Archives: Financial Services Regulation – U.S.

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Addressing Attestations

Attestations are part of the FCA supervisory toolkit used to ensure accountability from senior management in all regulated firms. They are a means by which the FCA can gain personal commitment from an approved person that specific action has been taken or will be taken, often without requiring ongoing regulatory involvement.  We have seen attestations … Continue Reading

Fannie Mae’s Credit-Risk Transfer Initiatives Approach the Half-Trillion-Dollar-Mark, Reducing Taxpayers’ Exposure – But Some Are Recommending More Should Be Done

While the FHFA’s conservatorships of Fannie Mae and Freddie Mac are unlikely to end before 2017, the Enterprises continue to transfer more credit risk from their single-family residential mortgages to private insurers. Both GSEs have exceeded their credit-risk transfer goals for calendar year 2015, largely because of Fannie Mae’s CAS series and Freddie Mac’s Structured … Continue Reading

Hastert Reaches Plea Deal in Anti-Money Laundering Case – Guilty Plea Expected

As I reported in a June 2, 2015 client alert, on May 28, 2015, Dennis Hastert, former Speaker of the U.S. House of Representatives, was indicted by a federal grand jury in the Northern District of Illinois. Mr. Hastert, a former high school teacher and football coach, was charged with making a “materially false, fictitious, … 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

FinCEN Proposes AML Regulations for Investment Advisers

In August 2015, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed regulations that would require investment advisers subject to SEC registration to establish anti-money laundering (AML) programs.1 The proposal also adds such investment advisers to the definition of “financial institutions” under the Bank Secrecy Act (BSA), which consequently requires them to report … 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

FCC Issues Omnibus Ruling on Host of Issues Affecting TCPA Litigation and Compliance

On July 10, 2015, the Federal Communications Commission (FCC) finally released its long awaited TCPA Omnibus Declaratory Ruling and Order, which resolved 21 petitions involving a wide variety of issues regarding the enforcement and interpretation of the Telephone Consumer Protection Act (TCPA). The FCC had voted in favor of the Ruling June 18 at an … Continue Reading

FinCEN Speech Outlines “Core Principles” on Enforcement

A recent Reed Smith Client Alert discusses a June 2015 speech by Stephanie Brooker, Associate Director for Enforcement at the Financial Crimes Enforcement Network (“FinCEN”). Although Ms. Brooker’s comments were specifically directed at the casino and card club industries, she discussed six “core principles” that have and will continue to guide FinCEN’s BSA/AML enforcement activities … Continue Reading

Travis Nelson Elected to Leadership Role in New Jersey Banking Bar

On May 15, 2015, the Banking Law Section of the New Jersey State Bar Association (“NJSBA”) held its annual meeting in Atlantic City, N.J., in conjunction with the NJSBA’s Annual Meeting. In addition to other informational and educational programs, the Banking Law Section conducted its biannual election of officers, electing Reed Smith’s Travis Nelson as … Continue Reading

CFPB’s Federal Court Action Against PayPal Sheds Further Light on the Meaning of ‘Abusive’ Acts or Practices

On May 19, 2015, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) filed a complaint and proposed consent order against PayPal, Inc. and its subsidiary Bill Me Later, Inc. (collectively, “PayPal”) in the U.S. District Court for the District of Maryland. If approved by the court, the settlement will require PayPal to pay $15 million … 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 HUD Assistant Secretary to its Financial Industry, Financial Services Regulatory, and Government Relations Groups

Reed Smith recently added Steven Nesmith to its Financial Industry, Financial Services Regulatory, and Government Relations Group.  Steven’s practice will focus on, among other areas, assisting bank and non-bank clients with housing/mortgage, banking, financial services and international trade issues before Congress, and the regulatory agencies. Steven’s background combines extensive experience at senior levels, as in-house … Continue Reading

Travis Nelson to Speak on Examinations and Enforcement at NJ Bankers’ Compliance University

On Wednesday, March 25, 2015, Travis Nelson, of Reed Smith’s Princeton and New York offices, will give his annual lecture at the New Jersey Bankers Association’s Compliance University. This year Travis will focus on recent developments and trends in examinations and enforcement, covering a cross-section of topics, including proposed changes to the federal mortgage servicing … Continue Reading

CFPB’s Complaints Policy Spurs Many Complaints (From Industry)

Financial institutions are not happy about the CFPB’s announcement that it will begin posting the narratives of some consumer complaints in June. When the CFPB first proposed the idea last summer, banks and industry groups made several arguments against public complaint posting: the content of the complaints is unverified, complaints describe only negative – not … Continue Reading

“Abusive” further defined by court as CFPB case against ITT Tech moves forward

On March 9, District Judge Sarah Evans Barker issued her long-anticipated order on the motion to dismiss in CFPB v. ITT Educational Services, Inc., No. 1:14-cv-00292 (S.D. Ind.). Judge Barker denied ITT’s motion to dismiss the Bureau’s unfairness and abusiveness claims but granted it on the Bureau’s TILA claim. At 67 pages, the order provides … Continue Reading

CFPB Report Claims Arbitration “Less Beneficial To Consumers” than Individual or Class Litigation, Foreshadows Attempt to Impose Restrictions in Future

On March 10, Director Richard Cordray of the Consumer Financial Protection Bureau (“Bureau” or “CFPB”) presided over a Field Hearing on Pre-Dispute Arbitration Clauses, discussing what he described as the “key findings” of the Bureau’s long-awaited 700-page Arbitration Report to Congress published earlier that morning. Reed Smith attorney Deepa Zavatsky attended the hearing, where Cordray … Continue Reading

Reed Smith’s Stephanie Wilson Addresses Regulators’ Policy on Diversity and Inclusion at Financial Institutions

Reed Smith’s Stephanie Wilson recently told The Legal Intelligencer that she fielded many calls about Dodd-Frank Act’s section 342, which regulates diversity and inclusion in the financial industry, when the law was first passed in 2010. While it was soon “overshadowed” by other, more financially immediate sections, she says the questions about section 342 are … Continue Reading

How Many SARs Does It Take to Find Yourself in Regulators’ Crosshairs? Answer: None

Securities and Exchange Commission (“SEC”) Enforcement Division Director Andrew Ceresney, recently drew attention when he announced that the SEC intends to include among its enforcement priorities compliance with the Bank Secrecy Act (the “BSA”). Ceresney’s comments, made during SIFMA’s 2015 Anti-Money Laundering and Financial Crimes Conference, focused on broker-dealers and the SEC’s concern that broker-dealers … 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

SEC and the Municipal Securities Market

The SEC has been increasingly active in its enforcement efforts in the municipal securities market. Such efforts are being conducted through its Municipal Securities and Public Pensions unit, which was one of the five specialized enforcement units the SEC first created in 2010. In 2014, the SEC boldly acted in this area by offering a deal to underwriters and issuers of municipal securities, incentivizing them to self-report potential securities laws violations. The program, the Municipalities Continuing Disclosure Cooperation ("MCDC") initiative, offered underwriters and issuers the opportunity to self-report possible disclosure violations based on the requirements of Rule 15c2-12 of the Securities Exchange Act. Generally, Rule 15c2-12 prohibits underwriters from selling municipal securities unless the issuers have agreed to make certain continuing disclosures regarding certain financial information, operating data, and material events affecting the municipal securities. The MCDC initiative invited underwriters and issuers of municipal securities to self-report potential securities fraud violations, asking underwriters and issuers to identify those transactions within the prior five years whose offering documents contained potentially inaccurate statements regarding prior compliance by the issuer with 15c2-12 continuing disclosure obligations.… 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