Consumer Financial Services
Helping Consumer Financial Services Clients Navigate a Sea of Change
In the wake of a worldwide economic slowdown—blamed in large part on ineffective regulatory oversight of the mortgage loan and credit card industries and resulting consumer defaults—financial regulation has grown dramatically, with a focus on consumer protection. Financial institutions, as well as nonbank providers of consumer financial products and services, now face increased scrutiny and an expanding universe of new regulations and laws. This expansion will continue unabated for the foreseeable future, as new rules are adopted under the Dodd-Frank Act and as the Bureau of Consumer Financial Protection (the CFPB) begins to exercise its powers. Aggressive investigations and enforcement campaigns by State Attorneys General, along with plaintiffs’ attorneys taking advantage of regulatory changes with a spate of class action lawsuits, will further challenge the financial services industry.
Manatt’s Consumer Financial Services practice can help you navigate this rapidly evolving regulatory environment. Our interdisciplinary team of lawyers and advisors has extensive experience in—and an in-depth understanding of—the laws and regulations governing consumer financial products and services. We can assist you in developing and implementing compliance programs, as well as defending consumer litigation and regulatory enforcement actions.
Experience Across a Broad Spectrum of Financial Services and Products
Manatt provides practical, sophisticated and comprehensive advice to a wide range of institutions offering financial services and products. Our team is unique in having substantial experience representing not only traditional sources of consumer financial products and services—such as community banks, global financial institutions, mortgage lenders and payment card companies—but also nonfinancial companies offering products and services or engaging in billing and collection practices that fall within the scope of the new regulations. These companies include:
Brick-and-mortar, catalog and online consumer goods marketers and retailers
Entertainment and media businesses
Technology and telecommunications companies
Our practice's offices in Washington, D.C., and throughout New York and California allow our attorneys to stay on top of current developments, trends and regulations affecting clients' business objectives and priorities.
Credit Products
In today’s heightened regulatory environment, the CFPB scrutinizes and regulates credit products extensively. Our Consumer Financial Services practice closely monitors developments at the Bureau and regularly works with staff attorneys, providing advice regarding the large and growing number of laws that regulate extensions of credit to consumers and assisting clients in submitting comment letters on proposed regulations. Much of our work focuses on the increasing overlap between products and services offered by nonfinancial institutions and the expanding reach of consumer financial protection laws.
The federal and state consumer credit laws on which we regularly provide guidance include:
The Truth in Lending Act and Regulation Z
The Real Estate Settlement Procedures Act of 1974 and state mortgage laws and regulations, including loan originator licensing and compensation rules and foreclosure requirements
The Fair Credit Reporting Act, advising consumer reporting agencies as well as users of prescreened lists and other consumer reports and scores
The provisions of the Electronic Fund Transfer Act and Regulation E impacting upon consumer credit, including recurring payment plans
The Fair Debt Collection Practices Act and state debt collection rules
State lender licensing and usury laws, including rules targeting payday and other high-rate loans
State retail installment sales acts
Federal preemption applicable to federally chartered lenders after the Dodd-Frank Act
Deposit Products and Operations
Our lawyers are recognized leaders in assisting banks, prepaid card issuers and others offering deposit products through the vast and complex laws and regulations that govern account and operational issues. A particular strength and focus of our practice is the structuring of cash management arrangements.
We offer insight and advice on the full array of federal and state laws governing consumer finance activities and operations, including:
Federal and state laws protecting the privacy of consumer financial information, including the Gramm-Leach-Bliley Act
Laws imposing various obligations in the event of a data breach
Unclaimed property rules
Rules governing the provision of treasury management services
Office of Foreign Assets Control and Bank Secrecy Act regulations
Restrictions on affiliate transactions and insider loans
Anti-tying prohibitions and exceptions
UCC provisions and other rules applicable to negotiable instrument disputes
Payment Cards
We represent many credit, debit and prepaid card industry members, including issuers, acquirers, payment card networks, processors, independent sales organizations, affinity and co-brand partners, and merchants. Our attorneys can advise you on a broad range of matters related to payment cards and services, including:
EFTA and Regulation E, including the Durbin Amendment
The Payment Card Industry Data Security Standards, including state laws governing privacy, data breach and codification of the PCI standards
Payment card network rules
Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act)
Federal and state laws that may impact payments
Our team can also provide advice regarding "prepaid access" products, mobile payments, alternative payment mechanisms (such as Internet, carrier billing and peer-to-peer payments), as well as other new developments in this space. In addition to our regulatory strengths, we have a great deal of experience in negotiating contracts in the payments space, including sponsorship and processing agreements among industry participants, as well as in advising our clients on industry updates and trends. We also represent our clients with respect to transactions among strategic and other buyers interested in joining this burgeoning industry.
