Explorez tous les épisodes du podcast Consumer Finance Monitor

On May 30, the Supreme Court issued its opinion in Cantero v. Bank of America, reversing and remanding the case to the Second Circuit. Rather than articulating a bright line test for preemption, the Supreme Court instructed the circuit court to conduct a “nuanced analysis” to determine whether the National Bank Act preempts a New York state law that requires the payment of 2% interest on mortgage escrow accounts. Per the Supreme Court, the Second Circuit must apply the preemption standard described in the Dodd-Frank Act, which provides that a state consumer financial law is preempted “only if” it discriminates against national banks in comparison with state banks; is preempted by another Federal law; or “prevents or significantly interferes with the exercise by the national bank of its powers,” as determined “in accordance with the legal standard for preemption in the decision of the Supreme Court of the United States” in Barnett Bank, N.A. v. Nelson. See 12 U.S.C. § 25b(b)(1).

We open today’s podcast episode, which repurposes a recent webinar roundtable covering the Cantero decision, with a new preface by moderator Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group. This preface provides an update on an important post-Cantero development: a Ninth Circuit opinion issued on August 23 in another preemption case, Kivett v. Flagstar Bank. Alan explains why the Ninth Circuit’s new opinion in Kivett applies a standard that is totally inconsistent with the instructions provided by the Supreme Court in Cantero.

Today’s episode then proceeds with a discussion featuring Alan Kaplinsky, Ballard Spahr Partner Joseph Schuster, and four attorneys who each filed an amicus brief in Cantero. These experts share their reactions and explore potential next steps and possible outcomes as the Second Circuit and other courts proceed with efforts to comply with the Supreme Court’s Cantero mandate.

The CFPB recently issued yet another final rule the agency says will help deter violations of consumer protection laws. This rule requires certain nonbank entities to register with the CFPB upon becoming subject to any order from local, state, or federal agencies or courts involving consumer protection law violations. The registry rule applies to any supervised or non-supervised nonbank that engages in offering or providing a consumer financial product or service and any of its service provider affiliates unless excluded. The CFPB will require the nonbank entities that are subject to the rule to register the specific terms and conditions on an annual basis. There will be public access to this database.

We also address the CFPB’s recent circular in which the agency stated that certain terms in consumer financial product or service contracts may constitute violations of consumer protection law. Notably, the circular states that the use of prefatory language that often appears in consumer contracts—such as “subject to applicable law” or “to the extent permitted by law”—will not immunize contract language from being deceptive.

We explain why practically every consumer contract in use today technically violates the CFPB circular. We also explain how we are helping several clients review and revise their consumer contracts to comply with the circular.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion, and is joined by John Culhane, Richard Andreano, Joseph Schuster, and Reid Herlihy, partners in the Group.

Special guest Alex J. Pollock, Senior Fellow with the Mises Institute and former Principal Deputy Director of the Office of Financial Research in the U.S. Treasury Department, joins us to discuss his recent blog post published on The Federalist Society website in which he urges Congress to look into the question of whether the Federal Reserve can lawfully continue to fund the CFPB if (as now) the Fed has no earnings. We begin with a review of the Supreme Court’s recent decision in CFSA v. CFPB which held that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. Alex follows with an explanation of the CFPB’s statutory funding mechanism as established by the Dodd-Frank Act, which provides that the CFPB is to be funded from the Federal Reserve System’s earnings. Then Alex discusses the Fed’s recent financial statements and their use of non-standard accounting, the source of the Fed’s losses, whether Congress when writing Dodd-Frank considered the impact of Fed losses on the CFPB’s funding, and how the Fed can return to profitability. We conclude the episode by responding to arguments made by observers as to why the Fed’s current losses do not prevent its continued funding of the CFPB, potential remedies if the CFPB has been unlawfully funded by the Fed, and the bill introduced in Congress to clarify the statutory language regarding the CFPB’s funding.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts the conversation.

On May 16, 2024, the U.S. Supreme Court ruled that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. This two-part episode repurposes a recent webinar. In Part II, we first discuss the CFPB’s launch of Fair Credit Reporting Act rulemaking, proposed rule to supervise larger payment providers, proposed rule on personal financial data rights, and interpretive rule on buy-now-pay-later.  We next discuss the operation of the Congressional Review Act and its potential impact on final CFPB rules if the November 2024 election results in a change in Administrations. We then discuss the impact of the SCOTUS decision on pending CFPB enforcement actions, the expected proliferation of new CFPB investigations and enforcement actions, and the CFPB’s announced hiring binge. We conclude by sharing our thoughts on what companies can do to prepare for an uptick in CFPB activity and how the CFPB’s increased staffing is likely to impact which companies will be targeted.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion joined by John Culhane and Joseph Schuster, Partners in the Group, and Kristen Larson, Of Counsel in the Group.

On May 16, 2024, the U.S. Supreme Court ruled that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. This two-part episode repurposes a recent webinar. In Part I, we first discuss the SCOTUS decision, the status of the CFPB’s payday lending rule that was at issue in the underlying case, and a potential new challenge to the CFPB’s funding that has been the focus of recent attention. We then discuss four cases still pending before SCOTUS in which the decisions could impact the CFPB. Next, we discuss the pending lawsuits challenging the CFPB’s final rules on credit card late fees and small business data collection and the changes to the CFPB’s UDAAP exam manual defining “unfairness” to include discrimination, including the background of those cases, their current status, and the non-constitutional legal challenges made by the plaintiffs in those cases. We conclude with a discussion of final and proposed CFPB rules expected to be issued soon and potential non-constitutional legal challenges to those rules.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion joined by John Culhane, Richard Andreano, and Joseph Schuster, Partners in the Group, and Kristen Larson, Of Counsel in the Group.

Special guest Professor Hal Scott of Harvard Law School joins us today as we delve into the thought-provoking question of whether the Supreme Court’s recent decision in the landmark case of CFSA v. CFPB really hands the CFPB a winning outcome, or does the Court’s validation of the agency’s statutory funding structure simply open up another question: whether the CFPB is legally permitted to receive funds from the Federal Reserve if (as now) the Fed has no earnings. In other words, was the outcome in CFSA v. CFPB an illusory Pyrrhic victory for the CFPB? And, what happens next?

Our episode begins with a brief discussion of the underlying case. Professor Scott follows with an explanation of the CFPB’s statutory funding mechanism as established by the Dodd-Frank Act, which provides that the CFPB is to receive its funding out of the Federal Reserve System’s “earnings”, and the Supreme Court’s decision upholding that structure.

Then, we turn to an in-depth discussion of the op-ed Professor Scott published in the Wall Street Journal entitled “The CFPB's Pyrrhic Victory in the Supreme Court”, in which Professor Scott explains that even though the CFPB's funding mechanism as written was upheld in CFSA v. CFPB, this will not help the agency now or at any time in the future when the Federal Reserve operates at a deficit – in fact, has no earnings it can legally send to the CFPB. Professor Scott describes how his focus on the Federal Reserve led him to scrutinize and then question the approach taken in the majority opinion; and then turns to an explanation of how a constitutional issue under the Appropriations Clause in fact may persist because in the absence of Fed earnings, funds paid to the CFPB arguably have not been drawn from the Treasury. We then go over possible arguments challenging the CFPB’s issuance and enforcement of regulations, and what might ensue when the federal district court takes up CFSA v. CFPB for further proceedings.

Alan Kaplinsky, former practice leader and current Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts this week’s episode.

Our special guest this week is John Tonetti. After decades as an industry risk executive, Mr. Tonetti joined the Consumer Financial Protection Bureau (CFPB), where he worked for many years in roles including Debt Collection Program Manager, senior policy analyst, and internal consultant on numerous issues including debt collection and risk management policies and examinations. In this episode, Mr. Tonetti shares his perspectives from the point of view of an agency insider who served under every CFPB director and acting director in office to date.

