Enforcement and Prosecution Policy and Trends

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On November 1, 2021, the President’s Working Group on Financial Markets (PWG), along with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) (collectively, the Agencies) issued a Report on Stablecoins (the Report).[1]   Stablecoins “are digital assets that are designed to maintain a stable value relative to a national currency or other reference assets.”[2]  The Report recommends that Congress act promptly to enact legislation addressing stablecoins[3] and signals the Biden Administration’s focus on this issue and looming enforcement from  governing agencies such as the Department of Justice (DOJ), Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).

The Report provides an overview of stablecoins and decentralized finance (DeFi) platforms more generally; risks and regulatory gaps; and the group’s recommendation.  In drafting the Report, the Agencies held discussions with key industry stakeholders, including Coinbase, Kraken, and Stripe.  While the Report signals that one day we may see clarity on relevant guidelines related to stablecoins, the Report itself offers little clarity or specific guidance to stakeholders today.Continue Reading Biden Administration Signals Focus on Cryptocurrency as President’s Working Group Issues Report on Stablecoin

How to provide financial services to limited-English proficiency (“LEP”) consumers has become a pressing legal issue. Both federal and state laws provide requirements and limitations regarding translations of financial documents. Earlier this year, the Consumer Financial Protection Bureau (“CFPB”) published a comprehensive statement encouraging financial institutions to provide services to LEP consumers. The CFPB also took enforcement action against a company for, among other things, deceptively marketing to Spanish-speaking consumers. Following the trend to protect LEP consumers, a new Nevada law, effective October 1, 2021, makes it a deceptive practice to not  provide translations for certain financial contracts, agreements and disclosures (“Nevada Law”).

Under the Nevada Law, enacted as Assembly Bill No. 359, any person, who in the course of business, advertises and negotiates certain transactions in a language other than English must provide a translation of the contract or agreement that results from the advertising and negotiations. The translation must include every term and condition of the contract or agreement.Continue Reading New Nevada Law Protects Limited-English Proficiency Consumers by Requiring Translation of Certain Financial Legal Documents

It was only just over a month ago that President Biden selected David Uejio, a long-time senior leader at the CFPB with a low public profile, to lead the agency temporarily as Acting Director.  But already, Mr. Uejio has made very significant changes at the agency, implementing what he calls a “change of direction” with sweeping announcements on a weekly basis.  Even as the Senate prepares to consider President Biden’s nominee, current FTC Commissioner Rohit Chopra, to lead the CFPB for a full term at a March 2 hearing, it is time to assess where the agency stands after the Biden Administration’s first month and the likely changes still to come.
Continue Reading The CFPB’s “Change of Direction” After 1 Month: New Goals, More Attorneys

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…

On January 7, 2020, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) released its 2020 examination priorities.  OCIE is prioritizing practices, products, and services that it believes present heightened risks to investors or market integrity.  The examination priorities are organized around seven themes, many of which build on OCIE’s priorities…

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…

With the SEC prioritizing protection of retail investors, investment advisers are facing increased scrutiny for misappropriation offenses. Adviser representatives are becoming more creative, making it harder for investment advisers to detect misappropriation. It may be easy for investment advisers to rely on software and automated-alerts to safeguard client assets, but the days of solely…

In its recently published Fall 2018 Rulemaking Agenda, the Bureau of Consumer Financial Protection announced that it is considering future rulemaking activity regarding the requirements of the Equal Credit Opportunity Act (“ECOA”) – specifically, “concerning the disparate impact doctrine in light of recent Supreme Court case law and the Congressional disapproval of a prior…

In the latest sign of regulatory scrutiny of asset-advance companies offering consumers what regulators believe are in fact regulated “credit” under federal law and “loans” under state law, the Bureau of Consumer Financial Protection (BCFP) filed its first new lawsuit under Acting Director Mulvaney last Thursday. The complaint, filed in the Central District of California,…