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Financial Services Law Insights and Observations


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  • State Attorneys General Seek to Intervene in PHH v. CFPB Case

    State Issues

    On January 23, the Attorneys General of 16 states and the District of Columbia (the State Attorneys General) filed a motion requesting the permission of the D.C. Circuit to intervene in the CFPB’s petition for en banc reconsideration in PHH Corp. v. CFPB.  In the motion, the State Attorneys General argue that they have a vital interest in the matter because the October 2016 panel decision subjecting the CFPB Director to “at will” removal by the President “threatens to undermine the ability of the State Attorneys General [to work with the CFPB] to bring effective civil enforcement and coordinated regulatory actions free from political influence and interference.”

    Noting the possibility that President Trump may seek to remove CFPB Director Cordray before the petition for rehearing is resolved or refuse to pursue an appeal to the Supreme Court if the panel decision stands, the State Attorneys General raise the concern that “[t]he incoming administration … may not continue an effective defense of the statutory for-cause protection of the CFPB director.”  Therefore, because “[a] significant probability exists that the pending petition for rehearing will be withdrawn, or the case otherwise rendered moot,” the State Attorneys General argue that the D.C. Circuit should allow them to intervene to protect their interests.

    In addition to the District of Columbia, the motion was filed on behalf of the Attorneys General for the following states: Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, and Washington.  The filing of the motion was announced by Connecticut Attorney General George Jepsen, whose office prepared the initial draft.

    State Issues Consumer Finance CFPB State Attorney General Trump President-Elect PHH v. CFPB Cordray Litigation Mortgages RESPA

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  • Rep. Wilson Introduces Bill to Delay Fiduciary Rule

    Federal Issues

    On January 6, Rep. Joe Wilson (R-S.C.) introduced the Protecting American Families’ Retirement Advice Act, a bill that would delay by two years the effective date of the Department of Labor’s “fiduciary rule.” As discussed previously on InfoBytes, the fiduciary rule—which is presently set to take effect in April 2017—expands the definition of “investment advisor” to include a “wider array of advice relationships,” thereby imparting new standards on financial advisors and brokers handling retirement accounts. In a statement, Rep. Wilson described the Fiduciary Rule as “one of the most costly, burdensome regulations to come from the Obama Administration.” Wilson’s proposed legislation seeks to delay the rule’s implementation in order to “giv[e] Congress and President-elect Donald Trump adequate time to re-evaluate.”

    Federal Issues Banking President-Elect Congress Fiduciary Rule Agency Rule-Making & Guidance

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  • Trump Announces CFPB Transition Team

    Federal Issues

    On January 5, 2016, the Trump Transition team announced the names of the four individuals assigned to lead the President-elect’s CFPB “Landing Team.” Generally, each landing team is tasked with collect information on each agency—ranging from the agency's budget and policies to the status of various rulemakings and the current administration's priorities—all with the overarching purpose of facilitating an orderly transfer of power at the federal financial regulators. The CFPB Landing Team includes:

    • Paul Atkins, former GOP Commissioner for the SEC and current CEO of Patomak Global Partners LLC, which provides consulting services concerning financial services industry matters, regulatory compliance, risk and crisis management, public affairs, independent reviews, litigation support, and strategy.
    • Kyle Hauptman, Senior Development Manager and occasional writer about financial & political issues for the American Enterprise Institute (AEI), member of the SEC’s Advisory Committee on Small and Emerging Companies, and former chief economic adviser on the issues of Financial Markets, Housing to the Romney For President (RFP) campaign.
    • Consuala “CJ” Jordan, a public relations executive and Republican political consultant who is currently CEO of The Jordan Management Group, LLC, a full service Government Relations and Public Affairs Firm, specializing in strategic business development.
    • Julie B. Lindsay, Managing Director and General Counsel of Capital Markets and Corporate Reporting at Citigroup Inc., and former Counsel to Commissioner Glassman at the SEC.


    Federal Issues Consumer Finance CFPB SEC President-Elect Agency Rule-Making & Guidance

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  • FTC Chief Ramirez Announces Resignation

    Federal Issues

    On January 13, the FTC announced that Chairwoman Edith Ramirez will be stepping down effective February 10. Chairwoman Ramirez was appointed by President Barack Obama and has served as a commissioner since April 2010. She became chairwoman in March 2013, after former FTC Chairman Jon Leibowitz resigned. Her departure means that President-elect Donald Trump will have the chance to fill three vacancies at the agency.

