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The third location of PLI’s 23rd Annual Consumer Financial Services Institute will take place in PLI’s San Francisco Conference facility and via concurrent live Webcast on June 25-26, 2018.  This will be the first time in many years that the Institute will take place in San Francisco.  Since the first location of this event in NYC on March 26-27 was well-attended, and the second location in Chicago on May 7-8 was sold-out, anyone interested in attending the program in San Francisco is encouraged to act quickly to register.  I am co-chairing the event, as I have for the past 22 years.

With the resignation of former CFPB Director Cordray and President Trump’s appointment of Mick Mulvaney as CFPB Acting Director, the agenda and activity of the CFPB is already undergoing significant change.  Further significant change can be expected under the new permanent Director who is eventually appointed and confirmed.  At the same time, state attorneys general and regulators are threatening to fill any void created by a less aggressive CFPB.

As was the case last year, the lead-off morning presentation on the first day will feature a panel discussion devoted to CFPB developments.  I am very pleased that in San Francisco, the panel will feature two CFPB attorneys: Christopher J. Young, Deputy Assistant Director for Supervision, and Cara Petersen, Principal Deputy Enforcement Director.  The CFPB attorneys will respond to a wide-ranging list of questions about the CFPB’s supervisory, enforcement, and other activities.  During this same panel,  I will moderate a discussion among two experienced industry lawyers and an experienced consumer lawyer who closely follow the CFPB’s activities.  If your practice involves the CFPB, you will not want to miss the entire panel discussion.

The first day of the program will also include a  panel titled “Federal Regulators Speak: Priorities & Coordination” that will feature representatives of the FTC and DOJ.

New to the Institute this year will be a panel on the second day that will discuss the rapidly changing landscape for marketplace lending and fintech.  My partner Scott Pearson will be a member of the San Francisco panel and I will moderate.

The Institute will also focus on a variety of other cutting-edge issues and developments, including:

  • Privacy and data security issues
  • FCRA/debt collection issues
  • Class action and litigation developments
  • State regulatory and enforcement developments
  • Plaintiff lawyers’ perspective of regulatory and litigation issues under Trump Administration

In addition, attendees will receive up to one full hour of Ethics credit exploring ethical issues unique to the consumer space.

Click here for a complete description of PLI’s 23rd Annual Consumer Financial Services Institute and to reserve your seat today.  A special discounted registration fee will only be available to persons who register using this link.

The second presentation of the 23rd Annual Consumer Financial Services Institute, sponsored by the Practising Law Institute, will take place in Chicago on May 7-8, 2018.  I am co-chairing the event, as I have for the past 22 years.

Hundreds of people attended the first presentation in NYC, live and on the web, on March 26-27, 2018.  The live Chicago program has reached its seating capacity but names are being taken for a wait list.  Registration is still open for the San Francisco program where, for the first time in many years, the Institute will be presented on June 25-26, 2018 (and by webcast).  Anyone interested in attending is encouraged to act quickly to register.

With the resignation of former CFPB Director Cordray and President Trump’s appointment of Mick Mulvaney as CFPB Acting Director, the agenda and activity of the CFPB is already undergoing significant change.  Further significant change can be expected under the new permanent Director who is eventually appointed and confirmed.  At the same time, state attorneys general and regulators are threatening to fill any void created by a less aggressive CFPB.

As was the case last year, the lead-off morning session on the first day will feature a panel discussion devoted to CFPB developments.  I am very pleased that in Chicago, the first segment of this almost two-hour program will feature two senior CFPB attorneys: Kristen Donoghue, Enforcement Director, and Allison Brown, Deputy Assistant Director for Servicing.  The CFPB attorneys will respond to a wide-ranging list of questions about the CFPB’s  supervisory, enforcement, and other activities.

In the second segment of the Chicago program, I will moderate a discussion among two experienced industry lawyers (one of whom will be my partner Chris Willis) and an experienced consumer lawyer who closely follow the CFPB’s activities.  If your practice involves the CFPB, you will not want to miss this panel discussion.

The first day will also include a one-hour panel titled “Federal Regulators Speak: Priorities & Coordination” that will feature representatives of the FTC and DOJ who will be joined in Chicago by former Acting Comptroller of the Currency, Keith Noreika.  In San Francisco, the FTC and DOJ representatives will be joined by a FDIC representative.

