal on … Continue Reading

GAO Finds that the CFPB’s 2013 Bulletin on Indirect Auto Lending is a Rule for Purposes of the Congressional Review Act.

On December 5, 2017, the U.S. Government Accountability Office (“GAO”) issued a letter finding that the Consumer Financial Protection Bureau’s March 21, 2013 Bulletin on Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act is a “rule” for the purposes of the Congressional Review Act (“CRA”), and therefore should have been submitted to … Continue Reading

CFPB Acting Director Institutes Suspension of Data Collection, Reveals Plans to Bring in More Political Appointees, and Announces Review of Pending Enforcement Matters

Acting CFPB Director Mick Mulvaney made three important announcements this week.  First, on December 4, he announced a suspension of the agency’s collection of consumers’ personal information due to concerns about cybersecurity. Mulvaney, who said he is taking data security “very, very seriously” according to The Wall Street Journal report (paywall), explained that the Bureau … Continue Reading

CFPB Sues Tribal-Affiliated Online Loan Servicer for Collecting on Allegedly Void Loans

On November 16, 2017, the CFPB filed suit in Montana federal court against Think Finance for activities connected to its tribal-affiliated internet lending business.  Think Finance worked with lenders owned by Native American tribes to offer small-dollar loans to consumers that the Bureau alleges are void under state law.  This suit came on the same … Continue Reading

CFPB Requests Information Related to Consumers’ Access to Free Credit Scores

On November 13, 2017, the Consumer Financial Protection Bureau published two notices in the Federal Register seeking information related to consumers’ access to free credit scores.  These notices highlight the Bureau’s continued focus on credit scoring and consumer understanding of credit scores as a priority area for the CFPB. In the first notice, the CFPB’s … Continue Reading

Texas District Court Rules that Notification of Purpose in CFPB CID Provides Fair Notice

On January 5, 2017, the Consumer Financial Protection Bureau (the “CFPB”) issued a civil investigative demand (“CID”) to The Source for Public Data, L.P. (“Public Data”), a company that collects personal information about consumers. The CID requested information to determine whether consumer reporting agencies, persons using consumer reports, or other persons have engaged or are … Continue Reading

CFTC Proposes Amendments to CCO and Annual Report Requirements for Certain CFTC Registrants

The CFTC recently proposed amendments (the “Proposal”) to its regulations regarding certain duties of chief compliance officers (‘‘CCOs’’) of swap dealers (‘‘SDs’’), major swap participants (‘‘MSPs’’), and futures commission merchants (‘‘FCMs’’) (collectively, ‘‘Registrants’’); and certain requirements for preparing and furnishing to the Commission an annual report containing an assessment of the Registrant’s compliance activities. The … Continue Reading

Consumer Financial Protection Bureau Releases 2016 Consumer Response Annual Report

In its most recent Consumer Response Annual Report (the “Report”), the Consumer Financial Protection Bureau (“CFPB”) announced that for the period January 1 to December 31, 2016, the CFPB received over 290,000 complaints, a 7 percent increase from 2015.  2016 also saw the addition of two additional complaint categories: Federal Student Loan Servicing in February … Continue Reading

CFTC Extends Relief for SEFs with respect to SEF Confirmation and Recordkeeping Requirements

On March 24, 2017, the CFTC issued an extension of no-action relief with respect to confirmation and recordkeeping requirements for swap execution facilities (“SEFs”) under CFTC Regulations 37.6(b), 37.1000, 37.1001, 45.2 and 45.3(a). SEFs are required under SEF Core Principle 10–implemented by CFTC Regulations 37.1000 and 37.1001– to maintain records of all activities relating to … Continue Reading

FTC Enforcement Action Signals Possible Changes Coming In Unfairness Doctrine

On February 6, the FTC, along with the State of New Jersey, announced a settlement with TV-maker VIZIO related to VIZIO’s alleged data collection practices on millions of its ‘smart,’ network-connected TVs. According to the complaint, VIZIO collected information on consumers which it then shared with third parties, without sufficiently disclosing the data collection and … Continue Reading

CRE Concentrations Affect Bank M&A Activity

In recent years, bank regulators increasingly have focused on the growth in commercial real estate (CRE) concentrations and the perceived risk that such concentrations create in relation to earnings and capital.  This concern was highlighted in December 2015, when the Fed, the FDIC and the OCC jointly issued a statement to “remind financial institutions of … Continue Reading

In waning hours of Obama administration, CFPB files first litigation against depository institution

In what might prove to be one of Richard Cordray’s final acts as Director of the Consumer Financial Protection Bureau, the Bureau announced on Thursday that it was suing TCF National Bank, a $21 billion depository institution, in federal court for practices involving TCF’s overdraft program.  This enforcement action marks the first time the Bureau … Continue Reading

Community Banks Share Compliance Officers

Over the past few years, banks have been forced to devote more resources to compliance and compliance personnel as the regulatory burdens on financial institutions have increased.  For large financial institutions, this generally means hiring additional compliance staff.  In 2014, The Wall Street Journal tagged compliance officers with the “the hottest job in America.” But, … Continue Reading

Post-Election Outlook for Financial Regulatory Agencies: U.S. Securities and Exchange Commission

Republican president-elect Donald J. Trump, with the support of a Republican controlled Senate and House of Representatives, promises to bring in a new era of limited government, rolling back legislation enacted under President Obama’s administration. This transition to a new administration will have a significant impact on each of the federal financial regulatory agencies, including … Continue Reading

Open APIs: CFPB Comments and Legal Issues to Consider

Another major bank recently announced the launch of an open application programming interface (or “API”) platform  through which it will grant third-party software developers access to its APIs for a number of use cases, including peer-to-peer payments, reward redemptions and account summary access.  The announcement comes on the heels of prepared remarks by Consumer Financial … Continue Reading

Smart Contracts: Opportunities and Legal Risks

Financial services companies, software developers and governments alike are exploring opportunities to automate a wide range of legacy processes using smart contracts and blockchain technology. What are smart contracts? Smart contracts are “computable” legal contracts that execute automatically (without verification by a third party) when a set of pre-programmed conditions are satisfied.  Unlike traditional legal … Continue Reading

The Future of Artificial Intelligence in Financial Services

On October 12, 2016, the White House released a report on the future of artificial intelligence and its potentially transformative impact on the economy and society.  Although the report does not focus on the application of artificial intelligence (AI) technologies in the financial services industry, it provides a helpful overview of the different categories of … Continue Reading
LexBlog