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California’s financial services regulator soon will likely have a new name and a significantly expanded mission after state lawmakers passed legislation on August 31, 2020 that would revamp the agency in the image of the U.S. Consumer Financial Protection Bureau, signaling an increased focus on fintech in particular.

In a last-minute push before adjourning for the year, the California legislature sent the California Consumer Financial Protection Law (“CCFPL”) to Governor Gavin Newsom for his approval, which is expected.  The CCFPL would change the name of the state’s current financial services regulator, the Department of Business Oversight (“DBO”), to the Department of Financial Protection and Innovation (“DFPI”). The reorganization of the California regulator under the CCFPL includes greatly expanded jurisdiction, rule-making authority, and enforcement resources to prosecute unfair, abusive, or deceptive acts or practices (“UDAAP”). The bill would take effect on January 1, 2021.…

Continue Reading The New California Consumer Financial Protection Law

This week’s U.S. Supreme Court opinion in Seila Law v. CFPB reached its most widely expected conclusion, ultimately allowing the CFPB to continue to operate. But the opinion also raises questions about previously initiated CFPB enforcement actions, and arguably raises constitutional issues about the many other federal agencies whose leaders are insulated from removal by…

In a landmark case last week, the Supreme Court held in Bostock v. Clayton Co., Ga. that the prohibition on sex-based discrimination in employment is violated when an employee is fired on the basis of homosexuality or transgender status.  This article briefly explains why that decision, based on Title VII of the Civil Rights Act…

There are widespread expectations that the Supreme Court, following an oral argument last week, may rule that part of the law that created the CFPB is unconstitutional.  As a result, many business executives, in particular, have been asking their lawyers about the likely impact of such a ruling.  These questions have included ones like:  Could…

FINRA’s examination program has undergone its most significant reorganization in decades. As stated in a press release, Oct. 1, 2018, FINRA’s goal for the reorganization was to “consolidate its Examination and Risk Monitoring Programs, integrating three separate programs into a single, unified program to drive more effective oversight and greater consistency, eliminate duplication and…

On Friday, the U.S. Supreme Court agreed to consider the constitutionality of the Dodd-Frank Act law that prohibits the President from removing a CFPB Director except for “inefficiency, neglect of duty, or malfeasance” — the so-called “for cause” restriction (see 12 U.S.C. §5491(c)(c)).  The Court’s decision to address this restriction, which the CFPB…

On Tuesday, the Consumer Financial Protection Bureau (“Bureau”) published a revised No Action Letter (“NAL”) policy aimed at offering financial innovators an avenue for obtaining more regulatory certainty before introducing new products and services. The Bureau paired its release of the revised NAL policy with an announcement of two new, related policies: one aimed at…

This post follows up on our earlier “primer” and flash alert on the Consumer Financial Protection Bureau’s proposed rule (the proposal) to implement the Fair Debt Collection Practices Act, which the CFPB released with a Fact Sheet and a Table of Contents to the proposal. Below, we describe key details of the proposal, and provide further information from stakeholders and the CFPB that has become available since the proposal’s publication.

McGuireWoods also will host a free webinar on the proposal in the coming weeks; a date will be announced soon.

Comments on all aspects of the proposal are due 90 days after it appears in the Federal Register, which should be any day now.

I. Summary of Key Points

  • The proposal would apply only to “debt collectors” as defined by the FDCPA. Importantly, owners of debt — even debt in default when purchased — would continue to fall outside the branch of the “debt collector” definition that covers those who regularly collect debts “owed or due, to another.” As a practical matter, this means that the only “first-party” collectors (i.e., collectors who own the debt) who would generally be regulated as “debt collectors” would continue to be those who operate a “business the principal purpose of which is the collection of debts.”
  • Nonetheless, many of the proposal’s requirements regarding what is unfair, deceptive or abusive under the FDCPA likely would be viewed as informing the UDAAP/UDAP analysis that applies to every person collecting consumer debts.
  • The proposal would regulate communications by debt collectors in several key ways. In particular, it would:
    • cap at seven the number of telephone calls that debt collectors may place to consumers within a seven-day window about a particular debt;
    • impose a waiting period of seven days after a debt collector has a telephone conversation with a person about a particular debt;
    • permit unlimited electronic communications about a debt, but require a debt collector to include in any e-mail, text message or other electronic communication a clear and conspicuous statement describing a way for the consumer to “opt out” from receiving any further messages through that particular medium;
    • prohibit communications about a debt via a workplace email addresses (with exceptions) and through public-facing social media platforms; and
    • create an exception to communications limits and requirements for messages satisfying the definition of a new term, “limited content message.”
  • The proposal would standardize the “debt-validation” disclosures to consumers long required by § 809 of the FDCPA.

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Continue Reading The CFPB’s Debt-Collection Proposal: Key Details and Webinar

As we anticipated last week, today the CFPB issued its much anticipated proposal to adopt the first substantive regulations to govern the activity of debt collectors under the Fair Debt Collection Practices Act (FDCPA) since that law’s passage in 1977 (Proposal).

The Proposal, which runs over 530 pages, would among other things:

  1. set limits

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