Legal and Regulatory Developments
CFPB Debt Collection Rule Takes Effect November 30: Is Your Team Ready?
This two-part webinar is designed for in-house legal and compliance departments responsible for implementing compliance with the new requirements or overseeing vendor compliance. The CFPB's debt collection rule, Regulation F, addresses the use of electronic communications (e.g., email, text messages, and social media), voicemail messages, and telephone call frequency. The rule also has provisions on disputes, record retention, and several other topics. The rule is a major development for all participants in the credit and accounts receivable marketplace and will have a direct impact on enforcement investigations, supervisory examinations, and litigation. Venable partners Alexandra Megaris and Jonathan L. Pompan cover the technical requirements and offer practical insights for operationalizing them and testing compliance.
Consumer Credit R(evolution): Buy Now Pay Later and Other Emerging Trends in Consumer Finance
Venable partners Jonathan L. Pompan and Allen H. Denson presented "Consumer Credit R(evolution): Buy Now Pay Later and Other Emerging Trends in Consumer Finance" at the 2021 OLA Legal Issues Conference on July 22, 2021. This session explored recent legal and regulatory developments important to market participants, including potential pitfalls and opportunities, updates on the regulatory landscape, and the emerging compliance outlook.
Should Private Equity Worry About Consumer Protection Investigations?
FTC Chair Lina Kahn, who took over the reins of the FTC in June, is making it clear that she is no fan of the direction some private equity-owned businesses have taken in recent years. She takes particular issue with, "extractive business models" that "centralize control and profits while outsourcing risk, liability, and costs." She went on to say these business models, "warrant particular scrutiny, given that deeply asymmetric relationships between the controlling firm and dependent entities can be ripe for abuse."
CFPB Supervisory Exam Focus on Information Technology; RegTech Under Scrutiny
The CFPB recently added a new section to its Supervision and Examination Manual focusing on the use of information technology (IT) by entities within the scope of the CFPB's supervision and enforcement authority. The procedures set forth how examiners assess IT and IT controls as part of a compliance management system (CMS) review. The new procedures are referred to by the CFPB as the "Compliance Management Review – Information Technology (CMR-IT) examination procedures," or "CMS-IT" for short.
California Enacts Fair Debt Settlement Practices Act
California Governor Gavin Newsom signed into law the California Fair Debt Settlement Practices Act, California Civil Code Section 1788.300 - 1788.307, which provides requirements and prohibitions related to debt settlement services and related payment processing services. The law takes effect on January 1, 2022. Below we highlight some of the new law's elements.
A (Crypto) Tale of Two (Capitol) Cities: Beijing and Washington Grapple with a Growing Industry in Their Own Unique Fashions
As the market cap of cryptocurrencies has grown to the point where mainstream financial industry players are jumping aboard the blockchain bandwagon with greater fervor than ever, and NFTs make headlines (and paydays) for famous and obscure celebrities alike, regulators in Beijing and Washington are ramping up their efforts in the space, each in its own way. In China, the moves are headline-grabbing, interventionist, and as frequently with China, perhaps less than meets the eye. Meanwhile in Washington, the approach is shambolic, incrementalistic and, as always in Washington, heavily influenced by the industry subject to the regulation. But both paths lead to greater government control over the cryptocurrency industries.
What to Expect When You're Under a CFPB Investigation – Negotiating the Scope of the CID
The CFPB has investigations underway that span the full breadth of the Bureau's enforcement authority over consumer financial services providers and their service providers. If your company is the target of CFPB investigation, which is typically initiated by issuing a Civil Investigative Demand (CID), the process is not an easy one.
The Khan Manifesto
FTC Chair Lina Khan published a memo to FTC staff urging the agency to unite behind her vision and priorities for the agency, and announcing that the elite vanguard leading Khan's effort will be acting Bureau Directors Sam Levine and Holly Vedova, both of whom will become permanent directors of the Bureau of Consumer Protection and the Bureau of Competition, respectively. Khan has previously indicated that the FTC needs to throw off its bureaucratic chains of past approaches and practices and be more aggressive in enforcing both consumer protection and competition laws.
FTC Invokes Penalty Offense Authority to Crack Down on For-Profit Education Industry
In the latest example of its creative use of different enforcement tools to obtain monetary relief in the wake of the Supreme Court's AMG opinion, the FTC has resurrected a dormant authority to hold companies accountable, via significant financial penalties, for unfair and deceptive business practices.
FTC "Blankets Industry" with Notice of Penalty Offenses Concerning Deceptive Reviews and Endorsements
Just days after the FTC announced that it was resurrecting its Penalty Offense Authority to crack down on for-profit higher education institutions' false promises about graduates' career opportunities and earnings prospects, the FTC is invoking this authority to "blanket industry with a clear message" about fake online reviews and other deceptive endorsements.