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Banking
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August 15, 2024
SEC Defendants Fight Ex-Latham Atty For Whistleblower Docs
A credit reporting agency at the center of a $73 million U.S. Securities and Exchange Commission lawsuit is seeking to force a retired Latham & Watkins LLP partner to hand over his discussions with a pair of SEC whistleblowers, arguing that the attorney's work for the tipsters isn't privileged.
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August 15, 2024
Startup's Cannabis Payment Deal Dispute Can Move Ahead
An Illinois federal judge has preserved the bulk of a now-defunct cannabis payment startup's suit alleging Fidelity National Information Services drove it out of business by backing out of a partnership deal, saying that while there wasn't an enforceable contract, the startup sufficiently pled that FIS was misleading in its promises.
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August 15, 2024
Banking Groups Sue To Thwart New Ill. Swipe Fee Restrictions
The nation's largest bank trade association and other industry groups sued Thursday to block Illinois from implementing a new state law that prohibits financial intermediaries from charging so-called swipe fees on the sales tax and tip portions of payment card transactions, arguing it conflicts with federal law and risks broader "chaos."
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August 15, 2024
Ga. Man Accused Of Trying To Steal $1.9M In COVID Funds
A Georgia man was indicted in a scheme to steal $1.9 million in pandemic relief money and accused of wire fraud, submitting fraudulent federal tax returns and stealing dozens of Social Security numbers, the U.S. Department of Justice announced Wednesday.
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August 14, 2024
SEC, CFTC To Collect $474M In Latest Texting Probe Fines
The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission on Wednesday announced settlements totaling nearly $474 million with several broker-dealers, investment advisers and other registered firms over failures to maintain and preserve text messages and other electronic communications as required under federal law.
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August 14, 2024
CFPB Faces Call To Treat Housing Rental Leases As 'Credit'
A major consumer advocacy group has formally petitioned the Consumer Financial Protection Bureau to write new rules that would require landlords to provide "adverse action" explanations when rejecting prospective renters who have applied for an apartment or other housing lease.
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August 14, 2024
New York Sues Lease-To-Own Fintech For 'Cheating' Users
New York state sued lease-to-own fintech company Acima on Wednesday, accusing the firm of taking advantage of consumers with deceptive practices around its lease agreements and interest rates that go far beyond the state's standard for usury.
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August 14, 2024
FINRA Fines Morgan Stanley $400K Over Transaction Records
A Morgan Stanley wealth management unit will pay the Financial Industry Regulatory Authority $400,000 to settle claims it left required information off of approximately 550,000 trade confirmations for certain municipal securities.
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August 14, 2024
4th Circ. Says Credit Card 'Offset' Ban Applies To HELOCs
Creditors are prohibited from withdrawing funds from a cardholder's deposit account to cover outstanding payments on a home equity line of credit without the borrower's consent, a divided Fourth Circuit panel ruled Wednesday.
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August 14, 2024
CFPB Probe Draws Bead On Sporting Goods BNPL Firm
Credova, a fintech firm that specializes in buy-now, pay-later loans and other financing options for firearms and outdoor recreational goods purchases, is facing scrutiny from the Consumer Financial Protection Bureau and a potential enforcement action, its parent company said Wednesday.
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August 14, 2024
Treasury Says $82M Will Boost Tribal Small Business Growth
An investment by the U.S. Treasury in a consortium of Alaskan tribes is expected to infuse as much as $830 million in additional private sector investments throughout the state and in Indigenous-owned companies as part of the most expansive backing of small-business financing for tribal governments in history.
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August 14, 2024
Del. Justices Affirm $266M Atty Fee Award In Dell Class Suit
Delaware's Supreme Court on Wednesday backed a Chancery Court decision awarding an almost record-breaking $266.7 million fee for stockholder attorneys who settled a class action against Dell Technologies Inc. for $1 billion, saying the Chancery "did not exceed its discretion in setting the fee percentage."