We first discuss the pitfalls of the CFPB’s leadership structure, which gives a single individual broad regulatory power over “the largest financial system that has ever existed”, and Mr. Tonetti’s observations on the contrasting leadership and rulemaking approaches taken by the various CFPB directors and acting directors. We then turn to consideration of regulations and guidance recently proposed and adopted by the CFPB, including flaws in the agency’s approach to obtaining and utilizing data on which its mandates are based. We ask and respond to the question of whether the CFPB, on more than one occasion, has exceeded its authority, and how the courts have reacted and likely will react.

Alan Kaplinsky, former practice leader and current Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts this week’s episode.

Our special guests are Professor Dru Stevenson, South Texas College of Law in Houston, and Brian Knight, Senior Research Fellow, Mercatus Center at George Mason University. In this episode, we first discuss the history of  “Operation Chokepoint,” the Obama-era initiative in which the FDIC and other federal banking agencies targeted banks serving payday lenders and companies engaged in other “disfavored” industries. We then devote the remainder of the episode to a discussion of what is the appropriate role of bank regulators with regard to banks’ customer relationships, with our guests presenting opposing views on how regulators should use their authority to address reputational and other risks to banks arising from customer relationships.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the conversation.

Our special guest is Professor Richard Frankel of Drexel University Thomas R. Kline School of Law and the author of a recent article on mass arbitration. In this episode, we first discuss what mass arbitration is, how it relates to class action lawsuits, and the role of public enforcement. We then discuss the industry and consumer positions on the use of mass arbitration and the empirical study conducted by Prof. Frankel for his article. We conclude with a discussion of steps that companies using arbitration provisions in their consumer agreements can take to respond to the use of mass arbitration, the application of the Federal Arbitration Act to arbitration agreements containing provisions that address mass arbitration, and the role of state regulation.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the conversation, joined by Mark Levin, Senior Counsel in the Group.

Our special guest is Brian Johnson, Managing Director of Patomak Global Partners and former CFPB Deputy Director. In Nov. 2023, the CFPB issued a proposed rule to supervise nonbank companies that qualify as larger participants in a market for “general-use digital consumer payment applications.” We first discuss the CFPB’s authority to supervise nonbank entities considered to be “a larger participant of a market for other consumer financial products or services” and  its previous use of that authority. We look next at how the CFPB has defined the relevant market in its current proposal and its rationale for the proposal. We then discuss the deficiencies in the CFPB’s cost benefit analysis of the proposal and how the proposal reflects changes to the CFPB’s approach to rulemaking under Director Chopra. We conclude with a discussion of possible litigation challenges to a final rule and issues companies likely to be covered by a final rule should be considering.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the conversation.

On February 27, 2024, the U.S. Supreme Court heard oral argument in Cantero v. Bank of America, N.A., a case involving the effect of the Dodd-Frank Act on the scope of preemption under the National Bank Act (NBA). The specific question before the Court is whether, post-Dodd-Frank, the NBA preempts a New York statute requiring banks to pay interest on mortgage escrow accounts. The decision, however, could have ramifications well beyond the specific New York law at issue. This episode repurposes a recent webinar roundtable and brings together as our guests four attorneys who filed amicus briefs with the Supreme Court: Jonathan Y. Ellis, William M. Jay, and Matthew A. Schwartz, partners in private law firms, and Professor Arthur E. Wilmarth, Jr. After we review the procedural history of Cantero, our guests discuss the arguments made in favor of and against preemption in their amicus briefs and share their reactions to the oral argument and predictions for how the Court will rule.

Alan Kaplinsky, Senior Counsel and former Practice Group Leader in the firm’s Consumer Financial Services Group, moderates the discussion.

Our special guest is Andrew Nigrinis of Legal Economics LLC and former CFPB enforcement economist. The CFPB’s final credit card late fee rule lowers the safe harbor late fee amount that card issuers other than “smaller card issuers” can charge to $8. We first discuss how the final rule differs from the proposed rule and the existing rule, who are “smaller issuers” not subject to the lower safe harbor amount, and the changes made by the final rule for larger issuers. We then look at issuers’ ability to determine late fees based on their costs, permissible fees other than late fees, the CFPB’s economic analysis underlying the final rule, and the final rule’s likely impact on issuers and cardholders. We conclude with a discussion of the Texas lawsuit challenging the final rule and the key arguments for invalidating the rule.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion, joined by John Culhane and Ronald Vaske, Partners in the Group, and Kristen Larson, Of Counsel in the Group.

A great number of fintechs are contemplating owning a bank or obtaining a banking charter—either a national bank charter, a state bank charter or a special purpose charter. In this episode, we are joined by our special guest Michele Alt, co-founder and partner of Klaros Group, an investment and advisory firm, and Scott Coleman, a partner in our Consumer Financial Services Group who leads our banking practice. Both Michele and Scott help banks and fintechs navigate the complicated regulatory issues that are critical to their growth and sustainability.

We discuss the reasons why fintechs might want to become banks, and why regulators are reluctant to grant them charters. Alt says that a bank charter provides a fintech with low-cost funding in the form of FDIC-insured deposits and it eliminates the applicability of myriad state licensing requirements. On the other hand, she says, there are onerous capital requirements and regulators often are reluctant to embrace innovation. We discuss how some regulators fear that fintechs are fueled by growth over profits and how it could lead to lax management practices. Regulators have reason to be concerned about those risks, and if you charter a bank, you are responsible for it.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the conversation.

Our special guest is Ian Moloney, Senior Vice President and Head of Policy and Regulatory Affairs with the American Fintech Council (AFC). After reviewing how EWA products are used by consumers and the differences between employer- and provider-based products, we discuss the regulatory challenges faced by the EWA industry, the regulatory approaches states have taken to EWA, actions taken by the Consumer Financial Protection Bureau related to EWA, and proposed federal legislation dealing with EWA. We conclude with a discussion of AFC’s letter to the Bureau urging the Bureau to develop a regulatory approach to EWA.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion, joined by Michael Guerrero, a Partner in the Group and Co-Leader of the firm’s Fintech and Payments Solutions Team.

Our special guest is David Pommerehn, SVP, General Counsel, Head of Regulatory Affairs at the Consumer Bankers Association. In January 2024, the CFPB proposed two new rules: one restricting overdraft fees and the other prohibiting NSF fees on certain declined transactions. The proposals are among the CFPB’s latest moves in furtherance of the Biden Administration’s “junk fees” agenda. In this episode, which repurposes a recent webinar, we discuss the key provisions of each proposal and entities covered, the CFPB’s justification for each proposal, the legal authority relied on by the CFPB for each proposal, business practices impacted by the proposals, and potential legal challenges.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion, joined by John Culhane, a Partner in the Group, and Kristen Larson, Of Counsel in the Group.

Our special guest is Malini Mithal, Associate Director of the FTC’s Division of Financial Practices. In this episode, which repurposes a recent webinar, we review highlights of FTC regulatory and enforcement activity in 2023 directed at protecting consumers and small businesses and discuss what to expect from the FTC in 2024 and beyond. After reviewing the FTC’s authority, we discuss important consent orders and enforcement litigation involving: alternate financing mechanisms such as cash advance apps and income share agreements; discriminatory financing and other practices, including the FTC’s use of unfairness; small business financing such as merchant cash advances; telemarketing practices; crypocurrency; and use of dark patterns. Throughout this discussion, Ms. Mithal offers compliance tips and takeaways from the consent orders and enforcement litigation. We also look at the FTC’s final CARS rule, proposed junk fees rule, and artificial intelligence-related initiatives.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion, joined by John Culhane, a partner in the Group.

