Photo of Nikhil Gore

A member of the international arbitration and financial institutions practices, Nikhil V. Gore represents sovereign states and U.S. and global firms in international treaty-based and commercial disputes. He also regularly represents U.S. financial institutions, and the U.S. branches and affiliates of foreign financial institutions, in investigations and inquiries involving the Federal Reserve, OCC, FDIC, CFPB, and state banking regulators.

Mr. Gore has served as counsel in investment and commercial arbitrations spanning several industries and a variety of regions, including Asia, Eastern Europe, North America, and Southern Africa. Additionally, he has expertise in the law of the sea, and was part of the Covington team that secured an order from the International Tribunal for the Law of the Sea, which required Russia to release three Ukrainian naval vessels and twenty-four servicemen detained in the Black Sea in 2018.

In his financial institutions practice, Mr. Gore has experience with enforcement actions and investigations relating to the Bank Secrecy Act, the federal criminal money laundering statutes, the full range of safety and soundness issues (including, in particular, supervisory reviews of bank control functions), and fair lending and consumer compliance. Mr. Gore is a regular contributor to the firm’s financial services blog.

The Bureau of Consumer Financial Protection announced earlier this week that it would join ten non-US financial regulators in an alliance, called the Global Financial Innovation Network (GFIN), to encourage the growth of fintech — and, potentially, create a “global sandbox” for financial innovation.

The alliance was initially proposed, in February 2018, by the UK’s

In a little noticed, but important, speech, the Federal Reserve’s Vice Chairman for Supervision, Randal K. Quarles, reaffirmed late last month that the Fed remains committed to continued collaboration with international financial regulators.

International cooperation through, for example, the Basel Committee and the Financial Stability Board (FSB), has been a key pillar of post-financial

FinCEN’s Customer Due Diligence Rule for Financial Institutions (the “CDD Rule”) became effective yesterday.  The rule, which was published by FinCEN on May 2016 (and slightly amended on September 29, 2017) is described in this Covington client alert.  It requires covered financial institutions to: (i) adopt due diligence procedures to identify and verify a legal entity customer’s beneficial owners at the time a new account is opened and (ii) establish risk-based procedures for conducting ongoing customer due diligence, including developing customer risk profiles and implementing ongoing monitoring to identify and report suspicious activity and, on a risk basis, updating customer information.

In the months leading up to the CDD Rule’s effective date, FinCEN, the FFIEC and other agencies released a number of documents that provide practical guidance on its implementation.  Those include:

  • Two new sections of the FFIEC’s BSA/AML Examination Manual, which focus on the CDD Rule and were publicly circulated yesterday in the form of an FDIC Financial Institution Letter.  This document will be used by federal bank examiners at the Fed, the OCC, the FDIC and the NCUA to guide their examination and supervision of financial institutions for compliance with the CDD Rule.
  • A FinCEN FAQ document, which was updated last month.  The updated FAQs — which supplement FAQs issued in July 2016 — address questions related to the CDD Rule’s identification and verification requirements and the Rule’s application to legal entity customers with complex ownership structures, among other issues.
  • A Regulatory Notice released by FINRA at the end of last year, which provides guidance on the application of the CDD Rule to broker-dealers.


Continue Reading Customer Due Diligence Rule — Key Practical Resources

The Federal Financial Institutions Examination Council (FFIEC) released yesterday data on mortgage lending at institutions covered by the Home Mortgage Disclosure Act (HMDA) — a total of just under 6,000 banks, credit unions and non-bank mortgage lenders.  Concurrently, the Consumer Financial Protection Bureau (CFPB) released a “first look” report on mortgage market activity and trends based on a selection of the newly released data.

As the CFPB points out, this year’s release is notable for two reasons, among others:

  • First, it reflects recent changes to the CFPB’s Regulation C, which generally exempted institutions from HMDA reporting if, in either of the two preceding calendar years, they originated less 25 reportable home purchase loans (including refinancings).  This contributed to a modest 13% decline in the number of participating institutions.  (We previously discussed other aspects of the CFPB’s amendments to Regulation C, including in these posts.)
  • Second, it reflects the first year during which HMDA data will be available in a dynamically updated format through the FFIEC HMDA Platform.


