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THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS

Government Investigations and White Collar Litigation Group

Jodie Herrmann Lawson

Photo of Jodie Herrmann Lawson Jodie is a high-stakes litigator who represents clients in federal and state court and arbitrations. She defends Fortune 100 companies and other businesses in cases involving torts, contract disputes, property disputes, class actions, and fiduciary, energy, and financial services litigation.

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Debt Collector Defined: Supreme Court Exempts Debt Purchasers

By Jodie Herrmann Lawson, James C. Freije and Government Investigations Group on Financial Institution Regulation
On behalf of a unanimous Supreme Court, Justice Neil Gorsuch delivered his first opinion on June 12 to determine whether debt purchasers fall within the statutory language under the Fair Debt Collection Practices Act (FDCPA) as debt collectors. The Court determined that a company may collect debts that it purchased for its own account without… Continue Reading

Debt Collection Practices Under Scrutiny of CFPB and NY Attorney General

By Jodie Herrmann Lawson and Alec Covington on Enforcement and Prosecution Policy and Trends
On November 2, the Consumer Financial Protection Bureau (CFPB) and New York Attorney General filed a lawsuit in federal district court in New York over an alleged “massive, illegal debt-collection scheme” that supposedly involved improperly increased debts and threats of arrest or legal action against delinquent borrowers. Douglas MacKinnon and Mark Gray are accused of… Continue Reading

CFPB Director Cordray’s Remarks at FinTech Conference Highlight Focus on Increasing Access to Financial Data

By Jodie Herrmann Lawson on Financial Institution Regulation
Last Monday, October 24, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray spoke on the Bureau’s approach to FinTech at Money 20/20, a conference focused on payments and financial service innovation.  In his remarks, Cordray focused on responding to criticism of the CFPB’s enforcement actions against FinTech start-ups and appeared to warn large financial institutions… Continue Reading

At Long Last, CFPB Issues Final Rule on Prepaid Accounts

By Jodie Herrmann Lawson on Compliance, Financial Institution Regulation
The CFPB today finalized its rule on prepaid cards.  Over four years in the making, the final rule, which weighs in at nearly 1700 pages, provides “strong federal consumer protection for prepaid account users,” according to prepared remarks of CFPB Director Richard Cordray.  The final rule covers not only traditional “general purpose reloadable” cards, but… Continue Reading

California Court Hands CFPB a Noteworthy Victory Against CashCall, Inc.

By Jodie Herrmann Lawson on Enforcement and Prosecution Policy and Trends
In a closely watched case pending in the United States District Court for the Central District of California, the CFPB obtained a significant victory against CashCall Inc. (“CashCall”) and its affiliates.  The Court’s decision to grant the CFPB summary judgment on the issue of liability is noteworthy because it could have significant ramifications on a… Continue Reading

BancorpSouth Bank Agrees to Pay More Than $10 million to Settle Charges of Redlining and Discrimination in Mortgage Underwriting and Pricing

By Jodie Herrmann Lawson on Compliance, Enforcement and Prosecution Policy and Trends
On June 29, the Consumer Financial Protection Bureau (CFPB), the Department of Justice (DOJ), and BancorpSouth Bank (BancorpSouth) agreed to settle allegations of redlining and discrimination in violation of the Equal Credit Opportunity Act and the Fair Housing Act.  Notably, this case marks the second instance of the CFPB’s new approach to redlining analysis, which,… Continue Reading

Split Supreme Court Affirms Eighth Circuit Equal Credit Opportunity Act Ruling

By Jodie Herrmann Lawson on Financial Institution Regulation
“The judgment is affirmed by an equally divided Court.”  One sentence, published by the United State Supreme Court on March 22, 2016 sealed the fate of two plaintiffs seeking to expand protections under the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691 et seq., to allow spousal guarantors to bring claims against creditors for marital… Continue Reading

CFPB Accused of Discriminating Against Its Own Employees

By Jodie Herrmann Lawson on Financial Institution Regulation
Some of the recent items on the Consumer Financial Protection Bureau’s (CFPB) agenda have involved efforts to eliminate alleged discriminatory disparities amongst auto lenders and in connection with other private companies as well. However, the CFPB itself has been accused of discrimination under its own roof.  Specifically, the CFPB is accused of discriminatory pay between… Continue Reading

CFPB’s First-Ever Data Security Enforcement Action

By Jodie Herrmann Lawson on Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation
Earlier this month, the Consumer Financial Protection Bureau (CFPB) made headlines by bringing its first enforcement action in the data security space.  Dwolla, Inc., an Iowa-based online payment processor, was the CFPB’s target.  According to CFPB Director Richard Cordray, “With data breaches becoming commonplace and more consumers using these online payment systems, the risk to… Continue Reading

CFPB Announces Two-Year Policy Priorities

By Jeffrey M. Hanna and Jodie Herrmann Lawson on Compliance, Financial Institution Regulation
At the end of February 2016, the Consumer Financial Protection Bureau (CFPB) announced nine priority goals for the next two years.  According to its press release, the CFPB set these priorities by balancing the amount of consumer harm observed against the Bureau’s capacity to eliminate or mitigate that harm.  The CFPB identified three core tools… Continue Reading

With Final Rules on the Horizon, CFPB Highlights Prepaid Cards in Monthly Complaint Report

