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Division of Corporation Finance Director Keith Higgins to Leave SEC; Shelley Parratt to Become Acting Director
In a December 6 press release, the SEC announced that Keith F. Higgins, Director of the SEC’s Division of Corporation Finance, plans to leave the SEC in early January. Since joining the SEC in 2013, Mr. Higgins led the Division’s implementation of significant rulemaking and other responsibilities under the Dodd-Frank Act, Jumpstart Our Business Startups Act (JOBS Act), and Fixing America’s Surface Transportation Act (FAST Act). Upon Mr. Higgins’ departure, Shelley Parratt, Deputy Director for the Division of Corporation Finance, will become the acting Director. Ms. Parratt has served previously as acting Director. Ms. Parratt has served as Deputy Director of the Division since 2003, and has been responsible for assisting in strategic planning and developing Division policies and procedures and overseeing the disclosure review program. Ms. Parratt came to the SEC’s Division of Corporation Finance in 1986. She received her M.B.A. from Syracuse University and her B.A. from St. Lawrence University.
In a letter sent to CFPB Director Richard Cordray on December 1, a group of Republican members of Congress expressed concern about the Bureau’s proposal regarding payday, vehicle title, and certain high-cost installment loans. The letter observes that CFPB’s proposal “attempts to further regulate an industry that is already highly regulated by nearly a dozen federal laws including the Truth in Lending Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, and the Electronic Fund Transfer Act.” Specifically, the letter contends that the CFPB’s framework will effectively preempt existing statutory and regulatory frameworks and/or eliminate regulated small dollar credit products from the market, thereby leaving consumers without access to credit or forcing them to seek “riskier, illegal” forms of credit.
On December 2, Fed Governor Lael Brainard announced, at the Conference on Financial Innovation in Washington DC, that the Fed has formed a Fintech working group. The move comes as the OCC takes steps toward launching a fintech bank charter. According to Ms. Brainard, the group will incorporate personnel with a broad array of expertise and will be tasked with “facilitat[ing] innovation where it has the potential to yield broad social benefit, while ensuring that risks are thoroughly managed.” While Ms. Brainard highlighted several benefits from the growth of Fintech, the Fed Governor also raised certain concerns innovations relying on data sharing could create security, privacy, and data-ownership risks, despite increased convenience to consumers. Specifically, Ms. Brainard explained, the Fed must “be attentive to the potential social benefits of these new technologies, prepared to make the necessary regulatory adjustments if their safety and integrity are proven and . . . vigilant to ensure risks are well understood and managed.”
A change to Rule 41(b) of the Federal Rules of Criminal Procedure took effect on December 1. Amended Rule 41(b) now allows courts to issue warrants for remote access to electronic data outside their jurisdiction if the location of the information has been “concealed through technological means” or when the data is in five or more districts. Thus, under the revised rule, a magistrate judge has the authority to issue a warrant outside of their district without specific knowledge of the location of the computers being searched. By contrast, warrant requests were previously limited to the search and seizure of property within the court’s own district.
Just weeks after announcing that it set aside approximately $520 million for a potential settlement of FCPA matters being investigated by the SEC and DOJ, Reuters reports that a spokeswoman for an Israeli pharmaceutical company has confirmed that they are investigating new potential bribes to state healthcare workers in Romania. Reuters claims to have reviewed emails sent in the past year by an anonymous tipster to the company’s CEO and audit committee that detail bribes paid to healthcare providers in exchange for recommending the company’s drugs. Romania was not among the countries the company identified as being part of the settlement discussions with the SEC and DOJ in its recent SEC filing, although the company has said it is conducting a worldwide investigation of its business practices.
Prior Scorecard coverage of the company’s investigation can be found here.
On December 7, a former president of a Nicaraguan soccer federation, pleaded guilty to racketeering conspiracy and wire fraud conspiracy charges. The guilty plea came in response to allegations that the former president accepted approximately $150,000 in bribes for helping an American company acquire media rights to FIFA events. As part of the plea, the former president agreed to forfeit almost $300,000 and could be sentenced to a maximum of 20 years for each count. Last month, the former president of the American company also pleaded guilty to racketeering and wire fraud conspiracy charges alleging that the former president arranged bribe payments totaling more than $14 million dollars in exchange for media and marketing rights to international soccer tournaments and matches.
The former president was indicted by the DOJ in May 2015 along with 13 other FIFA officials. The former president was the final official to be extradited to the United States. The sprawling investigation has resulted in multiple other guilty pleas from former FIFA officials. Prior Scorecard coverage on the FIFA investigations can be found here.