New to the Institute this year will be a panel on the second day that I will moderate and that will discuss the rapidly changing landscape for marketplace lending and fintech.  My partner Scott Pearson will be part of the San Francisco panel.

The Institute will also focus on a variety of other cutting-edge issues and developments, including:

  • Privacy and data security issues
  • FCRA/debt collection issues
  • Class action and litigation developments
  • State regulatory and enforcement developments
  • Plaintiff lawyers’ perspective of regulatory and litigation issues under Trump Administration

Click here for a complete description of PLI’s 23rd Annual Consumer Financial Services Institute.

If you wish to be added to the waiting list for the Chicago program, please call PLI Customer Service at (800) 260-4PLI (Inside the U.S.) /001-212-824-5700 (Outside the U.S.), or email info@pli.edu.  Please mention the special 25 percent discounted registration fee available to our blog readers.

The special discounted registration fee will also be available to persons who register for the San Francisco program using this link.

 

 

The 23rd Annual Consumer Financial Services Institute, sponsored by the Practising Law Institute, will take place on March 26-27, 2018, in New York City (and by live webcast and groupcast in Atlanta, Cleveland, and New Brunswick, New Jersey); and on May 7-8, 2018, in Chicago.  For the first time in many years, on June 25-26, 2018, the Institute will also be presented in San Francisco (and by live webcast).

This year’s Institute will explore in detail a number of important developments in consumer financial services regulation and litigation. I am again co-chairing the event, as I have for the past 22 years.

With the resignation of former CFPB Director Cordray and President Trump’s appointment of Mick Mulvaney as CFPB Acting Director, the agenda and activity of the CFPB is already undergoing significant change.  Further significant change can be expected under the new permanent Director who is eventually appointed and confirmed.  At the same time, state attorneys general and regulators are threatening to fill any void created by a less aggressive CFPB.

As was the case last year, the lead-off morning session on the first day will feature a panel discussion devoted to CFPB developments. During that almost two-hour program, I will moderate a discussion among experienced industry lawyers (one of whom will be my partner Chris Willis at the New York and Chicago programs) and consumer lawyers who closely follow the CFPB’s regulatory, supervisory, and enforcement activities.  If your practice involves the CFPB, you will not want to miss this panel discussion.

The first day will also include a one-hour panel titled “Federal Regulators Speak: Priorities & Coordination” that will feature representatives of the FTC and DOJ who will be joined in New York and Chicago by former Acting Comptroller of the Currency, Keith Noreika.  In San Francisco, the FTC and DOJ representatives will be joined by a FDIC representative.

New to the Institute this year will be a panel on the second day that will discuss the rapidly changing landscape for marketplace lending and fintech.  My partner Scott Pearson will be part of the San Francisco panel.

The Institute will also focus on a variety of other cutting-edge issues and developments, including:

  • Privacy and data security issues
  • FCRA/debt collection issues
  • Class action and litigation developments
  • State regulatory and enforcement developments
  • Plaintiff lawyers’ perspective of regulatory and litigation issues under Trump Administration

We hope you can join us for this informative and valuable program.  PLI has made a special 25 percent discounted registration fee available to those who register using the link that follows.  To register and view a complete description of PLI’s 23rd Annual Consumer Financial Services Institute, click here.

For more information, contact Danielle Cohen at 212.824.5857 or dcohen@pli.edu.

 

 

The second presentation of the 22nd Annual Consumer Financial Services Institute, sponsored by the Practising Law Institute, will take place in Chicago on May 4-5, 2017.  I am co-chairing the event, as I have for the past 21 years.  Hundreds of people attended the first presentation in NYC, live and on the web, on April 27-28, 2017.  The upcoming Chicago presentation is nearly sold out.

As it did in New York, the Institute will feature a 2-hour program at the beginning of the first day titled “The CFPB Speaks: Recent and Upcoming Initiatives.”  (Read our blog post recapping the NYC presentation here.)  I will moderate a panel discussion of three senior CFPB lawyers and two industry lawyers (one of whom will be my partner Chris Willis) who have extensive experience in dealing with the CFPB.