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August 14, 2024
Ukrainian Bank In $1.1B Russia Case Points To Nigeria Ruling
A Ukrainian bank looking to enforce a $1.1 billion arbitral award against Russia has asked a Washington, D.C., federal judge to consider a decision issued last week by the D.C. Circuit rejecting Nigeria's sovereign immunity defense in another litigation over an arbitral award.
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August 14, 2024
Philly Art School Hit With Students' Suit Over Abrupt Closure
Two former students at the University of the Arts claimed the school's sudden shutdown in June was without proper heads-up or guidance, according to a potential class action in Pennsylvania federal court.
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August 14, 2024
Ex-Allied Wallet Execs Plead Guilty In $150M Fraud Scheme
Two former executives of payment processing company Allied Wallet have admitted to their roles in a $150 million bank fraud conspiracy that tricked financial institutions into allowing otherwise restricted merchants to access the card payment networks of Visa, Mastercard, American Express and Discover.
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August 14, 2024
SC Justices Agree To Hear Murdaugh's Jury Tampering Claim
South Carolina's Supreme Court has agreed to hear disgraced lawyer Alex Murdaugh's appeal claiming a clerk of court tampered with the jury that convicted him of murder, invoking a rule that bypasses intermediate appeals when "significant public interest or a legal principle of major importance" hangs in the balance.
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August 14, 2024
Feds Nab US-Iran Citizen On Aircraft Parts Charges
A dual U.S.-Iranian citizen was charged in D.C. federal court with procuring American aircraft parts and attempting to send them to Iran in violation of U.S. sanctions, the U.S. Department of Justice said Wednesday.
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August 14, 2024
Rapper Gets Probation In Stolen Payment Card Scheme
A Chicago-area rap artist was sentenced to probation for his role in a nationwide wire fraud conspiracy that used payment card information stolen from the dark web to make purchases, including private jet flights and hotel stays.
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August 13, 2024
2nd Circ. Partially Revives Retirees' JPMorgan Benefits Suit
The Second Circuit on Tuesday partially resurrected a retired JPMorgan Chase employee's putative class action claiming it failed to properly notify and inform workers after the retirement plan was converted to a cash balance plan, ruling that JPMorgan had properly notified retirees as to only some aspects of the change.
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August 13, 2024
TMX Affiliate Sues Pa. Regulator To Block Potential $52M Fine
A Texas and Georgia-based affiliate of consumer lending company TMX Finance has sued the secretary of the Pennsylvania Department of Banking and Securities, challenging an order from the department that the company says seeks over $52 million in civil penalties over claims tied to loan agreements that allegedly carry interest rates as high as 720%.
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August 13, 2024
Chamber Defends Texas Home For CFPB Late-Fee Rule Suit
The U.S. Chamber of Commerce and other trade associations battling the Consumer Financial Protection Bureau's $8 credit card late-fee rule told a Texas federal judge on Monday that the agency's latest bid to send the case to Washington, D.C., risks creating new rule challenge obstacles for local-level business groups and should be rejected.
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August 13, 2024
CFPB Says Predatory Lenders Targeting Muslim Homebuyers
The Consumer Financial Protection Bureau said Tuesday it found that an often predatory form of home financing, known as contracts for deed, has become increasingly prevalent in Muslim communities.
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August 13, 2024
FDIC Looks To Dodge Suit Over First Republic Bank's Rent
The Federal Deposit Insurance Corp. urged a California federal court to toss a suit filed by a California landlord that once leased to First Republic Bank, arguing that federal law bars the suit because the FDIC is the bank's receiver.
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August 13, 2024
Tesla Stock Buy Fraud Nets 33-Mo. Sentence For Calif. Man
A California man accused of bilking investors out of $4.7 million by falsely representing he'd use the money to buy Tesla stock before diverting it to his wholesale food distribution business was sentenced to 33 months in prison in California federal court Monday, according to the U.S. Attorney's Office for the Northern District of California.
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August 13, 2024
'Delusional' Ex-Atty Gets 25 Years For Bank Embezzlement
An Illinois federal judge blasted a former attorney and real estate developer Tuesday as she handed him 25 years in prison for misappropriating a bank's embezzled money, saying he was "delusional" to assert he's a victim in the case.
