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Category Archives: Financial Services Litigation and Enforcement

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Agreements between Lending Club and WebBank

Posted in Financial Services Litigation and Enforcement
PLA today posts amended and restated versions of the principal agreements between Lending Club and WebBank. The new agreements are available on the “Deals and Technology Resources” page (see the “WebBank Agreements” section at the bottom of the page).  The revised agreements address concerns created by the Madden v. Midland Funding decision… Read the rest

CFSC Roundup: From Issuing Credit Online to UDAAP Compliance Management

Posted in Credit/Debit Payments Resources, Financial Services Litigation and Enforcement
DWT’s Payments Team participated in the ABA Consumer Financial Services Committee’s Winter Meeting in Park City, Utah last week. Andrew Owens delivered a presentation on advertising and issuing credit online during the program’s kick-off event, and Adam Maarec participated in a panel on how to integrate unfair, deceptive, or abusive act or prac… Read the rest

CFPB Enforcement Actions in 2015: A Look Back

Posted in Financial Services Litigation and Enforcement
Year-end 2015 offers an opportunity to revisit and update the Consumer Financial Protection Bureau’s (CFPB’s) report, issued last July, summarizing its supervisory and enforcement activities.  The report encompassed the period since the CFPB’s inception.  It addressed the confidential supervision process, including self-reported vio… Read the rest

Recent Actions Added To UDAAP Database

Posted in Financial Services Litigation and Enforcement
PLA today updates the UDAAP database with a series of enforcement actions from the CFPB and, notably, the prudential regulators. The majority of enforcement actions involving allegedly unfair, deceptive, and abusive acts and practices (UDAAP) over the last six months have been filed by the Consumer Financial Protection Bureau (CFPB) using its UDAAP po… Read the rest

Recent Actions Added To UDAAP Database

Posted in Financial Services Litigation and Enforcement
The CFPB and FDIC have issued new enforcement actions that include allegations of unfair, deceptive, and/or abusive acts and practices (UDAAP) in connection with consumer financial products. We’ve updated our UDAAP Database with the most recent actions to facilitate understanding of the themes and patterns in UDAAP enforcement actions. In addit… Read the rest

Sprint Agrees to Pay FTC $2.95 Million to Settle Risk-Based Pricing Rule Charges Under the FCRA

Posted in Financial Services Litigation and Enforcement
Mobile service providers frequently look at their customers’ credit reports and scores to determine the best pricing plans for those customers. But asa recent settlement between Sprint Corporation and the Federal Trade Commission shows, mobile carriers that use customers’ credit information to determine service rates may be subject to the FTC… Read the rest

Recent Actions Added To UDAAP Database

Posted in Financial Services Litigation and Enforcement
The CFPB has issued new enforcement actions that include allegations of unfair, deceptive, or abusive acts and practices (UDAAP) in connection with consumer financial products. We’ve updated our UDAAP Database with the most recent actions to facilitate understanding of the themes and patterns in UDAAP enforcement actions that have been issued not j… Read the rest

The CFPB and the Business of Insurance

Posted in Financial Services Litigation and Enforcement, Regulatory and Compliance
DWT payments team member Adam Maarec recently co-authored (with James C. Sivon) an article entitled “The CFPB and the Business of Insurance: An Analysis of the Scope of CFPB’s Authority Over Insurance Sales” in the Quarterly Report of the Conference on Consumer Finance Law. In 2014, the Bureau of Consumer Financial Protection (CFPB) is… Read the rest

Increased Risk for Buyers of Credit Card Loans

Posted in Financial Services Litigation and Enforcement
Third party debt buyers may face increased threat of state-law class action lawsuits after a recent Second Circuit ruling prohibiting such debt buyers from invoking federal preemption defenses under the National Bank Act to defeat state-law usury claims. In Madden v. Midland Funding, LLC, 786 F.3d 246 (2d Cir. 2015), the Second Circuit rejected the pree… Read the rest

“Predominant economic interest” — CashCall, Inc. v. Morrisey

Posted in Deals and Technology, Financial Services Litigation and Enforcement
PLA today posts (alongside the already-posted public WebBank deals) a petition for certiorari filed in the U.S. Supreme Court a few months back in the CashCall rent-a-charter / true lender litigation. In this case, West Virginia’s Attorney General successfully alleged that CashCall was the “de facto lender” based on its “predominant econom… Read the rest

Recent Actions Added To UDAAP Database

Posted in Financial Services Litigation and Enforcement
The CFPB has issued new enforcement actions that include allegations of unfair, deceptive, or abusive acts and practices (UDAAP) in connection with consumer financial products. We’ve updated our UDAAP Database with the most recent actions to facilitate understanding of the themes and patterns in UDAAP enforcement actions that have been issued. In o… Read the rest

