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Category Archives: Financial Institution Regulation

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Financial Institution Regulation

The CFPB Issues New Proposals Overhauling The Debt Collection Industry

On Thursday July 28, 2016, the Consumer Financial Protection Bureau (CFPB) released a series of proposals aimed at overhauling the debt collection business.  The new proposals require debt collectors to take additional steps to substantiate the accuracy of a debt, limit certain types of communications with consumers, and simplify dispute and litigation procedures. In prepared… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

CFPB’s Supervisory Highlights Regarding Auto Lending

The Consumer Financial Protection Bureau (“CFPB”) recently issued its Supervisory Highlights – Issue 12, Summer 2016 report, addressing, among other industries, automobile origination.  The report reflects supervisory activity generally completed between January 2016 and April 2016 and makes it clear that there is increased scrutiny and consumer complaint activity in the auto lending industry.  The… Continue Reading
Financial Institution Regulation

CFPB Issues Proposed Revisions to GLBA Annual Privacy Notice Requirement

Earlier this month, the Consumer Financial Protection Bureau (CFPB) issued its proposed rule amending the Gramm-Leach-Bliley Act’s annual privacy notice requirement set forth in Regulation P. The rule is in response to Congress’ December 2015 amendment to the act, which eliminated the need for certain companies to provide annual privacy disclosures to consumers.  Under the… Continue Reading
Compliance, Financial Institution Regulation

CFPB Proposes Rule on Small Dollar Lending

On June 2, 2016, the Consumer Financial Protection Bureau (“CFPB”) released its proposed rule on small dollar lending during its scheduled field hearing in Kansas City, Missouri. The controversial proposed rule will affect payday loans, single-payment vehicle title loans, deposit advance products, and certain-high cost loans. Under the proposed rule, lenders would be responsible for making… Continue Reading
Financial Institution Regulation

CFPB Sues Payment Processor for Facilitating Fraudulent Transactions

The CFPB sued payment processor Intercept Corporation, its owner, and its CEO on June 6, 2016, for allegedly enabling unauthorized withdrawals and other illegal activities of Intercept’s clients.  The complaint, filed in district court in North Dakota, accuses Intercept of processing transactions for its clients that it knew or “consciously avoided knowing” initiated fraudulent or… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

A Circuit Split is Born. Eleventh Circuit Rules Declaratory Relief and Disgorgement Sought by the SEC Are Subject to 5-Year Statute of Limitations. Injunctive Relief is Not.

On May 26th, the Eleventh Circuit held that declaratory relief and disgorgement sought by the SEC are subject to the 5-year statute of limitations under 28 U.S.C. § 2462, but injunctive relief is not.  The court’s holding that § 2462 applies to disgorgement creates two circuit splits:  one with the D.C. Circuit, which has held… Continue Reading
Compliance, Financial Institution Regulation

CFPB Announces Plan to Promulgate Key Mortgage Disclosure Rule

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray recently informed several banking and other industry groups that the Bureau plans to introduce a proposed rule to address concerns related to CFPB mortgage disclosure requirements. In an April 21, 2016 letter to several key industry groups, Cordray stated that the CFPB received feedback on the Know… Continue Reading
Compliance, Financial Institution Regulation

CFPB’s Proposal Marks Government’s Latest − and Largest − Step Regulating Arbitration Clauses

Last week at a field hearing in Albuquerque, New Mexico, the Consumer Financial Protection Bureau (CFPB) announced a proposed rule that would prohibit providers of certain consumer financial products and services from including arbitration provisions in consumer contracts that bar the consumer from filing or participating in a class action with respect to the product… Continue Reading
Compliance, Financial Institution Regulation

Marketplace Lenders May Be Supervised by CFPB in 2017

The Consumer Financial Protection Bureau (CFPB) plans to begin supervising online “peer-to-peer” or “platform” lenders as soon as late 2017, according to the Wall Street Journal. The Journal reported that this oversight is part of the agency’s previously announced intent to monitor the largest lenders offering small-dollar loans and lenders that offer loans secured by… Continue Reading
Compliance, Financial Institution Regulation

Senators Take Steps to Ban Arbitration Clauses in Telecommunications Contracts

On Thursday, April 28, 2016, Senators Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.) proposed legislation that would ban arbitration clauses in telecommunication service contracts. The proposed bill, the Justice for Telecommunications Consumers Act of 2016, would invalidate “any agreement to arbitrate a dispute that has not yet arisen at the time of the making of… Continue Reading
Financial Institution Regulation, Uncategorized

CFPB Accused of Discriminating Against Its Own Employees

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
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

CFPB’s First-Ever Data Security Enforcement Action

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
Financial Institution Regulation

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

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
Compliance, Financial Institution Regulation

CFPB Director Forecasts Rulemaking on Consumer Arbitration Clauses in American Constitution Society Speech

In the latest public pronouncement on the Consumer Financial Protection Bureau’s (CFPB’s) intention to engage in rulemaking to ban the use of certain arbitration clauses in consumer contracts – in particular, those that would limit consumer class relief – CFPB Director Richard Cordray recently elaborated on the CFPB’s goals in a speech to the American… Continue Reading
Financial Institution Regulation

CFPB Still Pushing to Regulate Payday Lenders

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
Financial Institution Regulation

CFPB Poised to Continue Focused Scrutiny of Indirect Auto Lenders

Earlier this month, the Consumer Financial Protection Bureau (CFPB) announced a joint enforcement action with the Department of Justice (DOJ) against Toyota Motor Credit Corporation (TMCC), an indirect auto lender, which, among other things, requires TMCC to pay $21.9 million in restitution to affected borrowers. Indirect auto lending is the most common type of auto… Continue Reading
Financial Institution Regulation, Securities and Commodities

FINRA Issues Sweep Letter on Firms’ Cultural Values

On February 18, 2016, Financial Industry Regulatory Authority (FINRA) announced that it had issued a targeted exam letter, or sweep, to firms seeking information about how firms establish, communicate and implement cultural values.  FINRA’s stated goal “is to better understand industry practices and determine whether firms are taking reasonable steps to properly establish and implement… Continue Reading

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