Skip to main content
Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Filter

Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • New York Requires New Premium Rates for Lender-Placed Insurance

    Lending

    On June 12, New York Governor Andrew Cuomo and the New York Department of Financial Services (DFS) announced that insurers offering lender-placed insurance must submit new premium rate schedules by July 6, 2012, along with justifications for those new rates. The DFS argues that new rates and justifications are needed based on information derived from recent hearings, which DFS Superintendent Lawsky believes proves that a lack of competition, unnecessarily high rates, and low loss ratios are harming borrowers in New York.

    Mortgage Insurance

  • Buckley Sandler Noted for Its Impressive Enforcement & Litigation Talent by Chambers USA

    Financial Crimes

    BuckleySandler LLP and eight of its partners have received top rankings in Chambers USA, which ranks leading firms and lawyers in a range of practice areas throughout the United States based on in-depth client and peer research.  This year, Chambers USA recognized BuckleySandler as “one of the preeminent legal brands in the consumer finance market,” and ranked it highly in both Financial Services Regulation: Banking (Enforcement & Investigations) and Financial Services Regulation: Consumer Finance (Compliance). Chambers USA provided individual attorney recognition to seven partners in one or more of these Financial Services categories, recognized Andrew L. Sandler as a “Star Individual” in Financial Services Regulation: Consumer Finance (Litigation), and recognized David S. Krakoff in District of Columbia Litigation: White-Collar Crime & Government Investigations.

    According to Chambers USA, BuckleySandler is noted for “its impressive enforcement and litigation talent, and represents some of the world's most high-profile financial institutions in a host of enforcement actions.” Chambers further highlights BuckleySandler’s regulatory work by saying “[the firm] was recently commissioned by a number of national banks to produce an exhaustive 50-state survey of all state and federal laws affecting lending businesses.”

    “We are pleased that Chambers USA has once again ranked our firm and so many of our partners. This recognition is all the more meaningful because Chambers’ research methodology focuses on peer and client review and thereby validates our commitment to outstanding legal work and client service,” said BuckleySandler Chairman and Executive Partner, Andrew L. Sandler.

    Partners Andrew L. Sandler, Jeremiah S. Buckley, Joseph M. Kolar, Benjamin B. Klubes, David S. Krakoff and Clinton R. Rockwell have once again been ranked individually in Chambers USA in 2012.

    Partners John P. Kromer and Jeffrey P. Naimon have also been ranked in Chambers USA in 2012, bringing the total of BuckleySandler Chambers ranked partners to eight.

    Specifically, their Chambers USA designations are as follows:

    Nationwide

    Financial Services Regulation: Banking (Enforcement & Investigations)

    • Firm Ranked Band 2
    • Andrew L. Sandler (Band 1)
    • Benjamin B. Klubes (Band 3)

    Financial Services Regulation: Consumer Finance (Compliance)

    • Firm Ranked Band 1
    • Jeremiah S. Buckley (Band 1)
    • Joseph M. Kolar (Band 1)
    • Andrew L. Sandler (Band 1)
    • John P. Kromer (Band 3)
    • Jeffrey P. Naimon (Band 3)
    • Clinton Rockwell (Band U – Up and Coming)

    District of Columbia

    Litigation: White-Collar Crime & Government Investigations

    • David S. Krakoff (Band 2)

    Jeremiah S. Buckley is ranked as Band 1 in Financial Services Regulation: Consumer Finance (Compliance). Chambers says Mr. Buckley “is another example of the firm's astonishing bench strength in the mortgage space. He is praised as "a reliable, quality counsel who is straightforward, candid and energetic."

    Benjamin B. Klubes is ranked as Band 3 in Financial Services Regulation: Banking (Enforcement & Investigations). Clients say Mr. Klubes is a "very talented litigation and enforcement expert” and "one of the real leaders in this space."

    Joseph M. Kolar is ranked as Band 1 in Financial Services Regulation: Consumer Finance (Compliance). Clients say that he “is singled out as one of the leading mortgage banking lawyers in the country, and noted for his strategic advice and encyclopedic knowledge of federal regulations. He assists mortgage lenders, servicers and insurers, and is ‘extraordinarily good at research and analysis.’"

    David S. Krakoff is ranked as Band 2 in DC Litigation: White-Collar Crime & Government Investigations. According to Chambers, “clients describe him as ‘a superb lawyer who is very dedicated.’”

    John P. Kromer is ranked as Band 3 in Financial Services Regulation: Consumer Finance (Compliance). Clients report that "he is a joy to work with," with one hailing him as "a true expert in the industry."

    Jeffrey P. Naimon is ranked as Band 3 in Financial Services Regulation: Consumer Finance (Compliance). Chambers quotes sources as saying Mr. Naimon is "certainly a thought leader" in the mortgage servicing space, with "his finger on the pulse of what is going on in the mortgage industry.”