Our special guest is Jeff Sovern, Professor at the University of Maryland Francis King Carey School of Law. In March 2022, the CFPB announced that it had revised its exam manual to instruct its examiners to apply the “unfairness” standard under the Consumer Financial Protection Act to conduct considered to be discriminatory, whether or not it is covered by federal laws that expressly prohibit discrimination. The changes were subsequently vacated by a federal district court in a lawsuit brought by several trade groups challenging the changes and the Fifth Circuit has stayed the CFPB’s appeal from that decision pending the U.S. Supreme Court’s decision in CFSA v. CFPB. In this episode, we first review the background of the exam manual changes, the industry response, and the district court’s decision. We then take a close look at the key arguments both in support of and against upholding the decision. We conclude with a discussion of the use of disparate impact in applying the unfairness standard to discriminatory conduct and the appropriateness of the CFPB’s use of changes to its exam manual to announce its new interpretation of the standard.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion, joined by Richard Andreano, a Partner in the Group and Practice Leader of the firm’s Mortgage Banking Group.

New Federal Communications Commission TCPA rules will mean big changes for businesses, particularly comparison shopping websites, lead generators, and other companies that regularly contact consumers via phone or text message. This episode repurposes a recent webinar. After reviewing TCPA consent requirements for calls and texts and exceptions, we look at the impact of the U.S. Supreme Court’s 2021 Facebook decision on TCPA compliance. We then look at post-Facebook TCPA litigation, post-Facebook state law litigation involving unwanted calls and texts, and recent state legislative developments. We follow with a discussion of the FCC’s new TCPA rules addressing (1) how consumers may revoke consent to receive calls or texts and the obligations of callers and texters to honor revocation of consent requests, and (2) the application of TCPA consent requirements to lead generators. We conclude with a discussion of compliance and litigation considerations arising from the new TCPA rules.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion, joined by Michael Guerrero, Daniel McKenna, Jenny Perkins, and Joel Tasca, Partners in the Group.

On January 17, 2024, the U.S. Supreme Court heard oral argument in two cases in which the question presented is whether the Court should overrule its 1984 decision in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. That decision produced what became known as the "Chevron judicial deference framework" - the two-step analysis that courts typically invoke when reviewing a federal agency’s interpretation of a statute. This two-part episode repurposes our webinar held in February 2024 and brings together as our guests three renowned administrative law professors, Kent Barnett, Jack Beermann, and Craig Green, and a leading Supreme Court practitioner, Carter Phillips, all of whom are experts on Chevron. In Part II, our guests share their reactions to the oral arguments, including their views on what the Justices’ questions and comments reveal about the Justices’ thinking, their predictions for how the Court will rule, and potential implications of the Court’s ruling on existing and future regulations.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion.

On January 17, 2024, the U.S. Supreme Court heard oral argument in two cases in which the question presented is whether the Court should overrule its 1984 decision in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. That decision produced what became known as the "Chevron judicial deference framework" - the two-step analysis that courts typically invoke when reviewing a federal agency’s interpretation of a statute. This two-part episode repurposes our webinar held in February 2024 and brings together as our guests three renowned administrative law professors, Kent Barnett, Jack Beermann, and Craig Green, and a leading Supreme Court practitioner, Carter Phillips, all of whom are experts on Chevron. In Part I, we first review the Chevron decision and judicial deference framework and the background of the two cases now before the Supreme Court. We then look at the history of judicial review of agency action culminating with the current challenge to Chevron deference, including the origins of judicial deference to agency action, the political shift away from judicial deference, and key post-Chevron decisions. We conclude with a discussion of the principal arguments made to the Supreme Court for upholding Chevron and for overruling Chevron.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion.

Our special guest is Brad Blower, Principal and Founder of Inclusive-Partners LLC, and author of a recent blog post titled “The CFPB Has An Opportunity to Greatly Advance the Ethical and Non-Discriminatory Use of AI in Financial Services and Should Take It.” We first discuss the lack of clear guidance from the CFPB on the non-discriminatory use of AI and the possible reasons for the CFPB’s apparent reticence to provide more specific guidance. We then identify the specific areas where additional guidance from the CFPB could be helpful and specific steps the CFPB could take to address the lack of clarity. We conclude with a discussion of where industry, in the absence of clear guidance from the CFPB, is heading in its efforts to achieve fairness when using AI without compromising the accuracy of underwriting models and what the CFPB will likely be doing over the next year to address fairness concerns.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts the conversation.

Our special guest is Richard (“Rick”) Hackett, former Assistant CFPB Director responsible for auto finance regulation and presently a member of the Board of F&I Sentinel, which supports lender compliance in the auto finance and insurance industry. In December 2023, the FTC announced its final Combatting Auto Retail Scams Rule, otherwise known as the “CARS Rule,” which sets new requirements on the sale, financing, and leasing of new and used vehicles by motor vehicle dealers. This two-part podcast episode repurposes a recent webinar. In Part II, we begin with a discussion of how the Rule impacts the sale of add-on products. We then discuss the Rule’s impact beyond motor vehicle dealers covered by the Rule and the Rule’s intersection with other laws and regulations, including state law and the FTC’s Used Car Rule and Proposed Rule on Unfair or Deceptive Fees. We conclude with a discussion of best practices for auto sales finance companies to help navigate the Rule’s new requirements.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion, joined by John Culhane and Michael Guerrero, Partners in the Group, and Brian Turetsky, Of Counsel in the Group.

Our special guest is Richard (“Rick”) Hackett, former Assistant CFPB Director responsible for auto finance regulation and presently a member of the Board of F&I Sentinel, which supports lender compliance in the auto finance and insurance industry. In December 2023, the FTC announced its Combatting Auto Retail Scams Rule, otherwise known as the “CARS Rule,” which sets new requirements on the sale, financing, and leasing of new and used vehicles by motor vehicle dealers. This two-part podcast episode repurposes a recent webinar. In Part I, we begin with a discussion of the legal challenge filed by the National Automobile Dealers Association seeking judicial review of the CARS Rule, the FTC’s postponement of the Rule’s effective date, and potential legislative challenges to the Rule. We then discuss the Rule’s scope and key definitions, the misrepresentations that are expressly prohibited under the Rule, and the Rule’s new disclosure requirements on dealer advertising and sales communications.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion, joined by John Culhane and Michael Guerrero, Partners in the Group, and Brian Turetsky, Of Counsel in the Group.

The CFPB and state regulators and legislators have medical debt in their crosshairs. In this episode, we’re joined by Chris Eastman, CEO of the Pendrick Group, a Cerberus portfolio company that specializes in financial services solutions for healthcare companies. We discuss the differences between medical debt and other types of debt, as well as how states have been regulating medical debt including the collection of medical debt. Mr. Eastman discusses his company’s efforts to provide cash flows into hospitals and other healthcare providers that are operating at razor-thin margins. We also discuss the CFPB’s assertion that medical debt is less predictive than other sources of debt in determining the creditworthiness of a consumer. Mr. Eastman discusses how medical debt may be a valuable indicator when assessing the financial stress of a consumer.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the conversation, and is joined by Joseph Schuster, a Partner in the group.

In October 2023, the CFPB issued a groundbreaking proposal on personal financial data. This episode, which repurposes a webinar, begins with a review of the background of the rulemaking. We then discuss key provisions of the proposal, including the entities, data, and financial products and services that would be covered, the obligations that would be imposed on covered entities, and exceptions to the proposal’s requirements. We also look at the compliance timeline, practical takeaways, and the proposal’s operational impact on covered entities. We conclude with a discussion of the CFPB’s advisory opinion dealing with consumer requests for information.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion joined by Ronald Vaske, a partner in the Group, Kristen Larson, Of Counsel in the Group, and Gregory Szewczyk, a Ballard Spahr partner and Practice Leader of the firm’s Privacy and Data Security Group.

