June 28, 2019

Consumer Financial Services Practice Digest

4 min

Formalizing Flexibility: OCC Issues Final Rule Providing a Process for Federal Savings Associations to Elect National Bank Treatment

Long restricted in their ability to pursue certain lines of business under the Home Owners' Loan Act (HOLA), and with the Dodd-Frank Act eliminating many of the benefits HOLA provided, federal savings associations (FSAs) have been hampered in their ability to manage their balance sheet and meet the needs of their communities. Congress, through section 206, the Economic Growth, Regulatory Relief, and Consumer Protection Act (known as the Federal Savings Association Flexibility Act (Flexibility Act)), has provided FSAs a tool to diversify their portfolios, maintain their federal charter, and better serve their communities. The Flexibility Act allows certain FSAs to elect to operate as a covered savings association (Covered SA) with "the same rights and privileges as a national bank that has the main office of the national bank situated in the same location as the [Covered SA's] home office."

Consumer Finance Enforcement Activity Webinar

Members of Venable's Consumer Financial Services practice discussed the current and evolving state of federal and state consumer financial protection law and policy and outlined what you and your company need to know about what's ahead. During the webinar, the speakers shared their experiences from the front lines and offered insights and strategies to help companies navigate the changing legal and regulatory landscape.

Click here to listen to the recording and here to view the slides.

Getting Ready for the California Consumer Privacy Act: Ten Steps to Start Now

Financial companies nationwide are in the midst of preparing for the California Consumer Privacy Act of 2018 (CCPA), an expansive new data privacy law that will go into effect on January 1, 2020. The CCPA raises special issues for financial institutions. Although there is an exemption for personal information collected, processed, sold, or disclosed pursuant to the Gramm-Leach-Bliley Act and the similar California Financial Information Privacy Act, applying this exemption in practice has proved complex. Where it applies, the CCPA grants California consumers new rights to access, delete, and opt out of the sale of personal information businesses maintain about them. The definition of "personal information" in the law is broad and encompasses data that has not previously been considered to be personal information under U.S. law. The CCPA also boosts liability exposure for businesses by providing a private right of action, linked to statutory damages, for consumers in the event that certain types of personal information are subject to a security breach, as a result of the business's failure to provide reasonable security. Companies should begin working towards CCPA compliance as soon as possible, as the law will require significant operational and compliance effort. Venable's eCommerce, Privacy, and Cybersecurity Practice has been on the front lines in helping clients advocate for amendments and prepare for the CCPA's impact.

Combating Regulation by Enforcement: A Strategic Framework for Responding to State Agency Overreach

In recent years, changes in the economic and political landscapes have created an environment ripe for increased scrutiny and oversight by state regulators of the activities of financial services firms, investment advisors, and life insurers. Namely, the 2008 financial crisis and subsequent recession on the economic front and the Trump administration's deregulatory emphasis on the political front have caused some state regulators to significantly increase their regulatory enforcement and compliance activity toward such companies.

You Can't Block the Ability of the CFPB to Challenge Conduct Through a Release in a Class Action

On April 22, the Maryland Court of Special Appeals told us that a class action settlement can't buy you peace from the CFPB. That court ruled that a class settlement that purports to interfere with a state agency's or the CFPB's enforcement authority was unenforceable. The underlying dispute stems from two cases. The first is a class action brought by lead poisoning victims with cognitive impairments. And the second is a suit bought by government agencies for mishandling the rewards of the first case.