Episoder
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Special guest Alex J. Pollock, Senior Fellow with the Mises Institute and former Principal Deputy Director of the Office of Financial Research in the U.S. Treasury Department, joins us to discuss his recent blog post published on The Federalist Society website in which he urges Congress to look into the question of whether the Federal Reserve can lawfully continue to fund the CFPB if (as now) the Fed has no earnings. We begin with a review of the Supreme Courtâs recent decision in CFSA v. CFPB which held that the CFPBâs funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. Alex follows with an explanation of the CFPBâs statutory funding mechanism as established by the Dodd-Frank Act, which provides that the CFPB is to be funded from the Federal Reserve Systemâs earnings. Then Alex discusses the Fedâs recent financial statements and their use of non-standard accounting, the source of the Fedâs losses, whether Congress when writing Dodd-Frank considered the impact of Fed losses on the CFPBâs funding, and how the Fed can return to profitability. We conclude the episode by responding to arguments made by observers as to why the Fedâs current losses do not prevent its continued funding of the CFPB, potential remedies if the CFPB has been unlawfully funded by the Fed, and the bill introduced in Congress to clarify the statutory language regarding the CFPBâs funding.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, hosts the conversation.
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On May 16, 2024, the U.S. Supreme Court ruled that the CFPBâs funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. This two-part episode repurposes a recent webinar. In Part II, we first discuss the CFPBâs launch of Fair Credit Reporting Act rulemaking, proposed rule to supervise larger payment providers, proposed rule on personal financial data rights, and interpretive rule on buy-now-pay-later. We next discuss the operation of the Congressional Review Act and its potential impact on final CFPB rules if the November 2024 election results in a change in Administrations. We then discuss the impact of the SCOTUS decision on pending CFPB enforcement actions, the expected proliferation of new CFPB investigations and enforcement actions, and the CFPBâs announced hiring binge. We conclude by sharing our thoughts on what companies can do to prepare for an uptick in CFPB activity and how the CFPBâs increased staffing is likely to impact which companies will be targeted.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, moderates the discussion joined by John Culhane and Joseph Schuster, Partners in the Group, and Kristen Larson, Of Counsel in the Group.
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Manglende episoder?
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On May 16, 2024, the U.S. Supreme Court ruled that the CFPBâs funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. This two-part episode repurposes a recent webinar. In Part I, we first discuss the SCOTUS decision, the status of the CFPBâs payday lending rule that was at issue in the underlying case, and a potential new challenge to the CFPBâs funding that has been the focus of recent attention. We then discuss four cases still pending before SCOTUS in which the decisions could impact the CFPB. Next, we discuss the pending lawsuits challenging the CFPBâs final rules on credit card late fees and small business data collection and the changes to the CFPBâs UDAAP exam manual defining âunfairnessâ to include discrimination, including the background of those cases, their current status, and the non-constitutional legal challenges made by the plaintiffs in those cases. We conclude with a discussion of final and proposed CFPB rules expected to be issued soon and potential non-constitutional legal challenges to those rules.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, moderates the discussion joined by John Culhane, Richard Andreano, and Joseph Schuster, Partners in the Group, and Kristen Larson, Of Counsel in the Group.
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Special guest Professor Hal Scott of Harvard Law School joins us today as we delve into the thought-provoking question of whether the Supreme Courtâs recent decision in the landmark case of CFSA v. CFPB really hands the CFPB a winning outcome, or does the Courtâs validation of the agencyâs statutory funding structure simply open up another question: whether the CFPB is legally permitted to receive funds from the Federal Reserve if (as now) the Fed has no earnings. In other words, was the outcome in CFSA v. CFPB an illusory Pyrrhic victory for the CFPB? And, what happens next?
Our episode begins with a brief discussion of the underlying case. Professor Scott follows with an explanation of the CFPBâs statutory funding mechanism as established by the Dodd-Frank Act, which provides that the CFPB is to receive its funding out of the Federal Reserve Systemâs âearningsâ, and the Supreme Courtâs decision upholding that structure.
Then, we turn to an in-depth discussion of the op-ed Professor Scott published in the Wall Street Journal entitled âThe CFPB's Pyrrhic Victory in the Supreme Courtâ, in which Professor Scott explains that even though the CFPB's funding mechanism as written was upheld in CFSA v. CFPB, this will not help the agency now or at any time in the future when the Federal Reserve operates at a deficit â in fact, has no earnings it can legally send to the CFPB. Professor Scott describes how his focus on the Federal Reserve led him to scrutinize and then question the approach taken in the majority opinion; and then turns to an explanation of how a constitutional issue under the Appropriations Clause in fact may persist because in the absence of Fed earnings, funds paid to the CFPB arguably have not been drawn from the Treasury. We then go over possible arguments challenging the CFPBâs issuance and enforcement of regulations, and what might ensue when the federal district court takes up CFSA v. CFPB for further proceedings.