By Jodie Herrmann Lawson on Financial Institution Regulation
The Consumer Financial Protection Bureau (CFPB) highlighted prepaid cards in its most recent Monthly Complaint Report.  Prepaid card complaints make up only a small percentage of the complaints handled by the CFPB historically; however, they recently have been on the rise.  Of the 4,100 prepaid complaints handled by the CFPB since 2011, 35 percent have… Continue Reading

CFPB Still Pushing to Regulate Payday Lenders

By Jodie Herrmann Lawson on Financial Institution Regulation
Last month, Consumer Financial Protection Bureau (CFPB) acting Deputy Director David Silberman testified before a House subcommittee on the Bureau’s work related to short-term, small-dollar lending. In the face of skepticism and criticism, the CFPB maintains that changes to “payday” lending practices are needed. Silberman’s remarks to the House subcommittee largely focused on what the… Continue Reading

Recent Scrutiny of CFPB’s Complaint Database Foretells Problems for Businesses

By Alec Covington and Jodie Herrmann Lawson on Financial Institution Regulation
The Consumer Financial Protection Bureau’s (CFPB’s) consumer complaint database recently raised significant concerns from insiders at the CFPB as well as entities subject to the CFPB’s jurisdiction. In November 2015, the American Banker reported that the consumer complaint database “is riddled with errors and distrusted by some of its own employees, according to internal documents… Continue Reading

FAST Act Drives Long-Awaited Gramm-Leach-Bliley Amendment

By Ashley B. Matthews and Jodie Herrmann Lawson on Financial Institution Regulation
In late 2015, Congress passed the Fixing America’s Surface Transportation Act − a vehicle for an amendment to the Gramm-Leach-Bliley Act (GLBA) meant to eliminate the need for certain companies to provide annual privacy disclosures to consumers. The amendment, which took effect immediately, eliminates the annual notice requirement for financial institutions that: do not share… Continue Reading

The House Has Voted: Auto Lenders Prevail Over CFPB

By Brandon M. Santos and Jodie Herrmann Lawson on Enforcement and Prosecution Policy and Trends, Financial Institution Regulation
As we predicted, auto lenders scored a significant victory last week in opposing the Consumer Financial Protection Bureau’s (CFPB’s) efforts to regulate the auto financing industry.  House Resolution 1737, The Reforming CFPB Indirect Auto Financing Guidance Act, passed the House with bipartisan support in a vote of 332-96. To recap, the bill challenges the CFPB’s… Continue Reading

CFPB Supervisory Highlights

By Jodie Herrmann Lawson on Financial Institution Regulation
The Consumer Financial Protection Bureau (CFPB) recently released its ninth supervisory highlights report, which includes new findings from its supervisory program from May – August 2015.   Overall, the report focuses on examination of the student loan servicing, mortgage origination and servicing, consumer reporting, and debt collection markets. In addition, the report highlights the CFPB’s recent… Continue Reading

CFPB Report Addresses Use of Mobile Financial Services by Underserved Populations

By Jodie Herrmann Lawson on Financial Institution Regulation
On Wednesday, the Consumer Financial Protection Bureau (CFPB) issued a report regarding the use of mobile financial services (MFS) by underserved populations. The CFPB was clear that the report was not “intended to identify areas in which the Bureau may or will take regulatory, supervisory, or enforcement action.” Rather, it was intended to summarize comments… Continue Reading

CFPB Adopts New Rule Expanding Reporting Requirements under HMDA

By Jodie Herrmann Lawson on Financial Institution Regulation
On October 15, 2015, the Consumer Financial Protection Bureau (CFPB) released a final rule that expands the scope of mandatory reporting under the Home Mortgage Disclosure Act (HMDA). The new rule, which will be implemented in phases between 2017 and 2020, may prove costly for mortgage lenders. Originally enacted in 1975, HMDA requires lenders to… Continue Reading

CFPB Redlining Enforcement Action Reflects New Approach to Redlining Analysis

By Jodie Herrmann Lawson on Financial Institution Regulation
On October 1, 2015, McGuireWoods reported on the mortgage redlining settlement entered into by Hudson City Savings Bank, F.S.B. (Hudson City), the Consumer Financial Protection Bureau (CFPB), and the Department of Justice (DOJ). Aside from the significant costs imposed on Hudson City under the consent order, the action also illustrates the CFPB’s revised approach to… Continue Reading

Congress Pushes for CFPB Transparency

By Jodie Herrmann Lawson on Financial Institution Regulation
On September 30, 2015, the House Financial Services Committee passed with bipartisan support two bills that would have significant impact on the accountability and transparency of the Consumer Financial Protection Bureau (CFPB). 1.  The Bureau of Consumer Financial Protection-Inspector General Reform Act of 2015 H.R. 957 would create an independent inspector general for the CFPB… Continue Reading

CFPB Proposes Banning Some Arbitration Clauses, Resurrecting Consumer Contract Class Actions

By Jodie Herrmann Lawson and Government Investigations Group on Financial Institution Regulation
On October 7, 2015, the Consumer Financial Protection Bureau (CFPB) announced that it is exploring a rulemaking to eliminate the use of certain arbitration agreements in consumer contracts that block consumers from participating in class-action lawsuits. If enacted, the new rule will impact companies that fall within the CFPB’s broad interpretation of businesses that provide… Continue Reading

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