UDAAP/Advertising and Marketing
In addition to the consumer financial services industry, marketing and advertising for its products and services are also facing closer scrutiny and tighter regulations. Our practice includes several nationally recognized lawyers in advertising, marketing and sales promotion law who regularly review the marketing and advertising campaigns of some of the world’s leading providers of consumer goods and services, including financial-related services.
Our lawyers regularly work with the FTC, State Attorneys General offices and the newly created CFPB. Our extensive dealings with these enforcement bodies provide keen insight into how the CFPB is likely to exercise its broad rulemaking and enforcement authority or prevent UDAAPs. With that insight, we can advise you as to what representations, omissions, acts or practices the CFPB likely deems unfair, deceptive, or abusive, particularly in regard to the marketing of products through social networking websites and mobile platforms, such as cell phones, apps, e-readers, location-based services and QR codes.
We regularly provide advice on the full range of marketing laws and regulations, including:
The UDAAP provisions of the Dodd-Frank Act
Section 5 of the FTC Act
State "mini-FTC acts" and other unfair and deceptive acts and practices statutes and unfair competition laws
Federal and state telemarketing laws as they relate to the provision of consumer financial products and services
Federal and state gift card rules, including the gift card provisions of federal Regulation E
Firsthand Experience With Government Relations
Manatt’s bipartisan government relations team is significantly involved in the implementation of the Dodd-Frank Act on behalf of our clients. We monitor issues of interest at the congressional and agency levels, as well as work with a coalition of interest groups who share similar legislative and regulatory goals.
Our team includes former members of Congress and former congressional committee staff members. Our deep and extensive relationships in the House of Representatives and Senate enable us to advocate for legislative changes, work to block problematic bills, and ask members of Congress to weigh in with respect to matters involving the CFPB. We have also assisted a number of clients in drafting comments to proposed rules, guidance and other agency proposals published by the CFPB and other financial services regulatory agencies.
Manatt also has significant relationships with state legislators and regulators nationwide through our government relations practices based in our Sacramento, Albany and Los Angeles offices. Our state regulatory attorneys can help you stay abreast of developments on the state law front—particularly as they relate to the partial rollback of federal preemption in the Dodd-Frank Act.
Defending Against Enforcement Actions
Our Consumer Financial Services practice includes lawyers with a strong track record of success defending clients in enforcement actions brought by federal banking agencies, the FTC and State Attorneys General offices. We also have a growing base of experience advising clients on issues arising during CFPB examinations.
Litigation Experience Our Clients Can Rely On
More than half of Manatt’s professionals are litigators, including some of the most respected trial lawyers in the country. Among them are those who have substantial experience defending actions involving consumer financial products and services, leveraging the knowledge of our consumer compliance attorneys to develop an effective response strategy. A particular area of experience and focus for our team is the drafting and implementation of effective arbitration clauses in the consumer context.
We have successfully represented banks, finance companies, insurance companies, hedge funds and other institutional lenders, as well as nonfinancial companies offering products and services falling within the sphere of consumer financial protection laws. They include brick-and-mortar and online retailers, publishers and subscription services, telecommunication and satellite television service providers, TV networks and affiliates, and production companies. Matters have ranged from individual consumer and class action suits to civil actions initiated by Attorneys General and regulatory agencies.
Lawsuits handled by our litigators include matters asserting claims under the following laws, among others:
TILA and Regulation Z
FCRA, including amendments made by the Fair and Accurate Credit Transactions Act of 2003
EFTA and Regulation E
RESPA and state mortgage lending laws
Federal and state UDAAP and other unfair competition laws
Telephone Consumer Protection Act