Archives: Consumer Financial Services

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Digital Assets Have Existing Laws Applied by SEC and CFTC

Nine years after Satoshi Nakamoto circulated his whitepaper and introduced the world to bitcoin, regulated bitcoin derivatives are about to be introduced in the United States. CME Group recently announced that it will begin to offer bitcoin futures based on the CME CF Bitcoin Reference Rate later this year[1] and the Chicago Board Options Exchange … Continue Reading

Prize-Linked Savings Laws Spread Across States

With Americans’ saving habits in the news as the federal government considers caps on retirement contributions, financial institutions should be aware that many states are passing laws making it easier to incentivize saving. To date, 26 states have enacted legislation that liberalizes their approaches to games of chance in support of good consumer saving practices. … Continue Reading

Treasury Report Takes Aim at CFPB Arbitration Rule

The CFPB’s Arbitration Agreements Rule (“Rule”), which was finalized on July 18, 2017, came under fire today in a report released by the U.S. Department of Treasury (“Treasury”).  The 18-page report details the “extraordinary costs” the Rule will impose if implemented—more than $500 million in additional legal defense fees, $330 million in payments to plaintiffs’ … Continue Reading

Robert Jaworski to Speak on TRID Compliance at MBA Conference

Bob Jaworski will be speaking at the Mortgage Bankers Association of America’s annual Regulatory Compliance Conference in Washington, D.C.. The conference will be held on September 17-19, 2017 at the Grand Hyatt, Washington. Bob will be part of a Monday afternoon panel on “TRID Compliance Issues,” which will look at the major issues faced by compliance … Continue Reading

D.C. Circuit Court Strikes Opt-Out Notice Requirement For Certain Faxes

On Friday, in a decision certain to please the business community as well as the Chair and new majority of the Federal Communications Committee, the D.C. Circuit struck down parts of the FCC’s October 30, 2014 Order, 29 F.C.C. Rcd. 13998 (FCC 14-164), requiring that solicited faxes (those sent with consent of the recipient) must … Continue Reading

Illinois Releases Proposed Guidance on Application of State Money Transmission Law to Digital Currency Activities

On November 30, 2016, the Illinois Department of Financial and Professional Regulation (IDFPR) issued a proposed “Digital Currency Regulatory Guidance” (the Guidance) regarding the application of the Illinois Transmitters of Money Act (TOMA) to various digital currency activities. The Guidance applies only to “decentralized digital currencies,” which are not issued by a particular person or … Continue Reading

State AGs Double Down Focus on Financial Services, including FinTech

State attorneys General (AGs) continue to emerge as major regulators of financial services and show little sign of being cowed by their federal counterparts….or efforts to preempt state authority. This past week, representatives of the consumer protection divisions of the AGs of nearly all 50 states plus officials from the FTC and CFPB met in … Continue Reading

Georgia Court Sheds Light on CFPB’s Power to Sue Companies that ‘Recklessly Provide Substantial Assistance’

On September 1, 2015, the Consumer Financial Protection Bureau (“CFPB”) won an important decision in which a federal court, for the first time, interpreted the meaning of “recklessly provid[ing] substantial assistance” under the Consumer Financial Protection Act (“CFPA”).2 Perhaps since it was an order denying the defendants’ motions to dismiss released just before the Labor … Continue Reading

What Do You Get for the Plaintiff Who Has Everything? Maybe a Class Action, Ruled The Seventh Circuit

Perturbed by two allegedly unwanted faxes, Arnold Chapman brought a putative class action under the Telephone Consumer Protection Act (“TCPA”). For himself, he sought the most the statute could provide – $3,000, an injunction, and costs. ($3,000 represents $500 in statutory damages for each of the two faxes, trebled for an allegedly knowing or wilful … Continue Reading

Robert Jaworski Writes on National Credit Reporting Agencies Amending Practices

Reed Smith’s Robert Jaworski recently wrote an article on New York Attorney General Eric Schneiderman’s settlement agreement (Agreement) with the three national consumer reporting agencies (CRAs). In the article, he provides a summary of the Agreement and the impact of the settlement on CRAs, users of the credit reports, those that furnish the CRAs with … Continue Reading

OCC Issues Final Rule on Integration of Federal Savings Association – National Bank Licensing Rules

Title III of the Dodd-Frank Act transferred to the OCC all functions of the former Office of Thrift Supervision (“OTS”) and the Director of the OTS relating to federal savings associations.  12 U.S.C. § 5412(b)(2)(C).  This effectively dissolved the OTS and brought the chartering and primary supervisory responsibilities as to federally chartered banks and savings associations … Continue Reading

Reed Smith Adds Former CFPB Enforcement Counsel to its Financial Industry Group

Last week, former Consumer Financial Protection Bureau (CFPB) Enforcement Counsel Nicholas Smyth joined Reed Smith's Financial Industry Group, bringing expertise on the CFPB's approach to mortgage lending, auto lending, student lending, debt collection, credit reporting, and military lending. Smyth brings an insider's knowledge of the federal government's fastest-growing and increasingly feared agency. He was one of the longest-serving attorneys at the CFPB prior to joining the Firm, and he helped build the agency's Office of Servicemember Affairs and Office of Enforcement.… Continue Reading

