In an article published in the Review of Banking & Financial Services, Covington partner Ashley M. Simonsen argues that “true lender” theories asserted in litigation to invalidate bank–fintech partnerships are inconsistent with federal law, and would chill the market for interstate lending. The article also suggests that both Congress and the federal banking regulators should … Continue Reading
On December 19, 2019, the Office of the Comptroller of the Currency (OCC) appealed a decision from the U.S. District Court for the Southern District of New York holding that the OCC cannot offer special purpose national bank charters to fintech companies. Lacewell v. Office of the Comptroller of the Currency, Case 1:18-cv-08377 (S.D.N.Y. Sept. … Continue Reading
The U.S. Government’s fiscal year-end filing rush has resulted in a wave of new spoofing enforcement. In August, the Fraud Section of the Department of Justice’s (“DOJ”) Criminal Division charged four individuals with spoofing in precious metals futures markets. In September, the Commodity Futures Trading Commission (“CFTC”) brought overlapping charges against three of those individuals, … Continue Reading
On September 17, Consumer Financial Protection Bureau (“CFPB”) Director Kathleen Kraninger sent letters to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell stating that the CFPB “has determined that the for-cause removal provision of the Consumer Financial Protection Act . . . is unconstitutional.” The Bureau now affirms that the for-cause removal provision … Continue Reading
As we turn the page on the summer, the Consumer Financial Protection Bureau is poised to be active – and actively overseen – in the months ahead. Here’s an overview of some of the issues and events ahead. … Continue Reading
On August 14, 2019, the U.S. District Court for the Northern District of Illinois entered a consent order (the “Consent Order”)—agreed to by the U.S. Commodity Futures Trading Commission (the “CFTC”), Kraft Foods Group Inc. (“Kraft”) and Mondelēz Global LLC (“Mondelēz”)—to resolve long-running market manipulation litigation between the parties.… Continue Reading
England’s Court of Appeal has decided that the Competition Appeals Tribunal (the “CAT”) erred in rejecting certification of former financial ombudsman Walter Merricks’ class action against MasterCard, for £14 billion. As a result, the CAT will now reconsider whether to certify the class. The decision has lowered the bar that will need to be cleared … Continue Reading
On January 9, 2019, a divided three-judge panel of the Ninth Circuit held that the Federal National Mortgage Association, or Fannie Mae, is not a “consumer reporting agency” within the meaning of the Fair Credit Reporting Act (the “FCRA”). The case, Zabriskie v. Federal National Mortgage Association, was brought by prospective borrowers who were unable … Continue Reading
On October 25, 2018, the Conference of State Bank Supervisors (“CSBS”) filed a complaint in the United States District Court for the District of Columbia to stop the Office of the Comptroller of the Currency (“OCC”) from issuing special purpose national bank charters to fintech companies. The lawsuit follows a similar suit against the OCC by … Continue Reading
On October 9, 2018, Grovetta Gardineer, the Office of the Comptroller of the Currency’s (“OCC’s”) senior deputy comptroller for compliance and community affairs, reaffirmed the OCC’s willingness to accept applications from fintech companies seeking a special purpose national bank charter and grant such applications if the application meets certain requirements. These remarks, which were made … Continue Reading
On September 14, 2018, Superintendent of the New York State Department of Financial Services (“NYSDFS”) Maria T. Vullo filed a complaint in federal court against the U.S. Office of the Comptroller of the Currency (“OCC”) to block the OCC from issuing any special purpose national bank (“SPNB”) charters. The OCC announced last month, after much … Continue Reading
A recent United States Supreme Court case and new executive order will change the way federal agencies hire administrative law judges (“ALJs”), and together are expected to increase ALJs’ accountability to the heads of their agencies. On June 21, 2018, the United States Supreme Court held in Lucia v. Securities and Exchange Commission that the … Continue Reading
On June 21, 2018, U.S. District Judge Loretta A. Preska (S.D.N.Y.) ruled that the structure of the Bureau of Consumer Financial Protection (the “Bureau”) was unconstitutional and, therefore, the Bureau lacked authority to bring claims under the Consumer Financial Protection Act (“CFPA”). The ruling rejected the D.C. Circuit’s en banc opinion in PHH that upheld … Continue Reading
On Wednesday, April 18th, the SEC introduced a much-anticipated package of proposed rules and formal guidance concerning the standards of conduct for financial professionals. The more than 1,000-page proposal, which emerged eight years after Congress required the agency to conduct a study on the topic, addresses whether investment advisers and broker-dealers should have identical or … Continue Reading
The Consumer Financial Protection Bureau (the “Bureau” or “CFPB”) has made its first major organizational change under the leadership of Acting Director Mick Mulvaney. The Bureau moved the Office of Fair Lending and Equal Opportunity (the “Fair Lending Office”) inside the Office of the Director and stripped it of responsibility for enforcement and day-to-day oversight … Continue Reading
On January 3, 2018, in Italian Colors Restaurant v. Becerra, No. 15-15873, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit invalidated an application of a California law that would prohibit merchants from imposing a surcharge on credit card payments. The California law would allow offering discounts for payments by other … Continue Reading
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
On September 29, 2017, a coalition of bank and trade associations filed a federal court challenge to the Consumer Financial Protection Bureau’s (“CFPB” or the “Bureau”) arbitration rule. The industry group plaintiffs allege that the arbitration rule is illegal on four grounds, including that the CFPB’s actions are unconstitutional, and that the Bureau violated the … Continue Reading
On September 8, 2017, the U.S. District Court for the Northern District of California entered an order granting a civil penalty and injunctive relief in a CFPB case against mortgage loan servicer Nationwide Biweekly Administration, Inc. (“Nationwide”), its wholly-owned subsidiary Loan Payment Administration, and the principal of Nationwide. In its suit, the CFPB alleged that the … Continue Reading
See our article in Law360, A Pro-Consumer, Pro-Arbitration Approach At the CFPB, regarding the CFPB’s arbitration rule, which Congress is weighing whether to overturn pursuant to the Congressional Review Act.… Continue Reading
On August 25, 2017, a federal judge for the U.S. District Court for the District of Georgia dismissed five payment processor defendants from a CFPB lawsuit, following what the Court described as the repeated failure by the Bureau to follow court discovery orders. In particular, the Bureau refused to provide factual evidence supporting the elements of … Continue Reading
Earlier this week, the Consumer Financial Protection Bureau published a final rule substantially curtailing the ability of financial services providers and consumers to enter into voluntary pre-dispute arbitration clauses. The final rule, like the proposed rule that preceded it, would i) prevent financial services providers from including arbitration clauses in consumer contracts unless those arbitration … Continue Reading
On June 21, 2017, a federal district court judge referred to a magistrate the Consumer Financial Protection Bureau’s (“CFPB”) first attempt to obtain a contempt finding against a subject who allegedly failed to comply with a civil investigative demand (“CID”). The matter arrived in district court in November 2016, when the CFPB first sought judicial … Continue Reading
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