Our special guest is Zarik Khan, Founder of Finsolute Advisors. In October 2023, the Federal Reserve Board issued a proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction. We first look at the roles of the various parties involved in a typical transaction in which a consumer uses a debit card to make a purchase from a merchant and the various fees imposed in connection with the transaction. We then discuss how the current debit interchange fee cap contained in the Fed’s final rule implementing the Durbin Amendment (Regulation II) that went into effect in October 2011 has impacted each of the parties involved in a typical debit card transaction, the Fed’s rationale for its new proposal and related study, and the proposal’s implications for each of the parties. We conclude with a discussion of the proposal’s prospects and the potential impact of a U.S. Supreme Court decision overruling Chevron on the proposal if implemented.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts the conversation.

This special podcast episode, hosted by Senior Counsel and former Consumer Financial Services Practice Leader Alan Kaplinsky, sets the stage for the upcoming oral argument in the two U.S. Supreme Court cases where the fate of Chevron deference hangs in the balance. This episode provides an essential roadmap for anyone who will listen to the oral argument or is following this critical challenge to this important doctrine.

Our special guest is Kent Barnett, Associate Dean of Academic Affairs and J. Alton Hosch Professor at the University of Georgia School of Law.

On January 17th, the U.S. Supreme Court will hear oral argument in two cases, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. U.S. Department of Commerce, presenting the question of whether the Court should overrule, or at least clarify, its 1984 decision in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. As discussed in our earlier blog, that decision established what became known as “Chevron deference”, which requires judges to accept an agency’s interpretation of federal law if indicated by the outcome of a two-step analysis defined in the Chevron decision.

In this special podcast, we first discuss the importance of Chevron deference, specifically with respect to the consumer financial services industry. We follow with an explanation of the background of the two cases to be argued, and a detailed explanation of the question now before the Court. Professor Barnett provides fascinating historical insights about the Chevron doctrine, and the political influences that first elevated it and then, more recently, have called it into question. We then explore why the Court now has agreed to reconsider Chevron, and the impact of the Chevron doctrine on the courtroom success of federal agencies.

Finally, we venture predictions as to the likely outcome of the Loper Bright and Raimondo cases, including possible clarifications that would give courts further guidance on how to apply the Chevron framework, and the potentially seismic effects that might ensue if the Court should decide to overrule Chevron completely.

We discuss various issues faced by lenders and servicers when attempting to foreclose on “zombie” mortgages, meaning second mortgages on which the borrower has not made a payment for a considerable length of time and the lender or servicer has not previously taken action to foreclose. First, we look at the CFPB’s May 2023 advisory guidance on the enforcement of time-barred mortgage loans. We then discuss defenses to foreclosure raised by borrowers, specifically that the loan was charged-off, discharged in a bankruptcy, or time-barred, and look at decisions in the states of Washington, Colorado, and Utah in which courts have addressed these defenses. We conclude with a discussion of steps that lenders and servicers should consider taking before attempting to foreclose on a “zombie” mortgage.

Melanie Vartabedian and Matthew Morr, partners in Ballard Spahr’s Consumer Financial Services Group, discuss the issues.

Our special guest is Andrea Boyack, Professor, University of Missouri School of Law. We first discuss the principles that underlie our current system of consumer contracts and the system’s role in promoting transactional efficiency and other objectives. Prof. Boyack then provides her views on why the application of traditional contract law to the modern consumer contract context is not in the best interests of consumers and offers a different approach to consumer contracts in which a consumers can shape the terms of their contracts. In particular, she explains how this approach would treat a consumer’s choice to do business with a company as legally distinct from assent to particular terms in the company’s contracts.  Prof. Boyack also shares her views on the recent Restatement of the Law of Consumer Contracts. We conclude with a discussion of the controversy that surrounds arbitration provisions, how Prof. Boyack’s new approach to consumer contracts would impact the use of such provisions, and what legal changes would be necessary to implement her approach.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts the conversation.

On October 24, 2023, the OCC, FDIC and Board of Governors of the Federal Reserve System jointly adopted final amendments to their regulations implementing the Community Reinvestment Act of 1977 (CRA). In this episode, which repurposes a webinar, we are joined by guest speaker Kenneth H. Thomas, Ph.D., Founder/CEO of Community Development Fund Advisors. After reviewing the background of the adoption of the CRA and implementing rules by the banking agencies, we discuss the key elements of the final rule. We look at the requirement for banks to delineate assessment areas in which their CRA performance will be evaluated, the tests under which banks’ CRA performance will be evaluated, the strategic plan option, and data collection and reporting requirements. In discussing the final rule’s requirements, we also consider how they apply to banks of different sizes. Throughout our discussion, Dr. Thomas provides his commentary on the final rule’s impact on the goals of CRA and CRA evaluations.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion, joined by Scott Coleman, a partner in the Group, and Sarah Dannecker, an associate in the Group.

Rewards programs drive consumer choice and activity in connection with credit cards and other financial services. The CFPB has reported the most important element by far that influences a consumer’s decision to apply for a specific credit card is the rewards program associated with the card. Further, rewards can affect the consumer's choice at the point of sale as to which card to use.

In this podcast episode, which repurposes a recent webinar, we explore recent trends in scrutiny of credit card rewards programs and other rewards programs by state and federal regulators and lawmakers. We also address laws and regulations, enforcement, emerging pitfalls, and best practices applicable to rewards programs.

We open with a review of how rewards have been treated in the CFPB's reports on the credit card market since 2013, and the significance of and learnings from these reports. We then focus on complaints and federal regulators’ enforcement activity relating to rewards programs. Next, we turn to state law developments affecting rewards programs, including laws that specifically apply to rewards programs as well as contract, interchange, and UDAP / UDAAP laws. We then delve into other topics including the current focus on airline – credit card rewards programs by the Department of Transportation and the CFPB; the CFPB’s May 2024 report about credit card rewards; and important elements card issuers should keep in mind in the context of co-brand credit card rewards programs. We then conclude with a discussion on best practices to consider in mitigating risks and maximizing the benefits of rewards programs.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates today’s episode, and is joined by Michael Guerrero and Joseph Schuster, Partners in the Group, and Kristen Larson, Of Counsel in the Group.

Special guest Professor Alan Trammell of Washington and Lee University School of Law joins us today for a deep dive into universal injunctions and the related topics of associational standing and judicial forum shopping, and how these elements come into play in litigation challenging regulations and other government policies and actions.

Recent developments in litigation critical to the consumer financial services industry have brought universal injunctions into the spotlight. We begin today’s episode by providing a working definition of a universal injunction, some historical background, and examples that illustrate the benefits, effects and power of this sweeping remedy. We then turn to an in-depth discussion of objections raised by detractors; real-world concerns that may flow from universal injunctions, including a “one and done problem” cited by Professor Trammell; and various circumstances where Professor Trammell argues universal injunctions are and are not appropriate.

We also cover associational standing and its interaction with universal injunction: whether and when a trade association should have standing to bring an action seeking relief for its members, and how and when the outcome of the action might expand into a universal injunction that also would benefit non-members. Our next areas of focus are forum shopping and judge shopping, particularly in the context of such litigation brought by an association.

We then turn to speculation as to whether and how the U.S. Supreme Court may proceed to bring some uniformity to how the courts are dealing with these issues. Our episode concludes with comments on recent input on these topics from sources such as Congress and the Judicial Conference of the United States.

Alan Kaplinsky, former practice leader and current Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts this week’s episode.

“Buy Now, Pay Later” (BNPL) products emerged relatively recently as a new approach enabling consumers to enjoy the ability to make a purchase and then pay for it over time. Today’s episode, during which we explore the evolution of BNPL products and important recent developments in BNPL regulation, is hosted by Alan Kaplinsky, former practice leader and current Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, and features Ballard Spahr Partners Michael Guerrero and Joseph Schuster.

We first discuss the structure and mechanics of BNPL products, and the benefits they afford to consumers, merchants, and creditors. Next, we turn to a discussion of regulators’ reactions to BNPL, specifically the activities of the CFPB leading up to its new interpretive rule, effective July 30th, which equates BNPL products with credit cards and characterizes BNPL providers as card issuers or creditors, thus subjecting them to the constraints and requirements of the Truth in Lending Act (TILA) and Regulation Z.