The Empire State Strikes Back! Cuomo and Lawsky Unleash Tough New Debt Collection Regulations

On December 3, 2014, the New York Department of Financial Services (the “Department”) issued new regulations on consumer debt collection practices, to be codified at 23 NYCRR Part 1.  Gov. Andrew Cuomo commented that the state is “rolling out tough new regulations to protect borrowers and help crack down on illegitimate debt collection practices.”  Superintendent of … Continue Reading

FCC Confirms that Even Solicited Fax Ads Must Contain Opt-Out Language, and Sets Six-Month Deadline for Companies to Seek a Retroactive Waiver

Recently, our Global Regulatory Enforcement colleagues wrote about an FCC ruling, which resolves several petitions seeking clarification of the opt-out notice requirement regarding advertisements faxed to consumers as contained in the Telephone Consumer Protection Act. To read the entire alert, please click here.… Continue Reading

Mobile Payments – The Future is NOW

This post was also written by Christopher Fatherley. At this week’s highly anticipated new product launch, Tim Cook (Apple’s CEO) introduced Apple Pay, Apple’s new payment platform driven by the event’s leading stars, the iPhone 6 and iWatch. As usual, the excitement was infectious and palpable, even for those virtually participating from locations thousands of miles from … Continue Reading

Supreme Court Clarifies Scope of Federal Bank Fraud Statute, But Leaves Some Questions

On June 23, 2014, the U.S. Supreme Court clarified – and arguably expanded – the reach of the federal bank fraud statute. In Loughrin v. U.S., petitioner Kevin Loughrin challenged the lower court’s interpretation of the federal bank fraud statute as not requiring that the government prove that the defendant specifically intended to defraud a … Continue Reading

Banking on Cybersecurity: New York State Introduces New Assessment Measures

This post was also written by Timothy Nagle and Christopher Fatherley. The New York Department of Financial Services (“DFS”) has joined the growing chorus of financial regulators expressing heightened concern for bank cybersecurity preparedness. On May 6, 2014 New York’s Governor Andrew M. Cuomo released a 13 page “horizontal perspective” entitled Report on Cyber Security in … Continue Reading

Universities Are Not Exempt from FCRA by the Higher Education Act

The Third Circuit has recently held that universities are not exempt under the Higher Education Act (“HEA”) from their duties as furnishers with respect to federal student loans. In Seamans v. Temple University, a borrower sued on a loan from 1992 alleging that the university’s failure to report the borrower’s initial default in 1992 and … Continue Reading

The Inevitable – EMV Payments On a Fast Track to Becoming a New Standard in the United States

This post was also written by Timothy J. Nagle. Last week, congressional leaders in Washington continued with their focus on the safety of the U.S. payments system in the aftermath of the massive retailer breaches at Target, Neiman Marcus and others. The House Committee on Financial Services held its session March 5, while the House … Continue Reading

Join Us for ABA Webinar on Social Media in Consumer Finance

As part of the American Bar Association’s Consumer Financial Services Committee monthly webinar series, Reed Smith attorneys Travis P. Nelson and Stacy K. Marcus will be leading a discussion this Wednesday, February 12, 2014, examining the effect of social media on the consumer finance industry, including how social media can and should be used by … Continue Reading

Ninth Circuit Cites Code of Hammurabi’s Goat-Stealing Regulations in Credit Card Fee Case

It is not every day that you read a court citing to “the Code of Hammurabi’s goat-stealing regulations” when it discusses the constitutionality of credit card late fees and overlimit fees; however, when it comes to the Wild West’s Ninth Circuit, anything is possible. On January 21, the Ninth Circuit issued its decision in In … Continue Reading

Reed Smith’s Financial Services Regulatory Group Welcomes Angela Angelovska-Wilson

Our financial services regulatory capabilities just got a major shot in the arm with the arrival of Angela Angelovska-Wilson. Resident in our Washington, D.C. office, Angela provides regulatory counseling for clients across a broad spectrum of industries, and she has in-depth experience advising clients on a wide range of electronic financial services issues. The press … Continue Reading

CFPB May Expand the Reach of the FDCPA

This post was also written by Kenneth M. Kolaski. In a recent press release, the CFPB indicated that it may consider subjecting creditors to the requirements of the Fair Debt Collection Practices Act that are statutorily exempt. On July 10, 2013, the Consumer Financial Protection Bureau (“CFPB”) issued two important bulletins on debt collection, published … Continue Reading

GOP Senators Tell President They Will Oppose Any CFPB Nominee Until Reforms Are Made

On January 31, 2013, 42 Republican Senators joined in a letter to President Obama, warning that they will oppose the confirmation of any nominee to be Director of the Consumer Financial Protection Bureau ("CFPB"), until significant reforms are made to ensure "transparency and accountability" at the Bureau.… Continue Reading