Alan Kaplinsky, former practice leader and current Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, hosts this weekâs episode.
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Our special guest this week is John Tonetti. After decades as an industry risk executive, Mr. Tonetti joined the Consumer Financial Protection Bureau (CFPB), where he worked for many years in roles including Debt Collection Program Manager, senior policy analyst, and internal consultant on numerous issues including debt collection and risk management policies and examinations. In this episode, Mr. Tonetti shares his perspectives from the point of view of an agency insider who served under every CFPB director and acting director in office to date.
We first discuss the pitfalls of the CFPBâs leadership structure, which gives a single individual broad regulatory power over âthe largest financial system that has ever existedâ, and Mr. Tonettiâs observations on the contrasting leadership and rulemaking approaches taken by the various CFPB directors and acting directors. We then turn to consideration of regulations and guidance recently proposed and adopted by the CFPB, including flaws in the agencyâs approach to obtaining and utilizing data on which its mandates are based. We ask and respond to the question of whether the CFPB, on more than one occasion, has exceeded its authority, and how the courts have reacted and likely will react.
Alan Kaplinsky, former practice leader and current Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, hosts this weekâs episode.
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Our special guests are Professor Dru Stevenson, South Texas College of Law in Houston, and Brian Knight, Senior Research Fellow, Mercatus Center at George Mason University. In this episode, we first discuss the history of âOperation Chokepoint,â the Obama-era initiative in which the FDIC and other federal banking agencies targeted banks serving payday lenders and companies engaged in other âdisfavoredâ industries. We then devote the remainder of the episode to a discussion of what is the appropriate role of bank regulators with regard to banksâ customer relationships, with our guests presenting opposing views on how regulators should use their authority to address reputational and other risks to banks arising from customer relationships.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the conversation.
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Our special guest is Professor Richard Frankel of Drexel University Thomas R. Kline School of Law and the author of a recent article on mass arbitration. In this episode, we first discuss what mass arbitration is, how it relates to class action lawsuits, and the role of public enforcement. We then discuss the industry and consumer positions on the use of mass arbitration and the empirical study conducted by Prof. Frankel for his article. We conclude with a discussion of steps that companies using arbitration provisions in their consumer agreements can take to respond to the use of mass arbitration, the application of the Federal Arbitration Act to arbitration agreements containing provisions that address mass arbitration, and the role of state regulation.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the conversation, joined by Mark Levin, Senior Counsel in the Group.
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Our special guest is Brian Johnson, Managing Director of Patomak Global Partners and former CFPB Deputy Director. In Nov. 2023, the CFPB issued a proposed rule to supervise nonbank companies that qualify as larger participants in a market for âgeneral-use digital consumer payment applications.â We first discuss the CFPBâs authority to supervise nonbank entities considered to be âa larger participant of a market for other consumer financial products or servicesâ and its previous use of that authority. We look next at how the CFPB has defined the relevant market in its current proposal and its rationale for the proposal. We then discuss the deficiencies in the CFPBâs cost benefit analysis of the proposal and how the proposal reflects changes to the CFPBâs approach to rulemaking under Director Chopra. We conclude with a discussion of possible litigation challenges to a final rule and issues companies likely to be covered by a final rule should be considering.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the conversation.
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On February 27, 2024, the U.S. Supreme Court heard oral argument in Cantero v. Bank of America, N.A., a case involving the effect of the Dodd-Frank Act on the scope of preemption under the National Bank Act (NBA). The specific question before the Court is whether, post-Dodd-Frank, the NBA preempts a New York statute requiring banks to pay interest on mortgage escrow accounts. The decision, however, could have ramifications well beyond the specific New York law at issue. This episode repurposes a recent webinar roundtable and brings together as our guests four attorneys who filed amicus briefs with the Supreme Court: Jonathan Y. Ellis, William M. Jay, and Matthew A. Schwartz, partners in private law firms, and Professor Arthur E. Wilmarth, Jr. After we review the procedural history of Cantero, our guests discuss the arguments made in favor of and against preemption in their amicus briefs and share their reactions to the oral argument and predictions for how the Court will rule.
Alan Kaplinsky, Senior Counsel and former Practice Group Leader in the firmâs Consumer Financial Services Group, moderates the discussion.
