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Category Archives: Financial Institution Regulation

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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
Financial Institution Regulation

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

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
Financial Institution Regulation

CFPB Compliance Bulletin Outlines Requirements for Automatic Debit Authorization

On November 23, 2015, the Consumer Financial Protection Bureau (CFPB) issued a Compliance Bulletin reminding covered entities of their obligations under the Electronic Fund Transfer Act (EFTA) and Regulation E to obtain consumer authorization before automatically debiting a consumer’s account for preauthorized electronic funds transfers (EFTs). Before issuing the Bulletin, the CFPB observed that some… Continue Reading
Financial Institution Regulation

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

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
Compliance, Financial Institution Regulation, Securities and Commodities

SEC Provides Guidance on 2016 Examination Areas of Focus

On Monday, January 11, 2016, the Securities and Exchange Commission (SEC) announced its Office of Compliance Inspections and Examinations’ (OCIE) areas of focus for 2016, which include: protecting retail investors and investors for retirement; assessing issues related to market-wide risks; and use of its ability to analyze data to identify and examine registrants that may… Continue Reading
Anti-Money Laundering, Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims

FinCEN Announces First Card Club AML Enforcement Action

Just in time for Christmas, the Financial Crimes Enforcement Network (FinCEN), the financial industry (including casinos and card clubs) regulator, announced its first-ever enforcement action against a card club, California’s Oaks Card Club (Oaks). The enforcement action, which carried a penalty of $650,000, is the latest in a string of actions against gaming enterprises and is… Continue Reading
Financial Institution Regulation

Challenging a CFPB Civil Investigative Demand Can Be Done without Revealing a Company Is Being Investigated

One of the Consumer Financial Protection Bureau’s (CFPB) key investigative and enforcement tools is to issue Civil Investigative Demands (CIDs), a form of an administrative subpoena that requires the recipient to produce documents or provide testimony.  The Bureau’s authority to issue CIDs is one of its most powerful weapons in its arsenal, and often a… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

The House Has Voted: Auto Lenders Prevail Over CFPB

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
Compliance, Financial Institution Regulation, Immigration and Worksite Enforcement

Proposed Changes to Form I-9 Create New Compliance Questions

Employers take note: a new Form I-9 is in the making.  U.S. Citizenship and Immigration Services (USCIS), part of the Department of Homeland Security, announced on November 24, 2015, that it is seeking public comment on the various proposed changes.  The proposed changes will have far-reaching impact because all employers are required to complete and… Continue Reading
Financial Institution Regulation

Challenge to CFPB’s Auto Lending Guidance

A bipartisan bill, House Resolution 1737, which the U.S. House of Representatives will be voting on this week, seeks to nullify the Consumer Financial Protection Bureau’s (CFPB’s) guidance to indirect auto lenders. Specifically, the goal of the legislation is to: (1) impose a public notice and comment period prior to issuing the final guidance; (2)… Continue Reading
Financial Institution Regulation

CFPB Takes Action Under FCRA Against Employment Background Check Providers

On October 29, 2015, the Consumer Financial Protection Bureau (CFPB) announced the settlement of an enforcement action against two of the country’s largest employment background screening report providers for failing to comply with provisions of the Fair Credit Reporting Act (FCRA). The two companies at issue collectively generate and sell more than 10 million reports… Continue Reading
Financial Institution Regulation

CFPB Supervisory Highlights

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
Financial Institution Regulation

FTC Unveils Nationwide Debt-Collection Enforcement Effort

The Federal Trade Commission (FTC) on Wednesday announced that it would launch its first-ever coordinated, nationwide law enforcement effort targeting abusive and deceptive debt-collection practices. The initiative is known as Operation Collection Protection, and will combine federal, state and local resources across the country to crack down on debt-collection practices the FTC deems unlawful. The… Continue Reading
Financial Institution Regulation

CFPB Report Addresses Use of Mobile Financial Services by Underserved Populations

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
Financial Institution Regulation

CFPB’s Cordray Issues Warning to Vendors

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray recently issued a warning to mortgage technology vendors for a lack of compliance with the CFPB’s TILA-RESPA Integrated Disclosure (TRID) Rule. Addressing the Mortgage Bankers Association’s Annual Convention and Expo, Cordray said he was “disturbed” by vendors’ lack of effort to implement the rule, despite having had… Continue Reading

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