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MoFo Reenforcement

The Enforcement Blog

#ThrowbackThursday: Creditor’s Rights Report

Posted in Regulatory Developments

In September 2005, Morrison & Foerster published the client alert “Creditor’s Rights Report.”


Bankruptcy reform is here. When the majority of the provisions from the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” go into effect on October 17, 2005 (certain disclosure rules in the new law are subject to further rule-making by the Federal Reserve Board), abuses in Chapter 7 bankruptcies should decrease, and more debts should be repaid—a good thing, certainly. While celebrating this long-awaited reform, however, creditors need to take steps now to prepare for the impact of this new law and ensure that their own conduct is in compliance with the new requirements.

Click here to read the full alert.

A Closer Look at the CFPB’s Proposed Short-Term Lending Rule

Posted in CFPB, Payday Lending, Regulatory Developments, UDAAP

As we previously reported in our June 3, 2016 client alert, the CFPB has issued a Notice of Proposed Rulemaking for short-term loans. In this follow-up alert, we take a closer look at the Proposed Rule and its implications for consumer lending generally. Although the Proposed Rule is often characterized as a “payday loan rule,” the rule is sweeping in terms of the products covered and the limitations it would impose.

Read our client alert.

EVENT: Master Class – Index Regulation and Outsourcing Index Administration

Posted in Events

Thursday, July 28, 2016

Registration/Breakfast: 8:00 a.m. EDT
Seminar: 8:30 a.m. – 9:30 a.m. EDT

Morrison & Foerster LLP
250 West 55th Street
New York, NY 10019

Please join Morrison & Foerster and Markit at our Master Class in New York City.

With the increased regulation of benchmark indices and index governance in Europe, market participants already are focused on compliance.  Regulation and scrutiny likely will not be limited to indices that are true benchmarks, but may well also affect proprietary indices.  During this joint program, we will discuss:

  • IOSCO and ESMA guidance on indices and proposed EU legislation;
  • Guidance and scrutiny of index governance policies and procedures;
  • Index methodologies and best practices;
  • Outsourcing index maintenance and sponsorship; and
  • Legal, regulatory and business considerations.

For more information, or to register, please click here.

CLE credit is pending for New York and California.

ACH Debit Transactions – Whose Agent Are You?

Posted in CFPB, Enforcement Actions, UDAAP

Tucked away in a seeming innocuous paragraph in a complaint, the CFPB has asserted an extraordinary and potentially far-reaching expansion of its authority.

On June 6, 2016, the CFPB filed an action in a U.S. district court asserting that Intercept Corporation (Intercept) (and each of its owners) engaged in unfair acts and practices in violation of the CFPA. Intercept initiates ACH transactions to consumer accounts on behalf of its merchant-customers. In doing so, Intercept acts as an agent of the merchant-customer, but not as an agent to the consumer whose account is being debited. Nevertheless, the CFPB complaint states that Intercept is a “covered person” under the CFPA because it provides “payments or other financial data processing products or services to consumers[.]” The complaint also states that Intercept processes transactions resulting in the transfer of funds, via the ACH system, from the deposit accounts of consumers to pay for loans and other transactions.

This is not the first complaint/enforcement order in which the CFPB has asserted that a payment processor has engaged in an unfair or deceptive practice, but this is the first action in which the CFPB has asserted that a payment processor is subject to the CFPB’s authority under this novel reading of the definition of a “covered person” under the CFPA.

Read our client alert.

CFPB Publishes Spring 2016 Regulatory Agenda

Posted in CFPB, Regulatory Developments

On June 9, 2016, the CFPB released its semi-annual regulatory agenda for Spring 2016. The agenda identifies the CFPB’s priorities through April 2017. While it does not include any major surprises, the agenda does revise the projected timeline for several highly anticipated rulemaking activities.

Read our client alert.

