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Covington’s industry-leading Consumer Financial Services practice focuses on:
Our deep understanding of the regulatory scheme, informed by our prior experience in senior policymaking positions at financial regulatory agencies, allows our clients to anticipate the evolving expectations of the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), banking agencies, and other federal and state regulators.
We help clients comply with increasingly complex laws and regulations governing consumer financial products. Our lawyers provide exceptional coverage of the major substantive areas of consumer financial services, including credit reporting, financial privacy and data security; unfair, deceptive, or abusive acts or practices (UDAAPs); fair lending; account servicing and debt collection; payment products and payment systems; overdrafts and deposit products; and all forms of consumer credit.
Our clients include financial institutions, non-bank financial services firms, trade associations, and financial technology and services companies who seek our advice on a wide range of issues. These include: product development and design; marketing, origination, servicing, and collections; financial privacy and data security; and rulemaking proceedings and policy initiatives.
Our work regularly involves assisting clients with CFPB examinations and responding to examination findings, responding to Civil Investigative Demands and other regulatory inquiries, and representing clients in CFPB and FTC investigations, enforcement actions, and settlement negotiations. We also handle a variety of consumer financial services litigation matters, including the defense of class actions, in collaboration with our Litigation group.
We also advise clients on consumer financial services regulatory issues related to mergers and acquisitions, licensing and joint venture agreements, strategic alliances, and other transactions.
Represent the former GE Capital Retail Bank (now Synchrony Financial) in a CFPB investigation, enforcement action, and consent order related to allegations of deceptive marketing of credit card add-on products and discrimination against Spanish-speaking customers related to certain offers to settle outstanding credit card balances and a Department of Justice enforcement action and consent order regarding the same allegations of discrimination.
Represent Portfolio Recovery Associates, a large debt collection firm, in a CFPB investigation and enforcement action that resulted in the negotiation and implementation of a consent order.
Advise numerous financial institutions and non-bank financial services firms on unfair, deceptive, or abusive acts or practices (“UDAAPs”), fair lending, overdraft programs, credit cards, installment loans, and other consumer credit products, payments and payment systems, military lending, and managing vendor and other third-party relationships.
Represent industry trade associations, including the Online Lenders Alliance, Consumer Data Industry Association, and American Bankers Association, in connection with CFPB and FTC regulatory strategy and policy advocacy, preparing comment letters on CFPB rulemakings, and amicus briefs.
Advise numerous financial technology and services companies, including consumer reporting agencies, payment processors, and technology providers, on issues related to consumer credit reporting, financial privacy and data security, payment processing and payment systems, and state licensing requirements.
Represent Wells Fargo & Co. and Wells Fargo Financial, Inc. in connection with a Federal Reserve Board investigation, enforcement action involving allegations of customer income alteration and customer steering by Wells Fargo Financial sales personnel in originating nonprime mortgage loans—and with implementation of the resulting consent order.
December 6, 2016, Covington Alert
Without much fanfare, the Consumer Financial Protection Bureau (the “Bureau,” or “CFPB”) recently released its Fall Unified Regulatory Agenda (“URA”), which describes the Bureau’s regulatory priorities for the next six months. The URA outlines fairly ambitious plans for the coming months, including final action on the controversial arbitration rule and the ...
November 22, 2016, Bloomberg BNA
Eric Mogilnicki is quoted in a Bloomberg BNA article regarding early signals that could offer insight into the regulatory landscape for financial services under the Trump administration. Mogilnicki says, “I would watch the extent to which other senators support Sen. Elizabeth Warren’s efforts on Trump administration nominees.” He adds, “Those hearings and votes ...
November 18, 2016, The Wall Street Journal
Eric Mogilnicki is quoted by The Wall Street Journal in an article regarding how Republican lawmakers may use the Congressional Review Act to block Obama-era regulations. According to Mogilnicki, “The CFPB has been working on an arbitration rule for several years, and was poised to issue a final rule in the next few months.” He continues, “It may now find that ...
November 14, 2016, The National Law Journal
Eric Mogilnicki is quoted by The National Law Journal in an article considering the effect of Donald Trump’s presidency on financial regulations. Commenting on the potential impact of Trump on the existence of the CFPB, Mogilnicki says, "The president-elect has experience firing people, and he may seek to fire Director Cordray even if the PHH case is still ...
November 10, 2016, Bloomberg BNA
Eric Mogilnicki is quoted in a Bloomberg BNA article regarding how Donald Trump could affect the leadership and rulemaking and enforcement activities of the Consumer Financial Protection Bureau (CFPB). Commenting on the recent court decision on the constitutionality of the CFPB’s structure, Mogilnicki says, ‘‘There’s a real possibility that the en banc court ...
October 27, 2016, Bank Director
Eric Mogilnicki is quoted in a Bank Director article regarding the significant impact the CFPB has had on the banking industry in its first five years of existence. According to Mogilnicki, the bureau signifies an evolution rather than a revolution in the banking industry's regulatory infrastructure. "Banks have always been concerned about compliance and ...
October 11, 2016, The National Law Journal
Eric Mogilnicki is quoted in a National Law Journal article regarding the D.C. Circuit’s decision limiting the authority of the Consumer Financial Protection Bureau. According to Mogilnicki, “If the court had ruled that the decisions of the bureau have to be made by a commission, that would cast more doubt than this ruling, which makes clear that Director ...