The CFPB panelists in Chicago will be:

  • Kristen Donoghue, Principal Deputy for Enforcement
  • Kelly T. Cochran, Assistant Director, Office of Regulations
  • Peggy L. Twohig, Assistant Director for Supervision Policy

The Institute will focus on a variety of cutting-edge issues and developments, including:

  • Impact of the election on the CFPB, other federal and state agencies
  • Privacy and data security
  • Fair lending
  • Mortgages
  • Emerging payments
  • State regulatory initiatives and developments
  • Class action developments and settlements
  • Debt collection
  • TCPA and FCRA

We hope you can join us for this informative and valuable program.  PLI has made a special 25 percent discounted registration fee available to those who register using the link that follows.  To register and view a complete description of PLI’s 22nd Annual Consumer Financial Services Institute, click here.

For more information, contact Danielle Cohen at 212.824.5857 or dcohen@pli.edu.

Earlier today, at the Practicing Law Institute’s (“PLI”) 22nd Annual Consumer Financial Services Institute in New York City, Alan Kaplinsky (who is co-chairing the event) moderated a panel entitled “The CFPB Speaks,” that featured three senior CFPB lawyers: Anthony (“Tony”) Alexis (Assistant Director for Enforcement), Diane Thompson (Deputy Assistant Director, Office of Regulations), and Peggy Twohig (Assistant Director for Supervision Policy).  Ballard Spahr attorney James Kim, a former senior CFPB enforcement lawyer who now represents industry, was also a panel member.

In response to questions posed by Alan and audience members, the CFPB lawyers discussed regulatory, supervisory and enforcement developments and upcoming initiatives.  Particularly noteworthy comments were:

  • Ms. Twohig stressed the importance of an entity’s response to a PARR letter – a notice of Potential Action and Request for Response – in the supervisory process.  She commented that there have been instances where the CFPB has decided not to cite a company for a violation based on its response to a PARR letter.
  • Mr. Alexis and Ms. Twohig discussed the CFPB’s process for deciding whether the CFPB will use a supervisory or an enforcement action to address violations found in an examination.  Ms. Twohig indicated that the decision whether to refer a matter to enforcement is made by an Action Review Committee (ARC), which considers various factors such as the severity of the violation, the entity’s cooperation with the CFPB, and policy factors that include the need for the CFPB to send a public message of deterrence.  Mr. Alexis indicated that if a matter is referred to enforcement, the Enforcement Division will consider similar factors as well as input from witnesses obtained through CIDs.  Enforcement will then decide whether to proceed with an enforcement action, return the matter for supervisory resolution (which Mr. Alexis called a “reverse ARC” process), or drop the case.  Mr. Alexis acknowledged that a supervisory resolution through an MOU or similar agreement is the only vehicle available to the CFPB to enter into a non-public settlement.  Accordingly, if a company is not subject to CFPB supervision, a settlement can only be entered into through a public consent order.
  • Mr. Alexis indicated that the constitutional challenge to the CFPB’s use of an administrative judge in the PHH case has not caused the CFPB to direct more enforcement matters to lawsuits filed in federal district court rather than administrative proceedings.  He noted that the CFPB’s decision of which forum to use is frequently driven by the facts involved in a matter, with a district court lawsuit more likely to be filed when the CFPB is in need of more discovery to support its case.  He also indicated that the panel’s rejection in PHH of the CFPB’s position that it is not bound by statutes of limitation in administrative enforcement actions has not changed the CFPB’s approach to enforcement matters.
  • Mr. Alexis indicated that he saw no need to advocate for the CFPB’s adoption of a matrix for assessing civil money penalties similar to those used by the prudential regulators because the factors are laid out in Dodd-Frank.
  • Ms. Thompson declined to estimate when the CFPB is likely to issue a final arbitration rule or a final payday/small dollar loan rule, stating that it was “too speculative” for her to do so and that the CFPB was continuing to consider the unprecedented number of comments received on both rules.  She also indicated that the CFPB was in the early stages of developing a proposed rule to implement Dodd-Frank Section 1071.  (Section 1071 amended the ECOA to require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.  Such data include the race, sex, and ethnicity of the principal owners of the business.)  According to Ms. Thompson, the CFPB is attempting to address the absence of good sources of data on small business lending.
  • Ms. Twohig indicated that the CFPB’s next larger participant rule will deal with consumer installment lending and auto title loans and that the CFPB is continuing to consider creating a registration system for non-bank lenders to assist the CFPB in identifying market participants.  She also indicated that to address the widespread use of compliance technology solutions by entities it supervises, the CFPB has stood up the National Information Systems Supervision Program (NISSP).  Through the NISSP, the CFPB uses specialized managers to inform and focus supervisory reviews of entities’ compliance-related information systems, some of which are designed in-house but many of which rely upon third parties to develop and maintain.
  • Ms. Twohig defended the CFPB’s proposed rule that would amend the CFPB’s information disclosure rules to allow it to share confidential supervisory information with any federal or state agency (including state attorneys general) regardless of whether the agency has jurisdiction over the company whose CSI is shared as long as the CSI is “relevant” to the agency’s authority.
  • Mr. Alexis stated that the CFPB’s decision to assert that the non-bank, and not the tribal-affiliated lender, was the “true lender” in the pending CashCall case was fact specific and dependent on how that case unfolded.  Mr. Alexis said that the CFPB would consider using the “true lender” theory and the predominant economic interest test in other cases if it is appropriate.  Mr. Kim remarked that the CFPB’s application of the “true lender” theory requires states to cooperate by alleging that the non-banks, who service or collect on the loans, are violating state usury and licensing laws.