On December 2, the OCC announced that it would move forward with considering applications from financial technology (Fintech) companies to become special-purpose national banks. In prepared remarks delivered at the Georgetown University Law Center, Comptroller of the Currency Thomas Curry explained, among other things, that “having a clear process, criteria, and standards for Fintechs to become national banks ensures regulators and companies openly vet risks and that the institutions that receive charters have a reasonable chance of success.”
Accompanying his decision, the OCC published a paper discussing the issues and conditions that the agency will consider in granting special purpose national bank charters. According to the paper, in order to apply for a special-purpose charter, a company must engage in fiduciary activities, or one of the three core banking functions: lending money, paying checks or receiving deposits. The paper is available on the agency’s website at www.occ.gov and comments may be submitted through January 15, 2017.
FCC Denies Petition by MBA to Exempt Certain Mortgage Servicing Calls from Prior Express Consent Requirement
In an order dated November 15, the FCC’s Consumer and Governmental Affairs Bureau denied a petition by the Mortgage Bankers Association (MBA) that sought an exemption from the FCC’s prior express consent requirement for non-telemarketing residential mortgage servicing auto-dialer calls to wireless numbers. In its order, the Bureau concluded that MBA had failed to show (1) that the calls in question would be free of charge to consumers; and (2) that the parties seeking relief should be able to send non-time-sensitive calls to consumers without their consent.
Among other things, the Order explained that the Telephone Consumer Protection Act (TCPA) “reflects Congress’ recognition of the potential costs and privacy risks imposed on wireless consumers from the use of auto-dialer equipment, which can generate large numbers of unwanted calls” and accordingly, the FCC has generally attempted to balance and accommodate the legitimate business interests of callers in addition to recognized consumer privacy interests.
In a November 28 advisory bulletin entitled Detecting and Preventing Consumer Harm from Production Incentives, the CFPB highlights examples from its supervisory and enforcement experience in which incentives contributed to substantial consumer harm. The bulletin also describes compliance management steps that supervised entities should take to mitigate risks posed by incentives. Among other things, the CFPB clarifies that it is not outlawing sales incentives or other similar programs, but rather is cautioning companies that such programs can lead to abuse. As explained in the bulletin, “[t]ying bonuses or employment status to unrealistic sales goals or to the terms of transactions may intentionally or unintentionally encourage illegal practices such as unauthorized account openings, unauthorized opt-ins to overdraft services, deceptive sales tactics, and steering consumers into less favorable products.”
Last week, on November 23, the FHFA announced that it will raise the maximum conforming loan limits for mortgages purchased by Fannie Mae and Freddie Mac in 2017 from $417,000 to $424,000. The announcement marks the first time FHFA has increased the baseline loan limit since 2006. In high-cost areas, such as Los Angeles, New York, San Francisco, and Washington, D.C., the maximum loan limit will be $636,150. Meanwhile, limits rose in all but 87 counties in the country. View the list of counties seeing increases here.
- Andrew W. Schilling to moderate "Expectations of in-house counsel from their law firm partners" at the ACI's 7th Annual Advanced Forum on False Claims and Qui Tam
- Buckley Webcast: Tips for navigating changes to the FHA recertification process
- Daniel P. Stipano to discuss "A 20/20 view on 2020’s legislative and regulatory outlook" at the ACAMS Anti-Financial Crime and Public Policy Conference
- Kari K. Hall and Michelle L. Rogers to discuss "Overdrafts and regulatory trends" at the CLE Alabama Banking Law Update
- Kathryn L. Ryan to discuss "Industry open forum session on NMLS usage" at the NMLS Annual Conference & Training
- Kathryn L. Ryan to discuss "Regulating innovative consumer lending products" at the NMLS Annual Conference & Training
- Daniel P. Stipano to moderate "Washington update" at the 17th Puerto Rican Symposium of Anti Money Laundering 2020 conference
- APPROVED Checkpoint Webcast: CFL overview
- Daniel P. Stipano to discuss "Pathway of the SARs: Tracking trajectories of suspicious activity reports from alerts to prosecution" at the ACAMS moneylaundering.com 25th Annual International AML & Financial Crime Conference
- Daniel P. Stipano to discuss "Which bud’s for you? A deep-dive into evolving marijuana laws" at the ACAMS moneylaundering.com 25th Annual International AML & Financial Crime Conference