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MoFo Reenforcement

The Enforcement Blog

DOL’s Fiduciary Rule Resource Page

Posted in Regulatory Developments

The first phase of the Department of Labor’s (“DOL”) new fiduciary rule (“Fiduciary Rule”) was implemented on June 9, 2017. The Fiduciary Rule greatly expands the categories of persons who are deemed fiduciaries when dealing with retail retirement investors. It was adopted by the DOL in April 2016 together with new prohibited transaction exemptions: the Best Interest Contract Exemption (“BIC Exemption”) and the Principal Transactions Exemption (“Principal Transactions Exemption”).  For more guidance relating to the DOL’s new fiduciary rule, please visit our BD/IA Regulator blog.

EVENT: IFLR Webinar – Regulatory Burden Relief: What to Anticipate

Posted in Events, Regulatory Developments

Tuesday, July 25, 2017
10:00 a.m. – 11:30 a.m. EDT

Join us as presenters share their views and predictions regarding:

  • the Presidential Orders relating to deregulation;
  • the Treasury Department’s initial report regarding the core principles of financial regulation;
  • the Financial CHOICE Act and its principal provisions;
  • the areas of regulatory reform as to which compromise may be possible; and
  • the likely path forward for regulatory reform and what you should expect in 2017.

Speakers:

  • Oliver Ireland
    Partner, Morrison & Foerster LLP
  • Paul Kupiec
    Resident Scholar, American Enterprise Institute
  • Anna Pinedo
    Partner, Morrison & Foerster LLP

CLE credit is pending for California and New York.

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

EVENT: Complimentary Teleconference – A Closer Look into State Money Service Business Licensing Issues

Posted in Events

Thursday, June 22, 2017
5:00 p.m. – 5:45 p.m. EDT

Join us for one of our upcoming monthly telephone briefings led by members of our Fintech team.

Topic: A Closer Look into State Money Service Business Licensing Issues

This call will be an operator-assisted call of approximately 45 minutes in duration, and will be followed by a brief Q&A opportunity. We also invite you to submit questions before the start of the call. A replay will be available upon request.

In order to RSVP for the June call, and to submit questions, please click here.

CFPB Proposes Changes to Prepaid Accounts Rule

Posted in CFPB, Credit Cards, Regulatory Developments

On June 15, 2017, the CFPB released proposed revisions to its final Prepaid Accounts Rule. The Final Rule was published in November 2016 and was subsequently amended to delay the general effective date by six months, to April 1, 2018. The CFPB is seeking comments on proposed revisions to the Final Rule, as well as on two additional items related to a further delay in the effective date and a safe harbor for early compliance. Comments will be due 45 days after the proposed revisions are published in the Federal Register.

At the same time, the CFPB published an updated version of its Prepaid Rule Small Entity Compliance Guide. The Guide was updated to reflect the delayed general effective date, as well as to provide other clarifications that the CFPB determined would not require changes to the Final Rule and, thus, would not trigger the notice and comment process. The updated Guide does not address the content of the CFPB’s most recent proposed revisions.

Read our client alert.

Financial Services Report – Summer 2017

Posted in Add On Products, Arbitration, CFPB, Credit Cards, Credit Reports, Enforcement Actions, Fair Lending, Foreclosure, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, Student Lending

Summer blockbuster season is officially upon us. Have you seen Wonder Woman yet? What about Guardians of the Galaxy Part 2? It’s déjà vu all over again with Baywatch, Pirates of the Caribbean, Alien, Planet of the Apes, Transformers, Cars, Spider Man, and more Inconvenient Truths from Al Gore all coming to a theatre near you.

It’s been a blockbuster few months for financial services as well: not one, but two Supreme Court rulings, with the Supreme Court finding in one case that state credit card surcharge laws regulate speech and in the other case that the Fair Debt Collection Practices Act means what is says and doesn’t apply to firms that purchase debt and then collect on it. In the financial services version of Hamilton, there were long lines and a packed audience for the D.C. Circuit en banc oral argument in the PHH case. No one left singing a catchy tune, but we have heard lively debate on whether the court will reach the constitutional question, the RESPA issues, or both. No movie yet, but you can listen to the oral argument.

