Consumer Financial Services Watch

News and developments related to consumer financial services, litigation, and enforcement.

 

1
OCC Explores Special Purpose National Bank Charter for Fintech Companies
2
The Post-Election FinTech World: Are Happy Days (for Bankers) Here Again?
3
Securitization developments for Alternative Finance
4
TRUMP’S CAMPAIGN TO GO IT ALONE ON FIRST AMENDMENT CHALLENGE TO THE TCPA
5
Bankruptcy Payment Change Notice Rule Changes to Take Effect December 1, 2016
6
Leave the “Tow Truck Guy” Alone: The Ninth Circuit Rules Foreclosure of a Deed of Trust Is Not Debt Collection
7
As Campaign Draws to a Close, Trump’s First Amendment Challenge to the TCPA Continues On
8
FinCEN Looks to Financial Institutions to File SARs Regarding Cyber-Events
9
Cracking the Code: Cybersecurity for Tomorrow
10
The future of Fintech event, San Francisco, 1 November

OCC Explores Special Purpose National Bank Charter for Fintech Companies

By Judith E. RinearsonAnthony R.G. NolanRebecca H. Laird and Jeremy M. McLaughlin

On December 2, 2016, the Office of the Comptroller of the Currency (“OCC”) announced its plans to move forward with a proposal to consider applications from financial technology (“fintech”) companies to receive charters as special purpose national banks. The OCC simultaneously released a white paper detailing the program. The OCC is seeking comments on its proposal, including responses to 13 specific questions listed in the paper. The announcement is potentially significant for the fintech sector, but questions remain as to whether a special bank charter would represent a fundamental change or merely an incremental enhancement. The comment period ends on January 15, 2017.

To read the full alert, click here.

Securitization developments for Alternative Finance

K&L Gates partner Anthony Nolan will be speaking on “Securitization in Alternative Lending” at the Marketplace Lending & Alternative Financing Summit 2016 in Dana Point, California, on December 5th. This session will bring together participants with various perspectives, including investment bankers, platform representatives and service providers, in addition to Nolan’s viewpoint as a U.S. securitization and fintech lawyer. They will address recent commercial and regulatory developments that may affect the securitization of online and marketplace loans which include the impact of risk retention, which becomes effective on December 24, the implications of rating agency reform, emerging standards for asset-level representations and warranties, and the prospects for reform or rollback of Dodd-Frank consumer financial services regulation following President Trump’s inauguration in January.

The Marketplace Lending & Alternative Financing Summit is an educational forum for financial services professionals to delve into industry topics and trends to maximize returns and reduce risk in the growing field of marketplace lending. It brings together some of the thought leaders and market movers within the marketplace lending & alternative financing industry. Topics will include legal, tax and structural considerations, rating agency methodology, and information and tools for attendees to keep up with this dynamic industry. To see the agenda for the conference, please click here.

TRUMP’S CAMPAIGN TO GO IT ALONE ON FIRST AMENDMENT CHALLENGE TO THE TCPA

By Andrew C. Glass, Gregory N. Blase, Christopher J. Valente, and Michael R. Creta

On Monday, the U.S. Department of Justice (“DOJ”) declined to intervene in Thorne v. Donald J. Trump for President, Inc., 1:16-cv-04603 (N.D. Ill.). As previously discussed here, a class of plaintiffs sued President-Elect Trump’s campaign alleging violations of the Telephone Consumer Protection Act (“TCPA”) in connection with text messages sent during the campaign. In seeking dismissal of the suit, the campaign argued that the TCPA does not pass muster under the First Amendment. Specifically, the campaign asserted that Congress’s November 2015 exemption of calls relating to government debt constitutes “preferential treatment” and qualifies as a “blatant and egregious form of content discrimination.”

The DOJ did not provide a reason for declining to intervene, and the campaign is now faced with the prospect of going it alone in its First Amendment challenge to the TCPA.

Bankruptcy Payment Change Notice Rule Changes to Take Effect December 1, 2016

By Phoebe S. Winder and Ryan M. Tosi

On December 1, 2016, the amendments to Bankruptcy Rule 3002.1 aimed at clarifying when a secured creditor must file a payment change notice (“PCN”) in a Chapter 13 bankruptcy take effect. The new rule requires secured creditors to file PCNs on all claims secured by the Chapter 13 debtor’s primary residence for which the debtor or Chapter 13 Trustee is making post-petition payments during the bankruptcy, without regard to whether the debtor is curing a pre-petition arrearage. The new rule also clarifies that the PCN requirement ceases once the creditor obtains relief from stay, unless the court orders otherwise.