    Clinton R. Rockwell is ranked as “Up and Coming” in Financial Services Regulation: Consumer Finance (Compliance). Sources are quoted as saying, "it is one thing to provide strict legal advice but it is another to provide practical solutions, and [Mr. Rockwell] does a great job of that."

    Andrew L. Sandler is ranked as a Band 1 lawyer in Financial Services Regulation: Consumer Finance (Compliance), as a Band 1 lawyer in Financial Services Regulation: Banking (Enforcement & Investigations), and as a “Star Individual” in Financial Services Regulation: Consumer Finance (Litigation). Chambers says that he “has consolidated his position as one of the leading financial services attorneys in the USA. His broad practice covers enforcement, litigation and compliance, with a focus on consumer finance and the mortgage industry. Sources consider him to be ‘probably the best fair lending lawyer in the country.’"

  • Lawmakers Ask CFPB to Examine Student Debit Cards

    Consumer Finance

    On June 7, Senator Richard Durbin (D-IL) and Representative George Miller (D-CA) sent letters to the CFPB and the Department of Education requesting that those agencies examine the practices associated with bank-affiliated student debit cards. The letters cite a recent U.S. PIRG report that identified “troubling practices” with these products, including alleged use of improper fees and misleading marketing. The lawmakers pose a series of questions to define the scope of the examination, including, for example (i) whether campus-based debit cards provide adequate consumer protections, (ii) whether the fees and penalties associated wit such cards violate federal law, and (iii) whether the contractual agreements between schools and financial institutions violate student privacy rights.

    CFPB Debit Cards

  • FTC Settles Privacy, Data Security Charges Based On Peer-to-Peer File Sharing Against Two Firms

    Fintech

    On June 7, the FTC announced two new cases (and simultaneous settlements), one against a debt collector and the other against an auto dealer, alleging privacy and data violations based on the use of peer-to-peer file sharing software. In both cases, the FTC claims that the firms allowed file-sharing software to be installed on company computers, thereby allowing files containing personal customer information to be accessed by any other person using a networked computer. Both companies, according to the FTC, (i) did not have adequate security plans, (ii) did not use reasonable measures to enforce compliance with existing security policies, (iii) did not adequately train employees, (iv) did not use reasonable methods to prevent, detect and investigate unauthorized access to personal information on its networks, and (v) failed to assess risk to consumers. For the debt collector, the FTC alleges that the failures constituted an unfair act or practice in violation of the FTC Act. The FTC claims that the auto dealer also violated the FTC Act and, for the first time, charges an auto dealer with violations of certain Gramm-Leach-Bliley (GLB) Act rules. The settlement orders with both companies bar misrepresentations regarding the privacy, security, confidentiality, and integrity of any personal information and require that the firms establish comprehensive information security programs that will be audited every other year for 20 years. The auto dealer also is barred from violating the GLB rules at issue.

    FTC Gramm-Leach-Bliley Privacy/Cyber Risk & Data Security

  • State AGs Granted Right to Intervene in Private MBS Action

    Securities

    On June 6, a New York state court ordered that the attorneys general for the states of Delaware and New York (state AGs) could intervene in a case challenging an $8.5 billion settlement related to allegations that the originator and servicer of certain mortgage backed securities breached obligations owed to the trusts. In re Application of The Bank of New York Mellon, No. 651786/11, slip op. (NY Sup. Ct. Jun 6, 2012). The trustee is seeking state confirmation that it had authority to enter into the settlement agreement and in so doing did not violate its duties under the trust agreements and state law. A group of institutional investors moved to challenge the settlement, and in a decision earlier this year the Second Circuit reversed a federal district court and held that the case fell within the securities exception to both original and appellate jurisdiction under the Class Action Fairness Act of 2005 and should proceed in state court. The federal district court also had granted a motion to intervene filed by the state AGs, holding that they could appropriately intervene to represent the interests of absent investors. The court reasoned that the state AGs had "parens patriae standing" to preserve an "honest marketplace." On remand in state court, the state AGs renewed their motions to intervene. In granting intervention, the state court rejected arguments made by the trustee and the institutional investors that the state AGs lack parens patriae standing, and that the state AGs are not seeking any injunctive relief to protect any quasi-sovereign interests. Instead, the court followed the prior federal court decision and held that the state AGs identified legitimate quasi-sovereign interests sufficient to provide standing to intervene.

    RMBS

  • CFPB Finalizes Multiple Rules Governing Enforcement Activities, Issues New Interim Rule

    Consumer Finance

    On June 6, the CFPB released final versions of three rules governing aspects of the CFPB’s enforcement activities and issued a new interim rule. The three rules set forth, respectively, the CFPB’s (i) authority and procedures for conducting investigations, (ii) practices for adjudication proceedings, and (iii) procedures through which state officials update the CFPB on state enforcement activities. While the rules have been in effect since July 2011 (in interim form), the final versions include some changes in response to public comments received. For example, the final investigations rule (i) specifies the CFPB staff members that have authority to initiate or close an investigation, (ii) adds to the CID process a conference between the parties within 10 calendar days of service, (iii) provides CID recipients a number of procedural options when additional time is needed to respond, and (iv) clarifies the rights of witnesses and which objections are appropriate for counsel to make during investigations. Additionally, the CFPB issued a new interim final rule to implement the Equal Access to Justice Act and will accept public comments for 60 days after publication in the Federal Register.