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Our special guest is Andrew Nigrinis of Legal Economics LLC and former CFPB enforcement economist. The CFPBâs final credit card late fee rule lowers the safe harbor late fee amount that card issuers other than âsmaller card issuersâ can charge to $8. We first discuss how the final rule differs from the proposed rule and the existing rule, who are âsmaller issuersâ not subject to the lower safe harbor amount, and the changes made by the final rule for larger issuers. We then look at issuersâ ability to determine late fees based on their costs, permissible fees other than late fees, the CFPBâs economic analysis underlying the final rule, and the final ruleâs likely impact on issuers and cardholders. We conclude with a discussion of the Texas lawsuit challenging the final rule and the key arguments for invalidating the rule.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the discussion, joined by John Culhane and Ronald Vaske, Partners in the Group, and Kristen Larson, Of Counsel in the Group.
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Our special guest is Ian Moloney, Senior Vice President and Head of Policy and Regulatory Affairs with the American Fintech Council (AFC). After reviewing how EWA products are used by consumers and the differences between employer- and provider-based products, we discuss the regulatory challenges faced by the EWA industry, the regulatory approaches states have taken to EWA, actions taken by the Consumer Financial Protection Bureau related to EWA, and proposed federal legislation dealing with EWA. We conclude with a discussion of AFCâs letter to the Bureau urging the Bureau to develop a regulatory approach to EWA.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the discussion, joined by Michael Guerrero, a Partner in the Group and Co-Leader of the firmâs Fintech and Payments Solutions Team.
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Our special guest is David Pommerehn, SVP, General Counsel, Head of Regulatory Affairs at the Consumer Bankers Association. In January 2024, the CFPB proposed two new rules: one restricting overdraft fees and the other prohibiting NSF fees on certain declined transactions. The proposals are among the CFPBâs latest moves in furtherance of the Biden Administrationâs âjunk feesâ agenda. In this episode, which repurposes a recent webinar, we discuss the key provisions of each proposal and entities covered, the CFPBâs justification for each proposal, the legal authority relied on by the CFPB for each proposal, business practices impacted by the proposals, and potential legal challenges.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, moderates the discussion, joined by John Culhane, a Partner in the Group, and Kristen Larson, Of Counsel in the Group.
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Our special guest is Malini Mithal, Associate Director of the FTCâs Division of Financial Practices. In this episode, which repurposes a recent webinar, we review highlights of FTC regulatory and enforcement activity in 2023 directed at protecting consumers and small businesses and discuss what to expect from the FTC in 2024 and beyond. After reviewing the FTCâs authority, we discuss important consent orders and enforcement litigation involving: alternate financing mechanisms such as cash advance apps and income share agreements; discriminatory financing and other practices, including the FTCâs use of unfairness; small business financing such as merchant cash advances; telemarketing practices; crypocurrency; and use of dark patterns. Throughout this discussion, Ms. Mithal offers compliance tips and takeaways from the consent orders and enforcement litigation. We also look at the FTCâs final CARS rule, proposed junk fees rule, and artificial intelligence-related initiatives.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the discussion, joined by John Culhane, a partner in the Group.
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Our special guest is Jeff Sovern, Professor at the University of Maryland Francis King Carey School of Law. In March 2022, the CFPB announced that it had revised its exam manual to instruct its examiners to apply the âunfairnessâ standard under the Consumer Financial Protection Act to conduct considered to be discriminatory, whether or not it is covered by federal laws that expressly prohibit discrimination. The changes were subsequently vacated by a federal district court in a lawsuit brought by several trade groups challenging the changes and the Fifth Circuit has stayed the CFPBâs appeal from that decision pending the U.S. Supreme Courtâs decision in CFSA v. CFPB. In this episode, we first review the background of the exam manual changes, the industry response, and the district courtâs decision. We then take a close look at the key arguments both in support of and against upholding the decision. We conclude with a discussion of the use of disparate impact in applying the unfairness standard to discriminatory conduct and the appropriateness of the CFPBâs use of changes to its exam manual to announce its new interpretation of the standard.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the discussion, joined by Richard Andreano, a Partner in the Group and Practice Leader of the firmâs Mortgage Banking Group.
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New Federal Communications Commission TCPA rules will mean big changes for businesses, particularly comparison shopping websites, lead generators, and other companies that regularly contact consumers via phone or text message. This episode repurposes a recent webinar. After reviewing TCPA consent requirements for calls and texts and exceptions, we look at the impact of the U.S. Supreme Courtâs 2021 Facebook decision on TCPA compliance. We then look at post-Facebook TCPA litigation, post-Facebook state law litigation involving unwanted calls and texts, and recent state legislative developments. We follow with a discussion of the FCCâs new TCPA rules addressing (1) how consumers may revoke consent to receive calls or texts and the obligations of callers and texters to honor revocation of consent requests, and (2) the application of TCPA consent requirements to lead generators. We conclude with a discussion of compliance and litigation considerations arising from the new TCPA rules.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, moderates the discussion, joined by Michael Guerrero, Daniel McKenna, Jenny Perkins, and Joel Tasca, Partners in the Group.