We then explore the CFPB’s BNPL interpretive rule in detail, including an analysis of the concerns raised by the CFPB in connection with BNPL offerings; the CFPB’s introduction of the “digital user account” concept and other theories to bring BNPL into the purview of TILA and Regulation Z; and the complexities and uncertainties now faced by BNPL providers as they struggle to comply.

We conclude with a look at the possibilities of a legal challenge to the CFPB’s BNPL interpretive rule, given recent Supreme Court decisions, and state law considerations for BNPL providers.

The 1978 landmark opinion in Marquette National Bank v. First of Omaha Service Corp held that under the National Bank Act, a national bank has the right to export the interest rate authorized by the state where the bank is located to borrowers located elsewhere. Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 ("DIDMCA") conferred equivalent rate exportation powers on state-chartered, FDIC-insured banks.

These interest rate exportation powers (which also extend to certain fees), coupled with technological advances in recent years and the advent of “bank-model” and “banking as a service” (BaaS) programs, have created a robust, competitive smorgasbord of credit products for consumers.

However, rate exportation, and the programs it enables, increasingly are subject to challenges from a variety of sources.

In this two-part episode, which repurposes portions of a recent webinar, we describe the nature of these attacks, the defenses being deployed by the industry, and who is winning these contests so far, and address what the future may hold for rate exportation.

We start Part II with a discussion of states that have adopted, or are considering, “true lender” statutes that aim to recharacterize fintechs and other bank service providers as lenders, thus defeating the originating bank’s ability to export rates and fees. We then discuss “true lender” enforcement actions and efforts by state attorneys general, and “true lender” litigation developments including cases where arbitration clauses have been upheld, causing arbitration to be ordered in putative class actions. Next, we talk about attacks on the “valid when made” doctrine (which provides that a loan that was non-usurious when it was made doesn't become usurious after it is transferred to a third party), and “valid when made” regulations adopted by both the OCC and FDIC. We proceed with some tips on how prevailing industry plaintiffs who seek to overturn statutes inimical to rate exportation might recover attorney’s fees. We then conclude with a review of recent and pending Supreme Court cases whose outcomes have the potential to affect rate exportation powers and related regulations.  

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates episode, joined by John Culhane, Joseph Schuster, and Ronald Vaske, Partners in the Group, and Mindy Harris and Kristen Larson, Of Counsel in the Group.

The 1978 landmark opinion in Marquette National Bank v. First of Omaha Service Corp held that under the National Bank Act, a national bank has the right to export the interest rate authorized by the state where the bank is located to borrowers located elsewhere. Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 ("DIDMCA") conferred equivalent rate exportation powers on state-chartered, FDIC-insured banks.

These interest rate exportation powers (which also extend to certain fees), coupled with technological advances in recent years and the advent of “bank-model” and “banking as a service” (BaaS) programs, have created a robust, competitive smorgasbord of credit products for consumers.

However, rate exportation, and the programs it enables, increasingly are subject to challenges from a variety of sources.

In this two-part episode, which repurposes portions of a recent webinar, we describe the nature of these attacks, the defenses being deployed by the industry, and who is winning these contests so far, and address what the future may hold for rate exportation.

In Part I, we first review a brief history of rate exportation, and explore the three primary theories used to attack rate exportation. We then focus on current and pending state laws and bills seeking to “opt out” of DIDMCA’s rate exportation authority. Next, we turn to the current court battle being waged in Colorado, where three trade groups recently won a preliminary injunction against enforcement of Colorado’s recently adopted opt-out legislation, and discuss the decision and its ramifications, including potential impacts on existing and pending opt-out legislation in other states, implications for nonmembers of the three trade group plaintiffs, and the prospects for enforcement in Colorado and other opt-out states by the FDIC based on the position (contrary to the preliminary injunction) advocated in its amicus brief.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates episode, joined by Ronald Vaske, a Partner in the Group, and Mindy Harris, Of Counsel in the Group.

California frequently is in the vanguard of consumer financial issues and legislation, foreshadowing trends that may spread to other states. Today’s episode, during which we explore important hot topics and recent developments in California consumer finance law, is hosted by Ballard Spahr partner Melanie Vartabedian, and features Partners Michael Guerrero and Joel Tasca, and Of Counsel John Kimble.

We first discuss what the future likely holds for proposed rules issued under the California Consumer Financial Protection Law (CCFPL) by the California Department of Financial Protection and Innovation (DFPI). The proposed rules include complex registration and reporting requirements for certain consumer products, and are under revision after rejection by the California Office of Administrative Law for lack of clarity. We then explore the DFPI's most recent annual report on activity under the CCFPL, which recaps the DFPI's rulemaking, enforcement efforts, complaints received, and efforts in connection with education outreach and the Office of Financial Innovation. Highlights include a rule that applies consumer-type “unlawful, unfair, deceptive, or abusive acts and practices” (referred to in the report as “UUDAAP”) prohibitions to financial products and services provided to small businesses; ramped-up enforcement efforts; and high-dollar settlements as well as litigation in progress. Next, we turn to a comparison of California’s Rosenthal Fair Debt Collection Practices with the federal Fair Debt Collection Practices Act, and discuss their similarities, differences, and litigation trends under both laws. We then focus on the California Consumer Credit Reporting Agencies Act, which poses challenges for companies that report consumer data to consumer reporting agencies over and above the requirements of federal law. We conclude with a look at unique issues arising in California with respect to the FTC “holder rule”.

On June 28, in Loper Bright v. Raimondo, et al., the Supreme Court overturned the Chevron deference doctrine, a long-standing tenet of administrative law established in 1984 in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. This doctrine directed courts to defer to a government agency’s interpretation of a statute if the statute was ambiguous regarding, or simply did not address, the issue before the court, as long as the interpretation was reasonable.

However, legal scholars now express widely divergent views as to the scope and likely effects of Loper Bright’s overruling of the Chevron doctrine on the future course of regulatory agency interpretive and enforcement authority.

In this two-part episode, which repurposes a recent webinar, a panel of experts delves into the Loper Bright decision, and its underpinnings, rationale, and likely fallout.

Our podcast features moderator Alan Kaplinsky, Senior Counsel and former practice leader of Ballard Spahr’s Consumer Financial Services Group; Ballard Spahr Partners Richard Andreano, Jr. and John Culhane, Jr.; and special guests Craig Green, Charles Klein Professor of Law and Government at Temple University Beasley School of Law, and Kent Barnett, recently appointed Dean of the Moritz College of Law at The Ohio State University.

In Part I, we first review the history of judicial deference to agency interpretations in American courts throughout the nineteenth and twentieth centuries, culminating in the advent of Chevron deference.  We then discuss post-Chevron developments, including shifts in judicial and political views of the role courts should play in interpretation of agency action.

Then, we turn to an in-depth discussion of the majority opinion in Loper Bright, authored by Chief Justice Roberts, including its reliance on the Administrative Procedure Act to invalidate Chevron deference and the opinion’s numerous ambiguities that result in a “very, very fuzzy” outcome, leaving regulated industries facing uncertainty as to whether or not courts will uphold agency rules. We then explore other topics including the majority opinion’s endorsement of an approach courts should take to review agency actions as described in a 1940’s case, Skidmore v. Swift & Co.; what deference may or may not be given to agency policy-making and fact-finding in light of Loper Bright; and the divergent views of some legal scholars who suggest that many courts will continue to give broad deference to agency views notwithstanding Loper Bright.

On June 28, in Loper Bright v. Raimondo, et al., the Supreme Court overturned the Chevron deference doctrine, a long-standing tenet of administrative law established in 1984 in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. This doctrine directed courts to defer to a government agency’s interpretation of ambiguous statutory language as long as the interpretation was reasonable. However, legal scholars now express widely divergent views as to the scope and likely effects of Loper Bright’s overruling of the Chevron doctrine on the future course of regulatory agency interpretive and enforcement authority.