Continue Reading Release of 2017 HMDA Data

The Consumer Financial Protection Bureau (the Bureau) announced today the eighth in a series of at least twelve broad Requests for Information (RFIs) seeking public comment on a range of Bureau activities and practices. Today’s RFI, on rulemaking by the Bureau, seeks comments and information on whether the Bureau should:

  • amend any rules that the Bureau has issued since its creation; or
  • issue new rules under its statutory rulemaking authorities.

The RFI is focused on the substance of Bureau rules, and not the Bureau’s rulemaking process — which is the subject of a separate RFI. Moreover, it is limited to rules adopted, or to be adopted, by the Bureau since its creation in 2011. Another RFI, to be issued in the coming weeks, will seek comment on rules issued by other agencies and inherited by the Bureau in 2011, when the Bureau assumed responsibility for the enforcement of enumerated consumer laws previously administered by other Federal banking agencies.

Continue Reading CFPB RFI on Regulations Adopted Since its Establishment in 2011, and on New Regulations

A recent poll — conducted by Lake Research Partners and Chesapeake Beach Consulting on behalf of Americans for Financial Reform and the Center for Responsible Lending — appears to show substantial public support for the Consumer Financial Protection Bureau (CFPB) and a number of its recent regulatory initiatives.  The published poll results reflect, among other things, that:

  • 91% of Americans believe that it is important to “regulate financial services and products to make sure they are fair for consumers,” and substantial majorities support “tougher rules and enforcement” and increased regulation of financial companies;
  • 74% of Americans support the 2010 Dodd-Frank act, and an almost equal number (73%) support the CFPB; and
  • Most Americans support recent CFPB regulatory initiatives, including the CFPB’s ban on mandatory pre-dispute arbitration clauses in contracts for consumer financial services (66%).

This last result is particularly notable, as it could influence Congressional willingness to overrule the Bureau’s arbitration rule pursuant to the Congressional Review Act (see our client alert, at page 3, for more details).

But the poll’s results are not as unambiguous as they seem at first glance, and policymakers should be cautious in relying on them.  Some of the support for the CFPB and CFPB policies reflected in the results could be ascribed to the way the pollsters asked their questions.

Continue Reading Public Support for the CFPB and its Arbitration Rule — Is The Evidence Clear?

In remarks on Wednesday before the Exchequer Club in Washington, Acting Comptroller of the Currency Keith Noreika responded to State regulators and consumer advocates who have criticized the OCC’s proposed special purpose fintech charter (the proposed charter is discussed in this Covington client alert).

Acting Comptroller Noreika’s comments on the fintech charter reflect an

In its decision in Kokesh v. SEC, issued on Monday, June 5, 2017, the Supreme Court unanimously ruled that “disgorgement” of ill-gotten gains by the Securities and Exchange Commission (“SEC”) is a “penalty” within the meaning of 28 U.S.C. § 2462.  As a result, disgorgement is unavailable to the SEC in judicial proceedings involving conduct that took  place more than five years before the filing of the government’s complaint.  As explained below, because Section 2462 is a statute of general application (i.e., not specific to the SEC), the Court’s ruling could have implications for judicial civil penalty proceedings brought by the Consumer Financial Protection Bureau (“CFPB”), the Federal Trade Commission (“FTC”), the Commodity Futures Trading Commission (“CFTC”), and other financial and consumer regulators.

Continue Reading Kokesh v. SEC and Implications for Consumer and Financial Regulatory Agencies

The House of Representatives voted this afternoon to pass the Financial CHOICE Act (“CHOICE 2.0”), its comprehensive financial regulatory reform bill.  The key provisions of CHOICE 2.0 are summarized in our client alert of April 24, 2017, available here, although the bill has evolved somewhat since April.  As we wrote late last month, Representative