Our prior alerts and articles detailing the amendments can be viewed at:

Take Notice of This Change: Supreme Court Adopts Recommended Amendments to Bankruptcy Notice of Payment Change Rule

Advisory Rules Committee Adopts Amendments to Bankruptcy Rule 3002.1

Have You Noticed Your Payment Change? Advisory Rules Committee Proposes Amendments to Bankruptcy Rule 3002.1

 

Leave the “Tow Truck Guy” Alone: The Ninth Circuit Rules Foreclosure of a Deed of Trust Is Not Debt Collection

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Joshua Butera

The Ninth Circuit recently clarified when a trustee of a deed of trust acts as a debt collector under the Fair Debt Collection Practices Act (“FDCPA”). In a break from other courts of appeal, the Ninth Circuit held that when a trustee carries out the contractual and statutory requirements for foreclosing property subject to the deed of trust, the trustee does not act as a debt collector. The Ninth Circuit reasoned that in so acting, the trustee does not seek to collect monetary debt from the debtor. In so holding, the court broke with other courts of appeals.

To read the full alert, click here.

As Campaign Draws to a Close, Trump’s First Amendment Challenge to the TCPA Continues On

By Andrew C. Glass, Gregory N. Blase, Christopher J. Valente, and Michael R. Creta

Donald Trump’s presidential campaign recently moved to dismiss a Telephone Consumer Protection Act (“TCPA”) claim on First Amendment grounds. Thorne v. Donald J. Trump for President, Inc., 1:16-cv-04603 (N.D. Ill.). The class-action complaint alleged that the campaign violated the TCPA by sending text messages without permission. In response, the campaign argued that the TCPA’s prohibition on the use of automatic telephone dialing systems (“ATDS”) for calls or text messages placed to cellular telephones, 47 U.S. Code § 227(b)(1)(A)(iii) (the “cell phone ban”), improperly regulates speech on the basis of content. Specifically, the campaign asserted that the ban cannot withstand strict scrutiny because it does not “further[] a compelling interest” and is not “narrowly tailored to achieve that interest.” Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, 564 U.S. 721, 734 (2011).

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FinCEN Looks to Financial Institutions to File SARs Regarding Cyber-Events

By Mark A. Rush, Stanley V. Ragalevsky, Rebecca H. Laird, and Samuel P. Reger

On October 25, 2016, the Financial Crimes Enforcement Network (“FinCEN”) issued an advisory (the “Advisory”) explaining the obligations a “financial institution” might have under the Bank Secrecy Act (“BSA”) regarding “cyber-events and cyber-enabled crime.” The Advisory states that even if an actual financial transaction did not take place as result of a cyber-event, a financial institution may still be required to file a Suspicious Activity Report (“SAR”) in certain circumstances. Because of this, a covered financial institution should reconsider its obligations under the BSA after a cyber-event.

To read the full alert, click here.

Cracking the Code: Cybersecurity for Tomorrow

Please join K&L Gates and Carnegie Mellon University for a complimentary one-day program focusing on the prevention of, response to and investigation of cyber threats.

Date/time: Thursday, November 10, 8:00 am – 5:15 pm

Location: This event will be presented live at K&L Gates Pittsburgh and video broadcast to K&L Gates offices in Boston, Charleston, Charlotte, Harrisburg, Newark, New York, Raleigh, Research Triangle Park, and Washington, D.C.

Click here for more information and registration details.

The future of Fintech event, San Francisco, 1 November

K&L Gates will be co-hosting an event with the Silicon Vikings in San Francisco on Tuesday November 1st. This will be a panel session with presenting companies including: Checkbook, bitwage, StratiFi and Qwil. An event not to be missed.

The panel will include:

  • Sanjiv Das, Professor of Finance, Santa Clara University
  • Jacob Sisk, VP Payments & Data Science, CapitalOne
  • Tyler He, Business Development, Tencent
  • Moderator & Event Chair: Shikhar Das, Assistera

Details of the event:

  • Date/time: Tuesday, November 1st, 6.00 pm – 8.30 pm
  • Location: K&L Gates, 4 Embarcadero Center, Suite 1200, San Francisco, CA 94103 (google maps)
  • Register: Click here for more details or to register to attend

For any queries, please contact K&L Gates partner, Lars Johansson.

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