 

 

The 22nd Annual Consumer Financial Services Institute, sponsored by the Practising Law Institute, will take place on March 27-28, 2017 in New York City (and by live webcast and groupcast in Atlanta; Philadelphia, Pittsburgh, and Mechanicsburg PA) and on May 4-5, 2017 in Chicago.  PLI has made a special 25% discounted registration fee available to those who register using the link below.

As I have done for the past 21 years, I will be co-chairing the event.  At the New York City program, my colleague James Kim, a former senior CFPB enforcement lawyer, will be speaking on “The CFPB Speaks” panel.  My partner Chris Willis will be speaking on that panel at the Chicago program.

During that two-hour panel, I will moderate a discussion among three senior CFPB lawyers and two industry lawyers (one of whom will be James or Chris) who have extensive experience in dealing with the CFPB.

The CFPB panelists will be:

  • Anthony (“Tony”) Alexis, Assistant Director for Enforcement (New York City)
  • Kristen Donoghue, Principal Deputy for Enforcement (Chicago)
  • Diane E. Thompson, Managing Counsel, Office of Regulations or Kelly T. Cochran, Assistant Director, Office of Regulations (New York City or Chicago)
  • Peggy L. Twohig, Assistant Director for Supervision Policy (New York City and Chicago)

We will cover in a question-and-answer format all of the important CFPB regulatory, supervisory and enforcement developments and upcoming initiatives.  If your practice involves the CFPB, you will not want to miss this panel discussion.

The first day will also include a one-hour panel titled “Federal Regulators Speak: Priorities & Coordination” that will feature representatives of the OCC and FTC who will be joined by a DOJ representative at the New York City program.

The Institute will focus on a wide variety of other cutting-edge issues and developments, including the impact of the election on the CFPB and other federal and state agencies, privacy and data security, fair lending, mortgages, emerging payments, state regulatory initiatives and developments, class action developments and settlements, debt collection, TCPA, and FCRA.

A complete description of the event and a link to register is available here.

On May 11, 2016, the CFPB sued All American Check Cashing, Mid-State Finance and their President and owner Michael E. Gray. It alleged that the Defendants engaged in abusive, deceptive, and unfair conduct in making certain payday loans, failing to refund overpayments on those loans, and cashing consumers’ checks.

The CFPB’s claims are mundane. The most interesting thing about the Complaint is the claim that isn’t there. Defendants allegedly made two-week payday loans to consumers who were paid monthly. They also rolled-over the loans by allowing consumers to take out a new loan to pay off an old one. The Complaint discusses how this practice is prohibited under state law even though it is not germane to the CFPB’s claims (which we discuss below). In its war against tribal lenders, the CFPB has taken the position that certain violations of state law themselves constitute violations of Dodd-Frank’s UDAAP prohibition. Yet the CFPB did not raise a UDAAP claim here based on Defendants’ alleged violation of state law.