EVENT: Setting the New Benchmark: EU Regulation on Financial Benchmarks

Posted in Events

Wednesday, June 15, 2016
12:00 p.m. – 1:00 p.m. EDT

The new EU Regulation on indices used as benchmarks in financial instruments and contracts is expected to enter into force very shortly and to apply from early 2018. It will introduce a new regulatory regime for firms that administer, contribute to or use financial benchmarks in the EU. It will also impact non-EU benchmarks which are used in the EU. The definition of “financial benchmark” is very wide and will include some customized proprietary indices.

This teleconference will look at the relevant provisions of the regulation and consider its practical implications for benchmark administrators, users and contributors.


Continuing Education Credits:
Credit is pending for New York and California.

For more information:
Trevor Starer
(212) 336-4310

The CFPB’s Payday Lending Rulemaking is Here With Sweeping Implications for the Short-Term Credit Industry

Posted in CFPB, Payday Lending, Regulatory Developments, UDAAP

On June 2, 2016, the CFPB released its long-anticipated Notice of Proposed Rulemaking (“Proposed Rule”) on short-term lending. Although the rulemaking has been characterized as the “payday loan rule,” it is sweeping in terms of the products covered and the limitations it would impose on the short-term consumer lending industry generally. The Proposed Rule is the first federal rulemaking focusing specifically on the short-term lending industry — an industry that traditionally has been governed by state law. Announcing the Proposed Rule primarily pursuant to Title X, Section 1031, of the Consumer Protection Act of 2010 (“Act”), the CFPB cited its authority to “identify and prevent unfair, deceptive, or abusive acts or practices in the consumer financial markets” (“UDAAP”). This is significant, as it marks the first time the CFPB has used its UDAAP authority for rulemaking purposes.

Read our client alert.

#ThrowbackThursday: FTC Rescinds FCRA Commentary in Handoff to CFPB

Posted in CFPB

In July, 2011, Morrison & Foerster published the client alert “FTC Rescinds FCRA Commentary in Handoff to CFPB.”


Earlier this week, the FTC withdrew its Statements of General Policy or Interpretations under the FCRA, which includes the FTC’s Commentary on the Fair Credit Reporting Act (“Commentary”). See 16 C.F.R. pt. 600. In addition, the FTC released a staff report—“Forty Years of Experience with the Fair Credit Reporting Act”—providing background on the FTC’s role in connection with the FCRA, as well as compiling and updating the FTC’s interpretations from the Commentary. The FTC withdrew its Commentary and issued its staff report one day before the “Designated Transfer Date,” the appointed day on which the CFPA became effective, and authority to enforce and administer the various consumer credit protection laws, including the FCRA, transferred to the new CFPB.

Click here to read the full alert.

FTC Releases New Guidance on FCRA Compliance for Employment Background Screening Companies

Posted in Regulatory Developments

The FTC has released new guidance aimed at helping companies that conduct background screenings for employment purposes to determine whether they are “consumer reporting agencies” within the meaning of the federal FCRA. Pointing to the broad statutory definition of “consumer reports,” the guidance helpfully notes that many companies that provide information about people to employers for use in hiring and other employment decisions are, in fact, consumer reporting agencies covered by FCRA.

The guidance provides a concise summary of FCRA’s key requirements for consumer reporting agencies, including:

  • Establishing and following reasonable procedures to assure the accuracy of the information provided in the consumer report;
  • Obtaining certifications from clients establishing that (1) they will only use consumer reports for employment purposes, (2) they have complied with FCRA’s requirements, including by giving notice to and obtaining authorizations from the applicants and employees who are subjects of the consumer reports, and (3) they will use the information in consumer reports in accordance with equal opportunity laws;
  • Providing clients with information about FCRA’s requirements, including two standard form notices prepared by the Consumer Financial Protection Bureau addressed to users of consumer reports and consumers who are the subjects of consumer reports; and
  • Upholding the rights of individual consumers under FCRA, such as the rights to access their files and dispute the accuracy of information held about them.

A copy of the guidance may be found here.