FinCEN and Department of Justice Settle Anti-Money Laundering Charges Against Crypto-Currency Company Ripple Labs

Posted in Financial Services Litigation and Enforcement
On May 5, Ripple Labs (Ripple) entered into a consent decree with the Financial Crimes Enforcement Network (FinCEN), under which Ripple admitted to  conduct that violated U.S. anti-money laundering (AML) laws and agreed to take remedial measures to prevent future violations.  Concurrently, Ripple entered into an almost identical settlement agreeRead the rest

Recent Actions Added To UDAAP Database

Posted in Financial Services Litigation and Enforcement
The CFPB has issued new enforcement actions that include allegations of unfair, deceptive, or abusive acts and practices (UDAAP) in connection with consumer financial products. We’ve updated our UDAAP Database with the most recent actions to facilitate understanding of the themes and patterns in UDAAP enforcement actions that have been issued not j… Read the rest

Anatomy of a Consent Order: “Gizmo” Case Study

Posted in Financial Services Litigation and Enforcement
On March 26, 2015, DWT payments team member Andy Lorentz was a presenter at ACI’s 9th Emerging Payments System conference in Chicago, IL. His panel focused on the topic of “Ensuring Compliance with the Increasingly Aggressive State Regulatory and Enforcement Framework Governing Emerging Payment Systems.” Andy’s presentation offered a case s… Read the rest

PayPal to Pay Dearly for Alleged Violations of OFAC Sanctions

Posted in Financial Services Litigation and Enforcement, Regulatory and Compliance
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced a $7,658,300 settlement with PayPal, Inc. (PayPal) to resolve potential civil liability for 486 alleged violations of the Iranian, Sudanese, Cuban, Global Terrorism, and Weapons of Mass Destruction Proliferators (WMDP) sanctions programs.  OFAC alleged… Read the rest

CFPB Provides Details of Non-Public Supervisory Actions

Posted in Financial Services Litigation and Enforcement, Regulatory and Compliance
The Consumer Financial Protection Bureau recently issued its semi-annual Supervisory Highlights report, which summarizes non-public supervisory actions that occurred during the second half of 2014. These reports provide regulated institutions with insight into the CFPB’s recent areas of focus and identify specific practices that the agency ha… Read the rest

The CFPB’s Final Report on Pre-Dispute Arbitration Clauses

Posted in Financial Services Litigation and Enforcement, Regulatory and Compliance
On March 10, 2015, the CFPB issued its long-awaited Arbitration Study analyzing the use of pre-dispute arbitration provisions in connection with consumer financial products or services. In the 728-page report, as well as during a field hearing held the same day, the CFPB was critical of the use and effect of pre-dispute arbitration provisions in credit c… Read the rest

The OCC’s Increasing Focus on BSA-AML Compliance

Posted in Financial Services Litigation and Enforcement
In a speech last week to the Institute of International Bankers, Comptroller of the Currency Thomas J. Curry focused extensively on Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance. Combined with the recent suggestion by Benjamin Lawsky, the Superintendent of New York’s Financial Services Department (DFS), that New York may begin requ… Read the rest

FinCEN Levies $1 Million Fine Against Former MoneyGram Chief Compliance Officer for BSA/AML Violations

Posted in Financial Services Litigation and Enforcement, Regulatory and Compliance
The Financial Crimes Enforcement Network (“FinCEN”) fined former Chief Compliance Officer for MoneyGram Thomas Haider $1 Million Dollars for willful failure to ensure that his company complied with anti-money laundering rules. FinCEN also initiated proceedings to ban Mr. Haider from the financial services industry for life. FinC… Read the rest

Operation Chokepoint and the Brave New World of Criminal Liability

Posted in Financial Services Litigation and Enforcement
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 f… Read the rest

FinCEN Refines Guidance for Bitcoin Payment Processors and Exchanges

Posted in Financial Services Litigation and Enforcement, Regulatory and Compliance
On October, 27, 2014, the Financial Crimes Enforcement Network (“FinCEN”) issued two administrative ruling letters regarding money services business (“MSB”) regulations as they relate to Bitcoin payment processing and Bitcoin exchange activity , rejecting assertions that such activity is exempt from regulation under the Bank Secrecy Act… Read the rest

Penalties for Violation of Certain Money Transmitter Laws

Posted in Financial Services Litigation and Enforcement, Regulatory and Compliance
On Monday, September 22, DWT payments team member Andy Lorentz spoke at ACI’s 8th Emerging Payment Systems Conference in Washington, DC, as part of a panel entitled “Ensuring Compliance with the Increasingly Aggressive State Regulatory and Enforcement Framework Governing Emerging Payment Systems, Including Virtual Currencies: An In-… Read the rest

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

Posted in Financial Services Litigation and Enforcement, Regulatory and Compliance
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 201… Read the rest