Developments and Commentary

contact paymentSixteen State Attorneys General Urge CFPB to Limit Pre-dispute Arbitration

State attorneys general from California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington sent a letter to Consumer Financial Protection Bureau Director Richard Cordray urging the agency to issue rules imposing “prohibitions, conditions, or limitations on the use of ...

Nov13DCFPB Proposed Prepaid Account Rule

On November 13, 2014 the Consumer Financial Protection Bureau issued its long-awaited proposed rule on prepaid products. The rules would apply broadly to any “prepaid account,” whether in the form of a card, code or other device, capable of being loaded with funds that can be used at unaffiliated merchants, ...

stealing moneyFederal Financial Institutions Examination Council Releases Cybersecurity Assessment Results: Boards of Directors and Senior Management Need to Engage

The Federal Financial Institutions Examination Council (FFIEC) released general observations yesterday from a cybersecurity assessment of over 500 community financial institutions. The cybersecurity assessment evaluated the institutions’ preparedness to mitigate cyber risks. It ultimately found that due to the critical dependence of financial institutions on information technology to conduct business ...

Upcoming Event: The Future of Payments is … Now (?)

Bill Gates once opined that “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” Join us in an informal conversation at Money2020 about trends in the legal, compliance and state licensing landscape for payments and find ...

CFPBCordCFPB Proposes No-Action Letter Policy for Innovative Products

The Consumer Financial Protection Bureau has proposed a no-action letter policy under which the agency would issue letters stating that its staff “has no present intention to recommend initiation of an enforcement or supervisory action” with respect to specified matters involving innovative financial products or services. The proposal is an ...

Resource Updates

Operation Chokepoint and the Brave New World of Criminal Liability

The U.S. Department of Justice and banking regulators have stepped up the pace of criminal, civil and administrative actions against banks, payment processors, money transmitters, and other financial institutions, for violations of the Bank Secrecy Act, including through a DOJ initiative known as “Operation Chokepoint.” Criminal charges for failing to ...

psa_v2PLA Announces the Launch of UDAAP Database

The PLA editors have created a database of enforcement actions that include allegations of unfair, deceptive, or abusive acts or practices (UDAAP) in connection with consumer financial products.  The database focuses on enforcement actions by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the ...

A Survey of Activities Identified as Unfair, Deceptive, or Abusive by the CFPB

DWT payments team member Adam Maarec recently co-authored an article entitled "A Survey of Activities Identified as Unfair, Deceptive, or Abusive by the CFPB," published by the American Bar Association. In January 2014, the authors released a survey of activities identified as unfair, deceptive or abusive (UDAAP) by the CFPB in 2012 & 2013. ...

plaresourceFair Lending Analysis of Credit Cards

PLA today posts a link to a Philly Fed discussion paper entitled “Fair Lending Analysis of Credit Cards.”  The paper addresses, among other matters, disparate impact risks in credit scoring models and prescreen campaigns.  The paper is of interest not only for its conclusions and recommendations, but also as an ...

Requirements-and-Best-Practices-for-Truncating-Card-Account-Numbers1-300x177FACTA Class Actions

In the July 2014 issues of The Review of Banking & Financial Services, DWT payments team members Burt Braverman and Micah Ratner wrote about the truncation requirement of FACTA, which has spawned a wave of class action litigation with potentially ruinous damages for “willful” violations. The authors describe the court rulings ...