August 31, 2018

Consumer Financial Services Practice Digest

3 min

Maryland Expands Its Consumer Financial Protection and Enforcement with New Law

On May 15, 2018, Maryland enacted the Financial Consumer Protection Act of 2018, which expands safeguards to protect consumers and augments the state's consumer finance enforcement mechanisms. The law becomes effective on October 1, 2018, and is set to change Maryland law in various ways which are discussed in this article.

Visa Updates Rules for Marketplaces

In recognition of a rapidly changing ecommerce environment, Visa has created a new category of payment aggregator – a "marketplace" – for entities that bring "together Cardholders and retailers on an electronic commerce website or mobile application." The new marketplace designation will have an immediate impact in the ecommerce market by clarifying the status and requirements applicable to ecommerce sites looking to add payment processing services to their platforms. While this model is likely to grow in popularity, it raises a number of regulatory and compliance issues that must be taken into account.

GLBA Annual Privacy Notice Update

The CFPB has revised the exception for annual privacy notice delivery under the Gramm-Leach-Bliley Act (GLBA) implementing statutory amendments to the GLBA passed in 2015. The final rule replaces the current annual privacy notice exception under Regulation P. Generally, the CFPB's final rule relaxes the regulatory burden inherent in the annual notice requirement. The amendments were finalized by the CFPB on August 10, 2018 and will become effective September 17, 2018.

Capping Conscionability – Considerations for Lenders after CashCall

California's highest court handed down a unanimous ruling that has rattled the subprime loan market. In Eduardo De La Torre, et al. v. CashCall, Inc., the California Supreme Court held an interest rate on consumer loans of $2,500 or more may be deemed "unconscionable" and, therefore, illegal under California law. The CashCall decision reminded lenders they may need to reconsider their interest rates when a lending law states that it does not apply to loans above a specified amount.

Upcoming Events

September 7, 2018: "State Enforcement Activity in the Consumer Financial Services Industry," a Venable hosted webinar

September 25, 2018: "Does Your Website Comply with the ADA? Don't Wait for a Class Action to Find Out," a Venable hosted webinar — During this webinar, Venable lawyers and Ken Nakata, director of the Accessibility Consulting Practice at Cyxtera Technologies, will discuss the legal and practical issues encountered in complying with the ADA and Web Content Accessibility Guidelines, including how to build a successful defense against website accessibility lawsuits.

October 9, 2018: "Investor Pain Points and Perspectives for Fintech Consumer Lending," 2018 LEND360 Conference

October 9, 2018: "As American as Apple Pie? The Trial by Media Phenomenon," 2018 Government Investigations & Civil Litigation Institute (GICLI) Annual Meeting

Firm News

Leading IP Firm to Join Venable

Last week, Venable LLP announced that it reached an agreement with Fitzpatrick, Cella, Harper & Scinto, one of the world's leading intellectual property firms, for that firm to join Venable. The deal is expected to close November 1. With the addition of the Fitzpatrick practice, Venable will grow to approximately 800 attorneys – roughly 175 of whom practice IP law. This growth will more than double the size of Venable's intellectual property team, making it one of the largest IP groups in the country, and will double the size of Venable's New York office to more than 170 lawyers, placing it among the largest firms in the city.