In this two-part episode, which repurposes a recent webinar, a panel of experts delves into the Loper Bright decision, and its underpinnings, rationale, and likely fallout. Our podcast features moderator Alan Kaplinsky, Senior Counsel and former practice leader of Ballard Spahr’s Consumer Financial Services Group; Ballard Spahr Partners Richard Andreano, Jr. and John Culhane, Jr.; and special guests Craig Green, Charles Klein Professor of Law and Government at Temple University Beasley School of Law, and Kent Barnett, recently appointed Dean of the Moritz College of Law at The Ohio State University.

Part II opens with an in-depth discussion of the major questions doctrine (which bars agencies from resolving questions of great economic and political significance without clear statutory authority), how it has evolved, and its interaction with Chevron deference. Our experts offer predictions as to the likely role of the major questions doctrine in post-Chevron jurisprudence, and touch on the non-delegation doctrine (which prevents Congress from delegating legislative power). We also refer to the effects of another recent Supreme Court decision, Corner Post, Inc. v Board of Governors of the Federal Reserve System, which expands the time during which entities new to an industry may challenge longstanding agency rules.

We then consider the practical effects of the Loper Bright and Corner Post decisions on pending and future litigation. Partners Richard Andreano and John Culhane discuss concrete examples of cases currently progressing through the courts that already are evidencing the effects of Loper Bright, and ways in which arguments now are being articulated or might be articulated in litigation challenging a number of regulatory rules and interpretations in the absence of Chevron deference.

We proceed to explore other significant topics including the validity of prior decisions of the Supreme Court and lower courts that were based exclusively on the Chevron doctrine. Our panel then opines on whether Loper Bright, both in its entirety and as to certain of its specific constituent elements, is “good” or “bad” for the consumer financial services industry and for regulated entities in general.

In conclusion, Mr. Andreano cites concerns about how courts may apply alternative deference guidance that remains in place (including Skidmore deference, discussed in Part I of this podcast), and Mr. Culhane expresses hope that the outcome in Loper Bright might move agencies to engage in more thorough, thoughtful, and precise analysis in the rulemaking process.

On July 25, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the agencies) issued a “Joint Statement on Banks’ Arrangements with Third Parties to Deliver Bank Deposit Products and Services” to “note potential risks related to arrangements between banks and third parties to deliver bank deposit products and services to end users”. On the same day, the agencies issued a “Request for Information on Bank-Fintech Arrangements Involving Banking Products and Services Distributed to Consumers and Businesses” (the RFI)

The RFI “solicits input on the nature of bank-fintech arrangements, effective risk management practices regarding bank-fintech arrangements, and the implications of such arrangements, including whether enhancements to existing supervisory guidance may be helpful in addressing risks associated with these arrangements.” The comment period for this RFI has been extended through October 30, 2024.

In today’s podcast episode, hosted by Alan Kaplinsky, former practice leader and current Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, and featuring Ballard Spahr Partners John Culhane, Jr. and Ronald Vaske, we explore the significance of these agency actions, what they may portend for banks and their non-bank partners, and the agencies’ likely next steps and future areas of scrutiny. We also discuss tactics banks may want to consider in response to these actions and in preparation for potential future developments.

Topics addressed in this wide-ranging episode include the scope and coverage of the RFI; which banks and other entities are likely to provide information in response, and why; and the type of input that would be most valuable for banks to provide to the agencies. We review past agency pronouncements, enforcement, and other activity in connection with bank – service provider arrangements. We list and discuss in detail those risks to banks arising in connection with third-party relationships that cause regulators the greatest concerns.

We further provide some practical thoughts as to approaches banks may wish to consider now if they are contemplating a new fintech relationship, as well as ways to shore up practices and procedures in connection with existing third-party arrangements. We then conclude with some thoughts about how fintechs and other bank service providers should react to these agency initiatives

In today’s podcast, which repurposes a recent webinar, we examine the impact, if any, of a landmark opinion rendered by Judge Daniel Domenico of the Federal District Court for the District of Colorado in a case challenging recently enacted Colorado legislation on interstate loans made from outside Colorado to Colorado residents. We also address the effects this decision and the outcome of this litigation may have on interstate rate exportation by state-chartered banks across the country.

We open with a brief history of the interest rate exportation authority of national and state-chartered banks, and theories developed by opponents to attack those exportation powers. Next, we turn to a discussion of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA), the federal legislation adopted to create competitive equality between state-chartered banks and national banks by giving state banks the ability to export the interest rates and late fees allowed by the laws of the state where the bank is located, notwithstanding interest rate and late fee limitations imposed by the borrower’s state. We then focus on the “opt-out rights” conferred on states under Section 525 of DIDMCA, and states that have attempted to exercise (or broaden) this right, including Colorado’s recent adoption of an opt-out statute.

We then delve into the details of the current court challenge to the Colorado opt-out statute, including a close examination of the statute itself, the state’s enforcement position, and the complaint filed by the plaintiff trade associations seeking to strike down the statute. We review the briefs filed and oral arguments made, including amicus briefs filed by the FDIC, supporting the state, and by the American Bankers Association and Consumer Bankers Association, supporting the plaintiffs (the latter of which was submitted on behalf of these amici by Ballard Spahr, LLP). We point out that the position taken by the FDIC in its amicus brief is the exact opposite of the position taken by the FDIC in 1991 in the Greenwood Trust Company v. Commonwealth of Massachusetts case in the 1st Circuit Court of Appeals regarding a Massachusetts opt-out statute. In that case, the FDIC agreed with Greenwood, a Delaware state-chartered bank, that the Massachusetts opt-out statute had no effect on the power of a state-chartered, FDIC-insured bank like Greenwood to charge Massachusetts credit card holders the “interest” permitted by Delaware law. The FDIC never acknowledged or explained this flip-flop in its amicus brief filed or during oral argument in the Colorado statute.

We proceed with an in-depth discussion of the thorough and thoughtful opinion issued by Judge Domenico granting the plaintiffs’ motion for a preliminary injunction preventing Colorado from enforcing its opt-out statute against their members not located in Colorado who are making loans to Colorado residents from outside Colorado, pending the outcome of the litigation, holding that the plaintiffs are substantially likely to succeed on the merits. This order is currently on appeal in the Tenth Circuit and is in the process of being briefed.

We then conclude with thoughts about the potential effect of the Colorado litigation on Iowa’s opt-out statute, in place since 1980, a survey of opt-out legislation pending in other states, and how the Colorado litigation might affect the future of opt-out laws in these and other states.

Alan Kaplinsky, former Practice Leader and Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates today’s episode, and is joined by Burt Rublin, Joseph Schuster, and Ron Vaske, Partners in the Group, and Kristen Larson, Of Counsel in the Group.

Our podcast today focuses on negative option consumer contracts, i.e., agreements that allow a seller to assume a customer’s silence is an acceptance of an offer. Such contracts are ubiquitous in today’s marketplace.

Today’s guests are Kaitlin Caruso, a professor at the University of Maine Law School, and Prentiss Cox, a professor at the University of Minnesota Law School. They have written an article entitled, “Silence as Consumer Consent: Global Regulation of Negative Option Contracts.” The article is available on SSRN and will soon be published in the American University Law Review.

The Professors first describe what they perceive to be some of the consumer harms resulting from the use of negative option contracts – consumers signing up for “free trial” offers that convert to term contracts requiring consumers to pay periodic fees after the free trial period has expired; credit card “add-on” products which are sold through telemarketing, like credit life and disability insurance; subscription contracts which make it difficult for consumers to cancel; subscription contracts for services, which are not used for lengthy periods of time while the consumer continues to pay periodic fees.