    CFPB Examination Dodd-Frank Nonbank Supervision

  • European Bank Resolution Proposal Released

    Federal Issues

    On June 6, the European Commission released a proposal to establish common rules for EU member country banking regulators to follow when faced with failing banks. The rules are meant to provide a more standard regulatory structure and approach to help reduce the impact of bank failures, improve market stability, and limit taxpayer risk. To achieve these goals, the Commission’s proposal would allow banks that do not pose a systemic risk to fail. Further, the proposal would shift the burden of restructuring costs for a systemically important troubled bank to its shareholders, creditors, and any employees responsible for mismanagement. Public authorities would be given new powers to (i) intervene earlier, (ii) establish in advance bank resolution plans, (iii) assume control of a failing bank if early intervention fails, and (iv) better coordinate cross-border issues raised by a failing bank. Banks, for their part, would be required to put in to place recovery plans and take certain actions if capital reserves fall below a set level, among other things. The proposals must first be considered and approved by the European Parliament and Council, and would take effect in 2018.

    Systemic Risk Bank Resolution

  • Federal Appeals Court Holds Good Faith Estimate Not a Contract

    Lending

    On May 31, the U.S. Court of Appeals for the Eleventh Circuit held that a Good Faith Estimate is not a contract but rather an estimate, and thus cannot support an action for breach of contract. Hackett v. Columbia Equities, Ltd., No. 1:10-cv-03530-AT, 2012 U.S.App. LEXIS 10949 (11th Cir. May 31, 2012). The court of appeals also dismissed a claim for “material alteration of a note” because the plaintiff failed to provide any statutory or common law rule that imposes civil liability on a party that materially alters a note. The pro se plaintiff asserted a variety of state and federal claims against three financial institutions related to a mortgage contract, all of which were dismissed by the district court for improper service, being time barred, or failing to state a claim upon which relief could be granted. The court of appeals affirmed the dismissal of all counts.

    Mortgage Origination GFE

  • Fourth Circuit Holds West Virginia Consumer Credit and Protection Act Statute of Limitations Begins to Run on Acceleration Date

    Consumer Finance

    On May 31, the U.S. Court of Appeals for the Fourth Circuit held that the one-year statute of limitations under the West Virginia Consumer Credit and Protection Act (WVCCPA) begins to run on the date the loan is accelerated, and not the date the loan is scheduled to mature. Delebreau v. Bayview Loan Servicing, LLC, No. 11-1139, 2012 WL 1949371 (4th Cir. May 31, 2012). At issue was whether the borrowers’ claim under the WVCCPA, alleging the servicer improperly added fees to their account, was time barred by the WVCCPA’s one-year statute of limitations, which runs from the “due date of the last scheduled payment of the agreement” of the parties. The servicer argued that “the due date of the last scheduled payment of the agreement” was the loan acceleration date declaring the entire loan amount due. The borrowers contended that it was the loan maturity date designated in the loan documents, which in this case was twenty-three years after the acceleration date. Affirming the district court’s judgment, the court held that the acceleration date was the operative date, reasoning that no further payments were scheduled after that date. Therefore, the borrowers’ claims were dismissed as time barred.

    Mortgage Servicing

  • CFPB, Prudential Regulators Release Supervisory Coordination Memorandum

    Consumer Finance

    On June 4, the CFPB and the federal banking prudential regulators – the Federal Reserve Board, the National Credit Union Administration, the Federal Deposit Insurance Corporation, and the Office of Comptroller of the Currency – jointly released a Memorandum of Understanding (MOU) meant to facilitate coordination of supervisory activities. The Dodd-Frank Act grants the CFPB exclusive authority to examine insured depository institutions and insured credit unions with more than $10 billion of total assets (and their affiliates) for compliance with federal consumer financial laws. The prudential regulators retained supervisory authority for all other applicable laws for such institutions, and all supervisory responsibilities for institutions with $10 billion or less in total assets. The Dodd-Frank Act also requires the CFPB and the prudential regulators to share supervisory information and work to minimize regulatory burden by coordinating examinations. The recent MOU seeks to implement those statutory requirements by establishing guidelines for simultaneous examinations and a framework for sharing certain supervisory information. The MOU also sets forth, among other things, a process by which covered institutions can request separate examinations.

    FDIC CFPB Examination Dodd-Frank Federal Reserve OCC NCUA

Pages

Upcoming Events