October 11, 2016, Covington Alert
The U.S. Court of Appeals for the D.C. Circuit today released its long-awaited decision in PHH Corp., et al. v. Consumer Financial Protection Bureau, No. 15-1177 (D.C. Cir., Oct. 11, 2016). The 110-page decision, which includes a concurrence and a concurrence in part and dissent in part, represents a significant blow to the CFPB.
September 15, 2016, Inside Privacy
On September 13, 2016, New York Governor Andrew Cuomo announced a proposed regulation that would require financial service institutions to develop and implement cybersecurity programs to prevent and mitigate cyber-attacks. The proposed regulation will be subject to a 45-day comment period once it is published in the New York State Register. The regulation will ...
August 31, 2016, Inside Privacy
The Federal Trade Commission (“FTC” or “Commission”) is soliciting public comments on its Standards for Safeguarding Customer Information (“Safeguards Rule”) as part of the systematic review of all FTC rules and guides on a 10-year schedule. The Safeguards Rule was promulgated by the Commission pursuant to the Gramm-Leach-Bliley Act’s (“GLBA”) directive for ...
July 28, 2016, Covington Alert
Today, the Consumer Financial Protection Bureau (“CFPB”) issued its outline of proposals under consideration for a debt collection rulemaking that would govern third-party debt collection activities of debt collection agencies, debt buyers, collection law firms, and loan servicers. Release of this outline of proposals signals the start of the Small Business ...
July 1, 2016, Journal of Investment Compliance
June 30, 2016, American Banker
Eric Mogilnicki is quoted in an American Banker article regarding the ways banks, credit card companies, and other financial firms may react to a CFPB proposal to limit the use of arbitration clauses. Mogilnicki, who expects transition issues as companies try to preserve old clauses, says, “There may be a flood of arbitration clauses added to contracts just ...
June 10, 2016, The National Law Journal
Eric Mogilnicki participated in a panel discussion at the American Constitution Society’s annual convention and is quoted in this National Law Journal article regarding arbitration and the future of class actions. According to Mogilnicki, federal agencies such as the Consumer Financial Protection Bureau should take a bigger role in pursuing cases, arguing that ...
May 17, 2016, Inside Privacy
The EU Network and Information Security (NIS) Directive now looks likely to enter into force in August of this year. Member States will then have 21 months to implement it into national law before the new security and incident notification obligations will start to apply to the following entities: designated* “operators of essential services” within … Continue ...
May 5, 2016, Covington Alert
Today, the Consumer Financial Protection Bureau published a proposed rule substantially curtailing the ability of financial services firms and consumers to enter into voluntary pre-dispute arbitration clauses. The proposed rule would prevent financial services providers from including arbitration clauses in consumer contracts unless those arbitration clauses ...
May 3, 2016, Law360
April 2016, Data Protection Law & Policy
March 8, 2016, Covington Alert
March 3, 2016, Inside Privacy
On March 2, 2016, the Consumer Financial Protection Bureau (CFPB) entered into a consent order with online payment systems operator Dwolla, Inc., based on allegations that Dwolla deceived consumers about its data security practices and the safety of its online payment system. The CFPB brought this action under its authority in Sections 1031(a) and 1036(a)(1) … ...
March 2016, E-Commerce Law and Policy
February 26, 2016, Covington Alert
November 10, 2014, Inside Privacy
By David Fagan and Sumon Dantiki Recently several media outlets reported that the New York State Department of Financial Services (“NYDFS”) sent a letter to many of the nation’s banks, regarding the “level of insight financial institutions have into the sufficiency of cybersecurity controls of their third-party service providers.” The letter requested financial ...
October 22, 2014, Inside Privacy
By Ani Gevorkian On Monday, the Consumer Financial Protection Bureau (CFPB) finalized a rule that promotes more effective privacy disclosures and saves the financial services industry around $17 million dollars. The new rule permits financial institutions that restrict data-sharing to post their annual privacy notices online rather than delivering them to ...
August 29, 2014, The New York Times
Covington's David Martin is quoted in this article regarding Luis Aguilar, a commissioner at the S.E.C., stating that he was concerned that the agency’s stance on cases involving executives who put misleading and fraudulent numbers into their financial filings might be weakening.
"Mr. Aguilar’s missive goes to the heart of one of the S.E.C.’s main jobs – ...
August 11, 2014, Inside Privacy
Last Friday, the FTC announced an agenda for its upcoming workshop, “Big Data: A Tool for Inclusion or Exclusion?” which will take place on Monday, Sept. 15, starting at 8:00 a.m. As we’ve previously reported, the workshop will build on recent efforts by the FTC and other government agencies to understand how new technologies affect … Continue Reading
April 22, 2014, Inside Privacy
Last week, the Securities and Exchange Commission announced that it will conduct more than 50 cybersecurity examinations to identify risks and ensure that broker-dealers and investment advisers are adequately protecting customer information. Below are some key takeaways from the Risk Alert that the SEC’s Office of Compliance Inspections and Examinations ...
April 1, 2014, Inside Privacy
By Hee-Eun Kim and Monika Kuschewsky In January 2014, a massive data leak of some 104 million credit card accounts shocked South Korea. The number of affected accounts was twice the number of the population of South Korea’s. The incident arose when a temporary employee of a personal credit rating agency that manages personal financial … Continue Reading
February 25, 2014, Inside Privacy
Data security continues to be a hot issue on Capitol Hill, and just yesterday Attorney General Eric Holder urged Congress to create a “strong, national standard” for quickly reporting data breaches to consumers. Democratic and Republican senators have been busy drafting legislation that would establish national requirements for data security and breach notice. ...