The Professors then describe the existing federal and state statutes and FTC regulations and why they are inadequate to protect consumers. They point out that the current FTC negative option rule was promulgated decades before the development of the Internet and obviously does not begin to deal with online sales of goods and services. Instead, the FTC rule is intended to deal with mail order sales like the “Book-of-the-Month” club. While the FTC has proposed a new negative option rule which is a vast improvement over the existing FTC rule, it is unclear when or if a final rule will be promulgated. The Professors also describe the federal Restore Online Shoppers Confidence Act, and the FTC‘s Telemarketing Sales Rule which tangentially pertain to negative option contracts. Finally, the professors discuss a patchwork quilt of state laws (mostly part of state UDAP statutes) which deal with negative option contracts.

After surveying the existing federal and state laws, as well as negative option laws enacted in many foreign countries, the Professors describe the core elements of what a negative option law (be it state or federal) should contain in order to protect consumers. The core elements are:

1.  A prohibition against converting a “free trial” offer into a term contract;

2. A prohibition against automatically converting a negative option contract into another term contract with the contract instead becoming a month-to- month contract.  Alternatively, the negative option contract could convert to a term contract, which could then be canceled during the first 90 days after the consumer sees a charge on a credit card statement.

3. If a subscription to services is not used by the consumer for at least one year, then the seller must notify the consumer of the dormancy, and if the service remains dormant for another three months thereafter, then the seller must cease charging the consumer for the service. 

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts today’s episode.

Today’s podcast, which repurposes a recent webinar, is the conclusion of a two-part examination of the CFPB’s use of a proposed interpretive rule, rather than a legislative rule, to expand regulatory requirements for earned wage access (EWA) products. Part One, which was released last week, focused on the CFPB’s use of an interpretive rule to expand regulatory requirements for buy-now, pay-later (BNPL) products.

We open with a discussion of EWA products, briefly describing and distinguishing direct-to-consumer EWAs and employer-based EWAS. We review some of the consumer-friendly features that are common to EWAs, including that there is no interest charged and they are typically non-recourse, and discuss expedited funding fees and tips, neither of which is required to access EWAs. We also provide an overview of how some states have attempted to regulate (or specifically not regulate) EWAs.

We then transition into a discussion of the CFPB’s history with EWA products, including the Bureau’s advisory opinion in 2020 that took a markedly different approach to EWAs, essentially taking the position that a certain subset of EWAs fell outside of the definition of “credit” under the Truth in Lending Act (TILA) and Regulation Z. The CFPB’s proposed interpretive rule, on the other hand, states that EWAs are “credit” and that expedited funding fees and optional tips, in most circumstances, are part of the finance charge that must be disclosed under TILA and Regulation Z. We explore the Bureau’s reasoning in support of these conclusions and some of the compliance difficulties that the proposed interpretive rule would create were it to go into effect as written. Since this recording took place, the CFPB has posted over 148,000 comment letters that it has received on the proposed interpretive rule, many of which are from consumers who use EWAs to access a portion of their earned wages prior to their scheduled payday and are concerned that the proposed interpretive rule could limit or jeopardize their access to EWAs. The high number of responses demonstrates the level of interest that the CFPB’s proposed interpretive rule has generated.

We conclude with thoughts about vulnerabilities with both the proposed interpretive rule for EWAs and the interpretive rule for BNPLs that we described in Part One of this podcast, as well as how these rules could potentially be challenged. One notable development that has occurred since our recording is that the Financial Technology Association has filed a complaint asking a D.C. federal court to strike down the interpretive rule for BNPLs because of the alleged violations of the Administrative Procedure Act that we discuss in this episode.

Alan Kaplinsky, former Practice Leader and Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates today’s episode, and is joined by John Culhane and Michael Guerrero, Partners in the Group, and John Kimble, Of Counsel in the Group.

Today’s podcast, which repurposes a recent webinar, is the first in a two-part examination of the CFPB’s use of an interpretive rule, rather than a legislative rule, to expand regulatory requirements for buy-now, pay-later (BNPL) products. Part Two, which will be available next week, will focus on the CFPB’s use of a proposed interpretive rule to expand regulatory requirements for earned wage access (EWA) products.

We open with an overview of what interpretive rules are and how they differ procedurally and substantively from legislative rules. The intended use of interpretive rules is to explain the meaning of an existing provision of law, while legislative rules, which require a more complicated and time-consuming procedure, including a notice and comment period under the Administrative Procedures Act, are intended to be used to expand or implement a provision of law. We also discuss why the CFPB chose to use an interpretive rule and why they decided to include a request for comments when that is not required for interpretive rules.

We then discuss BNPL products, including how they work and some of the features that have made them popular with consumers and merchants. We point out that the interpretive rule seems to represent a change in the views of the CFPB with regard to BNPL. After providing an overview of the CFPB’s history with the product, including a report issued by the Bureau back in 2022, we delve into the details of the CFPB’s interpretive rule. We discuss how the CFPB seems to be expanding the definition of a “credit card” to include what the Bureau calls a “digital user account,” which is how consumers access their BNPL information.

We conclude with thoughts about the implications of the CFPB’s interpretive rule and some of the difficulties that BNPL providers will have complying with the interpretive rule. This includes a discussion of the timing of billing statements and written notice requirements for billing error disputes and merchant disputes.

Alan Kaplinsky, former Practice Leader and Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates today’s episode, and is joined by John Culhane, Michael Guerrero, and Joseph Schuster, Partners in the Group. The webinar was recorded before the CFPB issued an FAQ, which purports to answer a number of open questions raised by the BNPL interpretive rule. We recommend that you review the FAQ after listening to this podcast.

Our podcast listeners are very familiar with federal fair lending and anti-discrimination laws that apply in the consumer lending area: the Equal Credit Opportunity Act (ECOA) and Fair Housing Act (FHA). Those statutes prohibit discriminating against certain protected classes of consumer credit applicants. For example, the ECOA makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); the applicant's use of a public assistance program to receive all or part of their income; or the applicant's previous good-faith exercise of any right under the Consumer Credit Protection Act. The FHA prohibits discrimination concerning the sale, rental, or financing of housing based on race, religion, national origin, sex, disability, pregnancy or having children. The FTC sometimes relies on the “unfairness” prong of its UDAP (Unfair or Deceptive Acts and Practices) authority to bring other types of discrimination claims against companies subject to the FTC’s jurisdiction. The CFPB has tried to use the unfairness prong of its UDAAP (Unfair, Deceptive, or Abusive Acts or Practices) authority in a similar manner with respect to companies and banks subject to its jurisdiction. A Federal District Court has invalidated the portion of the CFPB’s UDAAP Exam Manual provision upon which such authority was previously predicated and the case is now being considered by the Fifth Circuit.

Our focus during this podcast show is not on these Federal anti-discrimination statutes, but rather on the fact that an increasing number of states have either enacted or are considering enacting legislation requiring financial institutions to provide persons (both existing customers and prospective customers) who are not ordinarily protected by the federal anti-discrimination statutes with fair access to financial services. The first broad fair access requirements appeared in a Florida statute enacted in 2023, which generally prohibits financial institutions from denying or canceling services to a person or otherwise discriminating against a person in making available services on the basis of enumerated factors, commonly including factors such as political opinions, or any other factor that is not quantitative, impartial, and risk-based.

Because this topic is very controversial, I invited individuals who support and oppose these new types of state statutes: Brian Knight, Senior Research Fellow at Mercatus Center of George Mason University, Professor Peter Conti-Brown of the Wharton School of the University of Pennsylvania, and Peter Hardy who co-leads our Anti-Money Laundering (AML) team at Ballard Spahr. (Brain was previously a guest on our May 23, 2024 podcast which focused on the related topic of Operation Chokepoint.) Brian is generally supportive of these state fair access laws. Professor Conti-Brown and Peter Hardy generally oppose these types of laws.