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On January 17, 2024, the U.S. Supreme Court heard oral argument in two cases in which the question presented is whether the Court should overrule its 1984 decision in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. That decision produced what became known as the "Chevron judicial deference framework" - the two-step analysis that courts typically invoke when reviewing a federal agencyâs interpretation of a statute. This two-part episode repurposes our webinar held in February 2024 and brings together as our guests three renowned administrative law professors, Kent Barnett, Jack Beermann, and Craig Green, and a leading Supreme Court practitioner, Carter Phillips, all of whom are experts on Chevron. In Part II, our guests share their reactions to the oral arguments, including their views on what the Justicesâ questions and comments reveal about the Justicesâ thinking, their predictions for how the Court will rule, and potential implications of the Courtâs ruling on existing and future regulations.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the discussion.
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On January 17, 2024, the U.S. Supreme Court heard oral argument in two cases in which the question presented is whether the Court should overrule its 1984 decision in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. That decision produced what became known as the "Chevron judicial deference framework" - the two-step analysis that courts typically invoke when reviewing a federal agencyâs interpretation of a statute. This two-part episode repurposes our webinar held in February 2024 and brings together as our guests three renowned administrative law professors, Kent Barnett, Jack Beermann, and Craig Green, and a leading Supreme Court practitioner, Carter Phillips, all of whom are experts on Chevron. In Part I, we first review the Chevron decision and judicial deference framework and the background of the two cases now before the Supreme Court. We then look at the history of judicial review of agency action culminating with the current challenge to Chevron deference, including the origins of judicial deference to agency action, the political shift away from judicial deference, and key post-Chevron decisions. We conclude with a discussion of the principal arguments made to the Supreme Court for upholding Chevron and for overruling Chevron.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, leads the discussion.
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Our special guest is Brad Blower, Principal and Founder of Inclusive-Partners LLC, and author of a recent blog post titled âThe CFPB Has An Opportunity to Greatly Advance the Ethical and Non-Discriminatory Use of AI in Financial Services and Should Take It.â We first discuss the lack of clear guidance from the CFPB on the non-discriminatory use of AI and the possible reasons for the CFPBâs apparent reticence to provide more specific guidance. We then identify the specific areas where additional guidance from the CFPB could be helpful and specific steps the CFPB could take to address the lack of clarity. We conclude with a discussion of where industry, in the absence of clear guidance from the CFPB, is heading in its efforts to achieve fairness when using AI without compromising the accuracy of underwriting models and what the CFPB will likely be doing over the next year to address fairness concerns.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, hosts the conversation.
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Our special guest is Richard (âRickâ) Hackett, former Assistant CFPB Director responsible for auto finance regulation and presently a member of the Board of F&I Sentinel, which supports lender compliance in the auto finance and insurance industry. In December 2023, the FTC announced its final Combatting Auto Retail Scams Rule, otherwise known as the âCARS Rule,â which sets new requirements on the sale, financing, and leasing of new and used vehicles by motor vehicle dealers. This two-part podcast episode repurposes a recent webinar. In Part II, we begin with a discussion of how the Rule impacts the sale of add-on products. We then discuss the Ruleâs impact beyond motor vehicle dealers covered by the Rule and the Ruleâs intersection with other laws and regulations, including state law and the FTCâs Used Car Rule and Proposed Rule on Unfair or Deceptive Fees. We conclude with a discussion of best practices for auto sales finance companies to help navigate the Ruleâs new requirements.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, moderates the discussion, joined by John Culhane and Michael Guerrero, Partners in the Group, and Brian Turetsky, Of Counsel in the Group.
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Our special guest is Richard (âRickâ) Hackett, former Assistant CFPB Director responsible for auto finance regulation and presently a member of the Board of F&I Sentinel, which supports lender compliance in the auto finance and insurance industry. In December 2023, the FTC announced its Combatting Auto Retail Scams Rule, otherwise known as the âCARS Rule,â which sets new requirements on the sale, financing, and leasing of new and used vehicles by motor vehicle dealers. This two-part podcast episode repurposes a recent webinar. In Part I, we begin with a discussion of the legal challenge filed by the National Automobile Dealers Association seeking judicial review of the CARS Rule, the FTCâs postponement of the Ruleâs effective date, and potential legislative challenges to the Rule. We then discuss the Ruleâs scope and key definitions, the misrepresentations that are expressly prohibited under the Rule, and the Ruleâs new disclosure requirements on dealer advertising and sales communications.
Alan Kaplinsky, Senior Counsel in Ballard Spahrâs Consumer Financial Services Group, moderates the discussion, joined by John Culhane and Michael Guerrero, Partners in the Group, and Brian Turetsky, Of Counsel in the Group.
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