The House of Representatives has been busy as well, passing the Financial CHOICE Act on a strict party-line vote. Neither the CFPB nor Director Cordray are going anywhere yet, as you’ll see in our Report below.

We also introduce a new Report discussing BSA/AML issues. Continued regulatory scrutiny and enforcement activity have our attention. We know they have your attention too.

Read on for all the highlights in Beltway, Operations, Mortgage, Arbitration, Privacy, and FinTech.

Read our newsletter.

U.S. Treasury Department Report on Core Principles for Regulating the United States Financial System

Posted in Regulatory Developments

As required by the President’s Executive Order 13772 setting forth the core principles that should be taken into account in connection with the regulation of the U.S. financial system, the U.S. Treasury Department published a report identifying regulations inconsistent with the seven principles articulated in the order. The report is the first of series of reports. The current report addresses only the depository system and defers an evaluation of the orderly liquidation authority established by the Dodd-Frank Act. We await future reports that address the regulation of the capital markets, the asset management and insurance industries, and non-bank financial services companies. The report notes that stimulating economic growth depends, in the administration’s view, on relieving regulatory burdens on financial institutions and establishing a more efficient system of financial regulation. The report not only identifies regulations inconsistent with the core principles but also recommends changes in varying degrees of specificity and identifies whether the recommendations contemplate regulatory changes or Congressional actions. Thus the report provides both recommendations and a general road map for implementing changes.

Read our client alert.

Consumer Advisory Board – CFPB Encourages Credit Card Companies to Consider Zero-Interest Promotions in Place of Deferred-Interest Programs

Posted in CFPB, Credit Cards

On June 8, 2017, the CFPB held a Consumer Advisory Board meeting, at which CFPB Director Richard Cordray discussed deferred-interest products. The CFPB also included in a press release a sample letter that Director Cordray sent to “top retail credit card companies” expressing concern about their use of deferred-interest programs and encouraging them to consider using more transparent promotions.

Read our client alert.

OCC Guidance Suggests Flexibility for Third-Party Risk Management

Posted in Regulatory Developments

On June 7, 2017, the Office of the Comptroller of the Currency issued frequently asked questions that supplement the OCC’s 2013 guidance entitled “Third-Party Relationships: Risk Management Guidance.” The 2013 Bulletin sets forth the OCC’s expectation for banks’ due diligence and ongoing monitoring of third-party service providers, including enhanced diligence and monitoring for third parties that support critical activities. While the FAQs affirm this guidance, they provide substantial flexibility for banks to right-size their approach to third-party risk management, including with respect to banks’ financial technology partnerships. This alert highlights key aspects of the FAQs.

Read our client alert.

U.S. House of Representatives Passes the Financial CHOICE Act of 2017

Posted in Regulatory Developments

On June 8, 2017, the Financial CHOICE Act of 2017 (the “CHOICE Act”) was passed on a party line vote by the U.S. House of Representatives, with nearly all Republicans voting in support and nearly all Democrats voting against passage.

The CHOICE Act now moves to the U.S. Senate where it faces an uphill battle. This client alert provides a summary of some of the principal components of the bill.

Read our client alert.

EVENT: Complimentary Teleconference – The New Benchmark for Financial Transactions

Posted in Events

Tuesday, June 6, 2017
12:00 p.m. – 1:00 p.m. EDT
5:00 p.m. – 6:00 p.m. BST

The date for implementation of the new EU Regulation on indices used as benchmarks in financial instruments is January 1, 2018, which is rapidly approaching. The new Regulation will have a major impact on securities or other financial contracts in the EU that reference a financial benchmark (which is likely to include some customized proprietary indices).

Our speakers will be joined by representatives of IHS Markit who will share their perspectives and address issues facing industry participants.

Topics Will Include:

  • The principal features of the new Regulation and issues that need to be addressed by market participants;
  • The effect on benchmarks administered outside the EU; and
  • The relevant provisions of the Regulation and its practical implications for benchmark administrators, users and contributors.

Speakers:

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

CLE credit is pending for California and New York.