This is most likely because of a possible nuance to the CFPB’s position that has not been widely discussed until recently. Jeff Ehrlich, CFPB Deputy Enforcement Director recently discussed this nuance at the PLI Consumer Financial Services Institute in Chicago chaired by Alan Kaplinsky. There, he said that the CFPB only considers state-law violations that render the loans void to constitute violations of Dodd-Frank’s UDAAP prohibitions. The Complaint in the All American Check Cashing case is an example of the CFPB adhering to this policy. Given that the CFPB took a more expansive view of UDAAP in the Cash Call case, it has been unclear how far the CFPB would take its prosecution of state-law violations. This case is one example of the CFPB staying its own hand and adhering to the narrower enforcement of UDAAP that Mr. Ehrlich announced last week.

In the All American Complaint, the CFPB cites an email sent by one of Defendants’ managers. The email contained a cartoon depicting one man pointing a gun at another who was saying “I get paid once a month.” The man with the gun said, “Take the money or die.” This, the CFPB claims, shows how Defendants pressured consumers into taking payday loans they didn’t want. We don’t know whether the email was prepared by a rogue employee who was out of line with company policy. But it nevertheless highlights how important it is for every employee of every company in the CFPB’s jurisdiction to write emails as if CFPB enforcement staff were reading them.

The Complaint also shows how the CFPB uses the testimony of consumers and former employees in its investigations. Several times in the Complaint, the CFPB cites to statements made by consumers and former employees who highlighted alleged problems with Defendants’ business practices. We see this all the time in the many CFPB investigations we handle. That underscores why it is very important for companies within the CFPB’s jurisdiction to be mindful of how they treat consumers and employees. They may be the ones the CFPB relies on for evidence against the subjects of its investigations.

The claims are nothing special and unlikely to significantly impact the state of the law. Although we will keep an eye on how certain defenses that may be available to Defendants play out, as they may be of some interest:

  • The CFPB claims that Defendants abused consumers by actively working to prohibit them from learning how much its check cashing products cost. If that happened, it is certainly a problem. Although, the CFPB acknowledged that Defendants posted signs in its stores disclosing the fees. It will be interesting to see how this impacts the CFPB’s claims. It seems impossible to hide a fact that is posted in plain sight.
  • The CFPB also claims that Defendants deceived consumers, telling them that they could not take their checks elsewhere for cashing without difficulty after they started the process with Defendants. The CFPB claims this was deceptive while at the same time acknowledging that it was true in some cases.
  • Defendants also allegedly deceived consumers by telling them that Defendants’ payday and check cashing services were cheaper than competitors when this was not so according to the CFPB. Whether this is the CFPB making a mountain out of the mole hill of ordinary advertising puffery is yet to be seen.
  • The CFPB claims that Defendants engaged in unfair conduct when it kept consumers’ overpayments on their payday loans and even zeroed-out negative account balances so the overpayments were erased from the system. This last claim, if it is true, will be toughest for Defendants to defend.

Most companies settle claims like this with the CFPB, resulting in a CFPB-drafted consent order and a one-sided view of the facts.  Even though this case involves fairly routine claims, it may nevertheless give the world a rare glimpse into both sides of the issues.

The CFPB representatives who will be participating in the Chicago session of the 21st Annual Consumer Financial Services Institute, sponsored by the Practicing Law Institute, have now been confirmed.  The Chicago session will take place  on May 12-13, 2016.  (The New York City session was held on April 4-5, 2016 (with live webcasts and groupcasts in Cincinnati, Cleveland, Philadelphia, Pittsburgh, Mechanicsburg, PA).)

As it did in New York, the Institute will feature a 2-hour program at the beginning of the first day titled “The CFPB Speaks: Recent and Upcoming Initiatives.”  I will moderate a panel discussion of four senior CFPB lawyers and two industry lawyers (one of whom will be my partner Chris Willis) who have extensive experience in dealing with the CFPB.

The CFPB panelists in Chicago will be:

  • Jeffrey Langer, Assistant Director for Installment Lending and Collections Markets
  • Peggy L. Twohig, Assistant Director for Supervision Policy
  • Paul Mondor, Managing Counsel, Office of Regulations
  • Jeff Ehrlich, Deputy Assistant Director, Office of Enforcement

The New York City session set an all-time attendance record for the Annual Institute with more than 500 people attending in person or watching online.  Since we are getting close to reaching capacity in Chicago, I encourage you to register soon.  For a complete description of the event and to register, visit PLI’s 21st Annual Consumer Financial Services Institute page.