Archive: November 2015

1
Is the CFPB Coming After Marketplace Lenders?
2
CFPB Revises Supervisory Appeals Process
3
Some California Lenders May Now Pay Finder Fees to Unlicensed Referral Sources
4
D.C. District Court Decision Supports Principle of Allowing Companies to Challenge CFPB Information Requests without Fear of Public Disclosure of Investigation
5
K&L Gates Ties for Most National First-Tier Rankings in Latest U.S. News “Best Law Firms” Survey

Is the CFPB Coming After Marketplace Lenders?

The CFPB recently released its fall 2015 Rulemaking Agenda, which suggests that the CFPB may be looking to exert its supervisory authority over certain marketplace lenders.  If that is in fact the case, it would represent the agency’s first foray into this rapidly-developing credit marketplace.

The Rulemaking Agenda is released twice a year — in the spring and fall — and is where the CFPB identifies its rulemaking priorities for the short and long term.  The fall Agenda contains a list of the various substantive rulemakings already underway at the CFPB — involving arbitration provisions, payday lending, prepaid accounts, overdrafts, debt collection, mortgage servicing, and the statutorily-required rule on women-owned, minority-owned, and small businesses data collection.  These have all been publicly discussed by the CFPB before, and so they are no surprise.  Read More

CFPB Revises Supervisory Appeals Process

The CFPB recently revised its policy on Appeals of Supervisory Matters.  Supervisory appeals are an avenue for supervised entities to obtain a second opinion from CFPB headquarters about examiners’ findings.  However, the Bureau’s policy excludes the most significant matters — specifically, all aspects of enforcement — from this process.

In 1994, Congress required the federal prudential regulators to establish “an independent intra-agency appellate process” that is “available to review material supervisory determinations,” with “appropriate safeguards … for protecting the appellant from retaliation by agency examiners.”

Although the Bureau is not expressly subject to this congressional mandate, it established a similar appeals process in 2012.  The Bureau’s policy allows entities to appeal less-than-satisfactory compliance ratings (a 3, 4, or 5) and adverse findings in a supervisory letter or examination report, but not the supervisory letter or examination report itself.

None of the regulators allow a supervised entity to use the appeals process to contest the decision to pursue an enforcement action.  But in the case of the OCC, “[w]hile banks may not appeal a decision by [examiners] to pursue a formal enforcement-related action, banks may appeal conclusions in” an exam report that underlies a potential enforcement action.

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Some California Lenders May Now Pay Finder Fees to Unlicensed Referral Sources

By: Jon Jaffe,  Jeremy M. McLaughlin

California Governor Jerry Brown recently signed two bills into law that will provide Finance Lender licensees with greater flexibility in the ways in which they can obtain loan leads. One bill broadens the category of people who may refer commercial loan customers to licensees, and the other expands the role of a finder for certain unsecured loans. Both bills take effect in January 2016.

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D.C. District Court Decision Supports Principle of Allowing Companies to Challenge CFPB Information Requests without Fear of Public Disclosure of Investigation

By: Ted KornobisStephanie C. Robinson

Companies in receipt of a civil investigative demand (CID) from the Consumer Financial Protection Bureau (CFPB) are required to take a number of quick and important actions and make decisions that can have significant impact on the course and tenor of what will likely be a months- or years-long investigation. This can be a frustrating and high-pressure process, particularly given the limited practical options available under the CFPB’s rules for a CID recipient to effectively seek relief from what oftentimes can be broad and onerous requests. In particular, because of the CFPB’s policy to publicly identify any person or entity that files a petition to modify or set aside a CID, recipients of a CID generally forgo that route and instead are left to rely upon the reasonableness of the staff attorney and supervisor assigned to the matter. A recent decision in the U.S. District Court for the District of Columbia, however, may provide some measure of relief for CID recipients.

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K&L Gates Ties for Most National First-Tier Rankings in Latest U.S. News “Best Law Firms” Survey

Continuing its historically strong showing in the annual ranking, global law firm K&L Gates LLP is one of two firms to have earned 45 National first-tier rankings — the highest number of National first-tier rankings among more than 12,700 firms — in the 2016 edition of the U.S. News-Best Lawyers “Best Law Firms” survey, released today.

In total, K&L Gates earned nearly 190 first-tier rankings, including top honors in one or more practices in 19 different state and metropolitan areas, placing K&L Gates among the top three law firms in overall first-tier rankings each year since the survey’s 2010 inception. K&L Gates also was honored for a third consecutive year as the “Law Firm of the Year” in the Securities Regulation category.

To read the firm’s News Advisory, please click here.

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