Archive: November 2017

1
Dodd-Frank Reform Efforts Intensify
2
Supreme Court Again Declines to Review Ruling That Courts Determine Availability of Classwide Arbitration
3
President Signs Congressional Resolution Overturning CFPB Arbitration Rule
4
“True Lender” Litigation Heats Up: Small Business Sues Marketplace Lender and Partner Bank, Alleging Conspiracy to Evade Usury Laws

Dodd-Frank Reform Efforts Intensify

By Daniel F. C. Crowley, Bruce J. Heiman, William A. Kirk, Karishma Shah Page, Eric A. Love, Dean A. Brazier

On November 16, Senate Banking Committee (“SBC”) Chairman Mike Crapo (R-ID) introduced S. 2155, the “Economic Growth, Regulatory Relief and Consumer Protection Act,” long-awaited Senate legislation designed to foster economic growth and reduce regulatory burdens for small- and medium-sized financial institutions. A SBC section-by-section summary of the bill is available here. Earlier this year, the House passed on a party-line vote H.R. 10, the “Financial CHOICE Act of 2017” (the “FCA”), House Financial Services Committee Chairman Jeb Hensarling’s (R-TX) bill to comprehensively reform the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). S. 2155 is narrower in scope than the House bill and has to date garnered the support of nine Democratic Senators.

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Supreme Court Again Declines to Review Ruling That Courts Determine Availability of Classwide Arbitration

By Andrew C. Glass, Robert W. Sparkes III, Roger L. Smerage, Elma Delic

The United States Supreme Court recently declined to review a ruling that courts, not arbitrators, determine the availability of classwide arbitration. Previous attempts by putative collective or class representatives to obtain certiorari on the issue were unsuccessful. See, e.g., Opalinski v. Robert Half International Inc., 61 F.3d 326, 330-35 (3d Cir. 2014) (“Opalinski I”) (For K&L Gates’ coverage on the denials of the prior petitions see here and here). The Court’s most recent decision in Opalinski v. Robert Half International Inc. suggests that the Court still does not perceive sufficient disagreement, if any, among the federal courts of appeals on the issue. 677 F. App’x 738, 740 (3d Cir. 2017) (“Opalinski II”). As a result, the trend continues that the availability of classwide arbitration is a gateway issue for the courts.

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President Signs Congressional Resolution Overturning CFPB Arbitration Rule

By Andrew C. Glass, Robert W. Sparkes III, Roger L. Smerage, Elma Delic

The President signed this week the congressional joint resolution nullifying the Consumer Financial Protection Bureau (“CFPB”) arbitration agreements rule. Following adoption by the House, the Senate, in a 50-50 split with the Vice President breaking the tie, voted last week to approve the resolution (noted in a previous post here). The CFPB can only reinstate the rule, or one that is similar, if Congress expressly authorizes it to do so in subsequent legislation.

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“True Lender” Litigation Heats Up: Small Business Sues Marketplace Lender and Partner Bank, Alleging Conspiracy to Evade Usury Laws

By David D. Christensen and Jennifer Janeira Nagle

Over the last several years, a number of U.S. state and federal government enforcement actions have challenged the viability of the bank partnership model that many marketplace lenders have used to fund consumer and small business loans. Specifically, regulators have argued that, in partnerships where the non-bank entity controls much of the funding process or the bank has little-to-no risk of loss, the non-bank entity is the “true lender.”

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