We cover the following sub-topics, among others:

1.              Why were these laws enacted?

2.              What financial institutions are subject to these laws? Do they cover only depository institutions or do they also cover non-banks? Do they cover only consumer transactions or do they cover business transactions as well? Do they cover out-of-state financial institutions doing business with residents of the states that have enacted these statutes? Are there exemptions based on small size?

3.              Since banks are not public utilities, and have shareholders and employees to whom they owe duties, why should they be forced to do business with people or companies who generate fossil fuel or who manufacture or sell firearms, to take just two examples of industries protected by these statutes?

4.              What are the private and public remedies for violating these statutes?

5.              Does the National Bank Act, the Home Owners’ Loan Act and the Federal Credit Union Act preempt these state laws?

6.              Do these laws run afoul of AML laws as the Treasury suggests?

Brian believes that these state statutes don’t force any financial institution to do business with a particular person or company. The statutes simply say that you must give a good reason for a declination. A good reason would be one based on risk to the institution such as a lack of experience in evaluating the company’s business. Another good reason would be that the company is engaged in an unlawful business. A bad reason for a declination would be that the bank doesn’t like the political or cultural positions of the company.

Peter Conti-Brown believes that banks should be able to decide with whom they desire to do business as long as they don’t violate existing federal laws that prohibit discrimination, like ECOA and the FHA. Peter expresses skepticism that there was or is a need for these statutes. The “bottom line” is that the state statutes are bad public policy. Peter also believes that these state statutes are preempted by the National Bank Act.

Peter Hardy believes that these state statutes throw a monkey wrench into banks’ efforts to comply with AML requirements and the Bank Secrecy Act. He explains how these statutes could help bad actors evade the BSA.

We have previously blogged about these statutes.

Alan Kaplinsky, Senior Counsel and former chair for 25 years of the Consumer Financial Services Group, hosts the discussion.

Today’s podcast features the second part of a repurposed webinar produced on September 3, 2025, which dives into the legal risks, compliance challenges, and emerging constitutional questions stemming from the GENIUS Act. The conversation examines the strict prohibition of deceptive claims regarding federal backing or insurance for stablecoins, highlighting the significant civil liabilities and penalty provisions attached to violations.

Art Wilmarth delves deeply into areas such as federal preemption of state laws, consumer protections, and the power dynamics introduced by big tech and non-bank entities in the stablecoin market. Richard Rosenthal outlines the importance of building cross-functional teams, updating risk taxonomies, and adapting existing safety and soundness frameworks to the new environment presented by stablecoins. Peter Jaslow highlights legal risks for stablecoin issuers, such as the lack of explicit federal insurance, the reliance on monthly attestations of reserves, complex issues surrounding redemption policies, and significant civil and criminal penalties for non-compliance.

The speakers articulate the importance of rigorous compliance frameworks and the critical role finance teams will play in adapting to the new regulatory demands. Additionally, there is emphasis on the GENIUS Act’s consumer protection priorities and its alignment with administration policy objectives.

This episode also explores the business model impact of the GENIUS Act, discussing the growing demand for stablecoin and tokenized deposit solutions, and how institutions might leverage these technologies for treasury management and cross-border payments. Panelists provide perspectives on how innovation is being fostered, the implications for privately-held stablecoins, and the ways the GENIUS Act reflects the desires of the crypto industry. This session offers a holistic look at both the challenges and opportunities that financial institutions must consider as regulatory and market landscapes evolve.

Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

Today’s podcast features the first part of a recent webinar produced on September 3, 2025, which examined the key provisions of the GENIUS Act (“The Guiding and Establishing National Innovation for U.S. Stablecoins Act”) and its regulatory impact on banks, fintechs and the future of stablecoins. The discussion covers critical definitions, licensing, oversight and enforcement requirements, the relationship to state stablecoin laws. Panelists offer insights into the role of federal banking regulators such as the Comptroller of the Currency, the Federal Reserve, and the Financial Stability Oversight Council (“FSOC”), highlighting the Act’s efforts to establish a uniform regulatory framework and how financial institutions are responding to the new rules.

The webinar features three expert speakers: Art Wilmarth, Professor Emeritus at George Washington University Law School, Richard Rosenthal, Principal in Deloitte's Risk and Financial Advisory practice and Peter Jaslow, Practice Co-Leader of Ballard Spahr’s Blockchain Technology and Cryptocurrency group

Listeners will gain an understanding of how the GENIUS Act may reshape business stablecoin models.  The episode touches on compliance timelines, emphasizing the rapid pace of regulation, and previews issues of consumer protection and its ban on making interest payments. This dialogue sets the foundation for deeper analysis of legal risks and constitutional challenges, which will be explored in the upcoming second part of the series.

Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

Today’s episode of the Consumer Finance Monitor podcast is centered around a novel and thought-provoking article by David Horton, a professor of law at the University of California, Davis. The article, titled "Do Arbitrators Follow the Law? Evidence from Clause Construction," dives into the intriguing question of whether arbitrators render decisions that align with judicial rulings. Horton explores the longstanding debate on arbitration's adherence to legal standards, focusing on whether arbitrators have followed the Supreme Court’s 2019 decision in Lamps Plus, Inc. v. Varela (2019) that class-wide arbitration is not permitted when an arbitration clause is silent or ambiguous on the matter.  The podcast episode explores the ramifications of Horton's finding that in about 27% of the arbitrations studied, the arbitrators did not follow Lamps Plus.  Horton interprets that finding as suggesting that a significant minority of arbitrators may be motivated by financial considerations in allowing a class arbitration to proceed, notwithstanding Lamps Plus, because it is more lucrative for them than an individual arbitration.   

Mark Levin, Senior Counsel at Ballard Spahr, also joins the program. Mark interprets Horton’s findings differently, emphasizing that in his view Horton’s data strongly supports the conclusion that arbitration is not lawless since an overwhelming majority of the arbitrators (73%) did follow Lamps Plus.  Mark also dismisses Horton’s suggestion that some arbitrators’ rulings may be swayed by financial considerations as pure speculation.  On the contrary, he observes, the fact that some arbitrators have not strictly followed Lamps Plus does not show they were not following the law since the issue of clause construction has a lengthy complex history and prominent courts such as the Second Circuit have themselves found reasons for distinguishing Lamps Plus.   

Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

Today on our podcast, we’re releasing a repurposed recording of our July 23, 2025 webinar titled “Student Lending Legislation and Litigation: 2025 Mid-Year Review.”

The webinar features esteemed partners John Culhane and Tom Burke, who dive into the intricacies of student lending litigation and regulatory developments. As a senior partner in the Consumer Financial Services Group, John Culhane shares his extensive knowledge on higher education finance, focusing on state legislation and private student loan litigation. Tom Burke, also a partner in the same group, brings his expertise in private class actions and state enforcement actions, providing insights into the One Big Beautiful Bill Act and its significant impact on federal loan servicers and discussing federal student loan litigation.

Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

Today’s episode of the Consumer Finance Monitor podcast offers an in-depth analysis of the unitary executive theory and its implications for terminations by President Trump of the Democratic members/commissioners of several so-called independent Federal agencies.  The episode features Lev Menand, an associate professor of law at Columbia Law School, who provides expert insights into financial institutions and administrative law and the validity of the Trump terminations. Professor Menand discusses the theory that President Trump may exercise complete control over independent federal agencies (which includes such terminations), despite statutes which permit terminations only for cause and a 1935 Supreme Court opinion in Humphries Executor which upheld the constitutionality of the “for cause” limitation on such terminations.  Professor Menand also discusses (i) the stay orders issued by the Supreme Court which have frozen preliminary injunctions issued by lower courts in litigation initiated by the terminated individuals which required the reinstatement of Democratic members of two agencies who had been fired by Trump and (ii) the dictum in such stay orders saying that the reasoning behind the stay orders  does not apply to the members of the Federal Reserve Board.

This episode builds on another podcast released by Consumer Finance Monitor on July 10 featuring Patrick Sobkowski of Marquette University.

Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.