Covington Financial Services

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Intellectual Property Issues in Blockchain and FinTech

FinTech and blockchain technologies are rapidly developing. With the emergence of so many new ideas and technologies comes the need for action, to protect both current and future innovations. Given the pace at which technology continues to disrupt the industry, securing IP assets—especially patents—should be a primary consideration for companies in this space. As the … Continue Reading

With New CFTC Commissioners Onboard, Major CFTC Rulemakings Likely to Follow this Fall

On August 29, 2018, the U.S. Senate confirmed Dawn Stump and Dan Berkovitz as Commissioners of the Commodity Futures Trading Commissioner (“CFTC” or “Commission”). Each has extensive experience in the derivatives markets. Ms. Stump, among other things, has served as Executive Director and Senior Vice President of U.S. Policy for the Futures Industry Association. Mr. … Continue Reading

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

Judge Denies Request to Stay Payday Rule Compliance Date

On June 12, 2018, a federal judge in the Western District of Texas denied a joint motion by the Bureau of Consumer Financial Protection (“Bureau”), the Community Financial Services Association of America, Ltd. (“Community Financial Services Association”) and the Consumer Alliance of Texas (“Consumer Alliance”), to stay the compliance date of the substantive provisions of … Continue Reading

CFPB Issues Request For Information on Civil Investigative Demands

On January 24, 2018, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) published a Request for Information (“RFI”) on its civil investigative demand (“CID”) process. This is the first in a series of planned RFIs on the Bureau’s activities. In the RFI, the CFPB recognizes that “responding to a CID can impose burdens on … 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

CFPB Director Cordray Delivers Remarks at Consumer Advisory Board Meeting

On November 2, 2017, Consumer Financial Protection Bureau (“CFPB” or “Bureau”) Director Richard Cordray delivered remarks at a meeting of the Consumer Advisory Board in Tampa, Florida. Director Cordray’s remarks touched on the following issues: Reverse Mortgages: Noting that Florida is home to millions of senior Americans, Director Cordray discussed reverse mortgages, a financial product … Continue Reading

CFTC Further Delays Swap Dealer De Minimis Threshold Drop

On October 26, 2017, the Commodity Futures Trading Commission (“CFTC”) issued an order postponing the automatic lowering of the swap dealer de minimis threshold. Instead of dropping from $8 billion in notional value (measured over the prior 12-month period) to $3 billion on December 31, 2018, which would have required firms to begin tracking swap … Continue Reading

As New Commissioners Come Onboard, CFTC Can Begin Moving Forward

For nearly six months following former Chairman Timothy G. Massad’s resignation from the Commodity Futures Trading Commission (“CFTC”), the CFTC operated with only two commissioners, current Chairman J. Christopher Giancarlo and Commissioner Sharon Y. Bowen. Even with only two commissioners, the CFTC was able to undertake several regulatory initiatives, including Project KISS, an effort towards … Continue Reading

CFTC Approves Registration of Bitcoin Platform LedgerX

On July 6, 2017, the Commodity Futures Trading Commission (“CFTC”) announced that it had granted LedgerX registration as a swap execution facility (“SEF”).  LedgerX is a platform that will trade and clear options on bitcoin. LedgerX has also applied to become a derivatives clearing organization.  If approved, LedgerX “would be the first federally regulated bitcoin … 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 Acting Chairman Makes Budget Request

On June 8, 2017, Acting Chair J. Christopher Giancarlo of the Commodity Futures Trading Commission (“CFTC”) made his request for the CFTC’s budget for fiscal year 2018 (“FY 2018”) to the House Appropriations Committee Subcommittee on Agriculture, Rural Development and Related Agencies (“Subcommittee”).  Acting Chair Giancarlo is seeking an increase in the CFTC’s budget from … 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

CFPB Director Richard Cordray Spars with Republicans at House Financial Services Committee Hearing

On April 5, 2017, the House Financial Services Committee held a hearing at which Consumer Financial Protection Bureau (“CFPB”) Director Richard Cordray was the sole witness.  During the five hours of the hearing, a wide partisan split over the performance of the CFPB  and Director Cordray  was on full display.  Throughout, Republicans characterized the CFPB … 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

CFPB Releases Supervisory Report Focused on Improvements in Credit Reporting

On March 2, 2017 the Consumer Financial Protection Bureau (“CFPB”) released a “special edition” supervisory report that focused on improvements made in the credit reporting industry since the CFPB began supervising the industry in 2012.  This report follows on the heels of the monthly complaints report the CFPB released on March 1, 2017, which also … Continue Reading
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