Barbara S. Mishkin

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We are pleased to report that Ballard Spahr’s Consumer Financial Services Group has once again received the highest national ranking from Chambers USA: America’s Leading Lawyers for Business.  The Group was ranked in the highest tier nationally in the Compliance category of Financial Services Regulation: Consumer Finance.  The Group was also ranked nationally in the categories of Litigation and Enforcement & Investigations.… Continue Reading

At the end of March 2023, the CFPB issued its long-awaited final rule to implement Section 1071 of the Dodd-Frank Act.  Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses. … Continue Reading

Our discussion looks at the role of in-house and outside counsel in the development and launch of new consumer financial products.  We first discuss the range of issues to be considered as part of the preliminary scoping process, including state licensing, marketing, underwriting, servicing, and collection issues.  We turn next to the process of addressing potential legal obstacles and problems that are identified in scoping, including what consideration should be given to competitors’ approaches and when consultation with regulators should be considered. … Continue Reading

The consumer financial services industry has become the target of increasing regulatory scrutiny under antitrust laws as well as class action antitrust litigation that challenges industry practices on the grounds that they undermine competition.  We first provide an overview of the federal antitrust laws, discuss the Biden Administration’s focus on competition, and the wide remedies available under antitrust laws. … Continue Reading

The U.S. Supreme Court has agreed to review the Fifth Circuit decision in CFSA v. CFPB that held the CFPB’s funding violates the Appropriations Clause of the U.S. Constitution.  After reviewing the history of the case from its initial filing to the Supreme Court’s grant of certiorari, we discuss the Fifth Circuit’s interpretation of the Appropriations Clause and the Second Circuit’s conflicting interpretation in its recent decision holding that the CFPB’s funding is constitutional and assess the strength of each interpretation and the reasoning of each decision. … Continue Reading

Third-party debt collectors, first-party creditors, and debt buyers face an ever-evolving federal and state regulatory landscape as well as ongoing private litigation.  We first look at the impact of the CFPB’s most recent rulemaking agenda on debt collectors.  We then discuss compliance and licensing issues under District of Columbia, California, Utah, and New York debt collection laws and the Wyoming “debt buyer” licensing requirement. … Continue Reading

Our discussion focuses on generative artificial intelligence, a new and emerging category of AI.  We first discuss what generative AI is, its use of large language models, and the role of supervised training in developing generative AI models.  We then discuss the potential benefits and limitations of generative AI in the following use cases in the consumer finance industry: marketing, fraud management, underwriting, collections, customer service, and back office functions. … Continue Reading

Professor Willis advocates the adoption of a performance-based approach to regulation to replace or supplement the current approach of disclosure and design regulation.  We first discuss how benchmarks would be used in a performance-based approach and discuss the shortcomings of the current disclosure and design approach as well as behavioral economics in designing regulations. … Continue Reading

The CFPB and FTC have targeted the use of “dark patterns” on websites to influence consumer behavior.  We first discuss what regulators consider to be dark patterns and why they are a focus of  regulatory concern and look at examples.  We then discuss the empirical issues and behavioral theories a company should expect regulators to raise if it is the target of a dark patterns investigation or enforcement action, what proactive steps a company can take to reduce the risk of a dark patterns challenge and the role of A/B testing, the practices most likely to be the focus of future dark pattern challenges by regulators, and principles to consider when designing online interactions with consumers so as to avoid potential dark patterns.… Continue Reading

In light of ongoing events concerning the recent bank failures and the response of regulators, we are releasing this week’s podcast episode earlier than our regular Thursday release date. 

After reviewing the circumstances leading to the failure of SVB and historic parallels, we discuss the merits of the regulators’ decision to invoke the Systemic Risk Exception and protect all SVB deposit accounts, notwithstanding the $250,000 FDIC insurance limitation, alternate approaches that regulators might have considered for protecting uninsured funds, and the Fed’s creation of the Bank Term Funding Program to make available additional funding to eligible depository institutions. … Continue Reading