Consumer Financial Protection
Kelley Drye attorneys closely monitor developments and counsel clients in the highly regulated area of consumer financial services and bring experience that is invaluable in the context of an uncertain future regulatory environment.
After a decade of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the regulation of the nation’s financial system has been reformed. Designed to promote financial stability and transparency, the law aims to protect consumers from abusive and deceptive practices and established the Consumer Financial Protection Bureau (CFPB) to oversee and regulate consumer financial products and services. Practice group co-chair, William MacLeod, recently finished an assignment on a Taskforce appointed by the CFPB Director to review and report on the effectiveness of the laws the Bureau enforces. The report and recommendations are the most comprehensive assessment of consumer financial protection available.
Kelley Drye’s integrated consumer financial protection team advises clients on new regulations, what the changes mean for their businesses and how the CFPB enforces the laws. Our firm has been actively engaged in enforcement actions before the Federal Trade Commission (FTC) and CFPB on behalf of financial firms, and in advocacy before the CFPB on rulemaking and examination issues on behalf of debt collection and debt buying firms.
The firm is watching closely the progression of the CFPB’s supervision, rulemaking and enforcement priorities. In addition, the CFPB will continue to rely on its authority to bring enforcement actions against financial institutions within its jurisdiction for alleged “unfair, deceptive, and abusive acts and practices” (UDAAP). Much of the agency’s UDAAP enforcement follows the concepts the FTC has applied for decades. The two agencies share rulemaking and enforcement authority with respect to certain financial institutions, and the CFPB draws heavily from FTC jurisprudence for entities offering consumer financial products and services. Kelley Drye is uniquely positioned to counsel on how the CFPB interprets and enforces the law.
On behalf of our clients, we pay particular attention to Dodd-Frank Title X regulations in the following areas:
Abusive, unfair and deceptive practices. Rules identifying unlawful, unfair, deceptive or abusive acts or practices in connection with any transaction for a consumer financial product or service.
Information disclosures. Rules to ensure that the features of any consumer financial product or service are fully, accurately and effectively disclosed to consumers in a manner that permits consumers to understand the costs, benefits and risks associated with the product or service.
Single mortgage loan disclosure. Rules that combine certain disclosures required under the Truth In Lending Act and the Real Estate Settlement Procedures Act into a single integrated disclosure for mortgage loan transactions.
Mortgage loan practices. Rules relating to unfair or deceptive acts or practices regarding mortgage loans, which may include unfair or deceptive acts or practices involving loan modification, foreclosure rescue services and reverse mortgages.
Debt collection. Rules with respect to the collection of debt by debt collectors.
Arbitration Provisions. Rules regarding the use of arbitration provisions between companies and consumers for financial products and services.
Outside the scope of the CFPB, Kelley Drye’s consumer financial protection attorneys offer a range of services for financial institutions and non-financial services providers, including finance companies, traditional and online merchants and telecommunications companies. If a business has any financial interaction with consumers, it may be subject to a host of statutes, some of which include the Electronic Funds Transfer Act, the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), the Federal E-SIGN Act, the Gramm-Leach Bliley Act, the Payment Card Industry Data Security Standard, state and federal Unfair and Deceptive Trade Practices Act, and federal and state consumer disclosure and notice requirements. We help companies minimize advertising and privacy risks, providing practical advice on fair credit best practices, data security, information sharing, payment programs and permissible cross-marketing practices.
Drawing on our deep bench of nationally known litigators, Kelley Drye offers experience in rigorous investigation, dispute resolution and litigation in responding to state and federal regulators, managing Attorney General and federal investigations, and litigating matters ranging from white collar criminal defense to defense of major national class actions.
Represented a major third-party servicer in a confidential investigation before the CFPB.
Advise a peer-to-peer lending platform on FCRA and TILA compliance.
Successfully negotiated a settlement for a national debt buyer in FTC investigation.
Represented one of the largest money transfer services to settle FTC allegations that the company allowed its money transfer system to be used by fraudulent telemarketers. Advised client on implementation of an anti-fraud and agent-monitoring program.
Represented one of the largest debt collection agencies to settle FTC allegations that the company’s collection techniques violated the FTC Act and FDCPA.
Settled FTC allegations regarding cancellation and rebate delivery issues. Also represented the companies in settlement of allegations regarding cancellation, reactivation, telephone billing and disclosure of terms of service with 48 state Attorneys General.
Represent debt portfolio management company regarding information requests under Section 6(b) of the FTC Act. The FTC will use the information in connection with a study of the debt-buying industry.
Advised a major clothing and luxury lifestyle retailer on employment-related privacy matters, including disclosures related to the FCRA.
Represented a popular children’s specialty retailer in an FTC investigation of the company’s in-store and online privacy practices. Successful in convincing the FTC to close the investigation without pursuing law enforcement or remedial action.
Provide comprehensive privacy and data security advice for a major online retailer. This includes advising on compliance with COPPA, CAN-SPAM and relevant FTC and state consumer protection, privacy and data security laws.
For various types of retailers, develop online payment processes and recurrent billing programs, consistent with federal E-SIGN requirements and Regulation E and related state laws.
Represented the financing division of a Fortune 50 computer and technology company in investigations initiated by the FTC in connection with the company’s financing promotions. The FTC staff closed the matter.
Represented a Fortune 50 computer and technology company and its financial services arm in obtaining settlement with attorneys general of 49 states, resolving allegations related to clients’ financing promotions, service contract and warranty offers, and rebate fulfillment. Case settled by payment of $4,075,000 for consumer redress, costs, penalties and disgorgement (averaging less than $85,000 per state) and implementation of injunctive relief.
Represented numerous credit counseling companies as defendants that resulted in settlement of FTC and state attorneys general allegations regarding unfair and deceptive practices in the offering of credit counseling and debt management programs.
Represented a financial services company and its subsidiary in an FTC challenge to the parent company’s credit card marketing practices. The FTC also alleged that the debt collection company engaged in deceptive conduct in marketing credit cards as part of its debt collection activities and violated the FDCPA.
Assisted an association of credit and collection professionals in the development of a self-regulatory program for the debt collection industry.
Represented an Internet retailer in settlement of allegations brought by the Attorney General of the State of New York regarding the use of “data pass” of consumer financial information. Also assisted in the settlement of nationwide class action with similar allegations.
Obtained summary judgment for defendant, a call center and debt collection company, in a putative class action challenging ordinary course-of-business call-monitoring practices under the FDCPA and California privacy statutes.
Represented back-end processor in FTC’s largest case at the time in the credit counseling industry.
Represent a satellite and digital TV provider in litigation initiated by the Department of Justice on behalf of the Federal Trade Commission and the states of North Carolina, Illinois, Ohio and California seeking civil penalties for violations of the FTC’s Telemarketing Sales Rule by allegedly calling telephone numbers listed on the Do Not Call Registry.
Represented a national financial services company in FTC investigation of Gramm-Leach-Bliley Safeguards Rule violations, resulting in closing of investigation.
Settled allegations brought by three state attorneys general regarding unfair and deceptive practices related to prepaid telephone companies.