    Federal Issues FTC President-Elect Agency Rule-Making & Guidance Trump Obama

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  • House Democrats Defend CFPB Director in Response to GOP Letter Demanding His Dismissal

    Federal Issues

    On January 10, Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, and 20 Democratic panel members sent a letter to President-elect Donald Trump urging him to reject calls by Republicans to fire CFPB Director Richard Cordray. Among other things, the letter argues against “entering into a protracted – and likely unsuccessful – legal battle to oust” Director Cordray before his term expires in July 2018. Specifically, the letter “caution[s]” the President-Elect “not to engage in partisan litigation, particularly since it is likely to be unsuccessful and will needlessly divert government resources away from other important priorities.” The lawmakers contend further that removing the CFPB Director "for cause” would be an "extraordinary remedy” that is “without historical precedent,” and which “must be subjected to enhanced congressional, judicial, and public scrutiny.”

    As previously covered by InfoBytes, a majority of a panel of U.S. Circuit Court for District of Columbia concluded in October 2016 that the CFPB’s governance structure was unconstitutional, and, as a corrective measure, authorized the President to fire the Bureau’s sole Director at will—a ruling for which the Bureau now seeks rehearing en banc.

    Federal Issues Consumer Finance CFPB President-Elect Cordray Single-Director Structure

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  • Two GOP Senators Urge Incoming Administration to Remove Director Cordray

    Federal Issues

    On January 9, two GOP lawmakers sent a letter to Vice President-elect Mike Pence urging the incoming administration to remove CFPB Director Richard Cordray “promptly after [President Trump’s] inauguration.” Stating that “[i]t’s time to fire King Richard,” Sen. Ben Sasse, a member of the Senate Banking Committee, and Sen. Mike Lee cited the D.C. Circuit’s October 2016 decision in CFPB v. PHH to argue that, once in office, President Trump has the constitutional authority to remove Director Cordray immediately. In pushing for Director Cordray’s ouster, the Senators noted, among other things, the CFPB’s decision to move ahead in the lame-duck session with regulations of arbitration clauses and payday loans, which they consider costly and “radically opposed to the Trump administration’s pro-growth agenda.”

    As previously covered by InfoBytes, a majority of a panel of U.S. Circuit Court for District of Columbia concluded in October 2016 that the CFPB’s governance structure was unconstitutional, and, as a corrective measure, authorized the President to fire the Bureau’s sole Director at will—a ruling for which the Bureau now seeks rehearing en banc. In addressing this pending appeal, the Senators’ January 9 letter suggests in a footnote that, if the rehearing moves forward, the Justice Department should refrain from defending the CFPB.

    Federal Issues Consumer Finance CFPB President-Elect PHH v. CFPB Cordray RESPA Mortgages Litigation Single-Director Structure

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  • OFAC Amends Executive Order Regarding Significant Malicious Cyber-Enabled Activities to Include Interfering With or Undermining Election Processes

    Consumer Finance

    On December 28, 2016, the President announced the issuance of an Executive Order Taking Additional Steps To Address The National Emergency With Respect To Significant Malicious Cyber-Enabled Activities thereby amending Executive Order 13694. Among other things, the new Executive Order allows for the imposition of sanctions on individuals and entities determined to be responsible for tampering, altering, or causing the misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions. Five entities and six individuals have been identified and will be added to OFAC’s SDN List, the latest version of which can be accessed here.

    Banking International Sanctions OFAC Miscellany President-Elect

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  • Trump Names Ben Carson to HUD Post

    Federal Issues

    In a press release issued December 5, President-Elect Trump named retired pediatric neurosurgeon Ben Carson as Secretary of Housing and Urban Development. Carson was a 2016 Republican presidential candidate. Raised in poverty in inner-city Detroit, he was head of pediatric neurosurgery at Johns Hopkins Hospital in Baltimore for nearly three decades, rising to national fame in 1987 when he led the first successful separation of twins conjoined at the head.

    Federal Issues Mortgages HUD President-Elect

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  • Trump Nominates Jeff Sessions to be Next Attorney General

    Federal Issues

    On November 18, President-elect Donald Trump announced that he has chosen Sen. Jefferson Sessions (R-Ala.), to become the next U.S. Attorney General. Sessions served as the U.S. Attorney for the Southern District of Alabama for 12 years and was the state's attorney general for two years. Trump also announced his intent to nominate U.S. Rep. Mike Pompeo (R-Kan.) as Director of the CIA and Lt. Gen. Michael Flynn as Assistant to the President for National Security Affairs.

    Federal Issues Criminal Enforcement DOJ Enforcement Trump President-Elect

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