Expert Analysis
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A Checklist For Lenders Preparing For CRE Loan Defaults
Considering the recent interest rate environment, lenders should brush up on the proper steps that they should take when preparing to respond to a borrower's default on a commercial real estate loan, and borrowers should understand what lenders will be reviewing, says attorney Norma Williams.
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Opinion
Discount Window Reform Needed To Curb Modern Bank Runs
We learned during the spring 2023 failures that bank runs can happen extraordinarily fast in light of modern technology, especially when banks have a greater concentration of large deposits, demonstrating that the antiquated but effective discount window needs to be overhauled before the next crisis, says Cris Cicala at Stinson.
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Mitigating Risks Amid 10-Year Sanctions Enforcement Window
In response to recent legislation, which doubles the statute of limitations for actions related to certain U.S. sanctions and provides regulators greater opportunity to investigate possible violations, companies should take specific steps to account for the increased civil and criminal enforcement risk, say attorneys at Freshfields.
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Series
In The CFPB Playbook: Making Good On Bold Promises
The U.S. Supreme Court's decision upholding the Consumer Financial Protection Bureau's funding structure in the second quarter cleared the way for the bureau to resume a number of high-priority initiatives, and it appears poised to charge ahead in working toward its aggressive preelection agenda, say Andrew Arculin and Paula Vigo Marqués at Blank Rome.
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Series
After Chevron: Creating New Hurdles For ESG Rulemaking
The U.S. Supreme Court's Loper Bright decision, limiting court deference to agencies' statutory interpretations, could have significant impacts on the future of ESG regulation, creating new hurdles for agency rulemaking around these emerging issues, and calling into question current administrative actions, says Leah Malone at Simpson Thacher.
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A Timeline Of Antisemitism Legislation And What It Means
What began as hearings in the House of Representatives Committee on Education and the Workforce has expanded to a House-wide effort to combat antisemitism and related issues, with wide-ranging implications for education, finance and nonprofit entities, say attorneys at Morgan Lewis.
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Opinion
States Should Loosen Law Firm Ownership Restrictions
Despite growing buzz, normalized nonlawyer ownership of law firms is a distant prospect, so the legal community should focus first on liberalizing state restrictions on attorney and firm purchases of practices, which would bolster succession planning and improve access to justice, says Michael Di Gennaro at The Law Practice Exchange.
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State Licensing Pitfalls Mortgage Servicers Must Beware
A recent enforcement action from the Washington Department of Financial Institutions demonstrates how subtle distinctions in state mortgage servicer licensing laws may come as a surprise to some companies, even if they never directly receive payments or interact with borrowers, says Clayton Swears at Hudson Cook.
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Best Text Practices In Light Of Terraform's $4.5B Fraud Deal
Text messages were extremely important in a recent civil trial against Terraform Labs, leading to a $4.5 billion settlement, so litigants in securities fraud cases need to have robust mobile data policies that address the content and retention of messages, and the obligations of employees to allow for collection, say Josh Sohn and Alicia Clausen at Crowell & Moring.
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Series
Solving Puzzles Makes Me A Better Lawyer
Tackling daily puzzles — like Wordle, KenKen and Connections — has bolstered my intellectual property litigation practice by helping me to exercise different mental skills, acknowledge minor but important details, and build and reinforce good habits, says Roy Wepner at Kaplan Breyer.
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CFPB's New Registration Rule Will Intensify Nonbank Scrutiny
The Consumer Financial Protection Bureau's recently finalized nonbank registration rule aimed at cracking down on repeat offenders poses significant compliance challenges and enforcement risks for nonbank financial firms, and may be particularly onerous for smaller firms, say Ketan Bhirud and Emily Yu at Cozen O'Connor.
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Texas Ethics Opinion Flags Hazards Of Unauthorized Practice
The Texas Professional Ethics Committee's recently issued proposed opinion finding that in-house counsel providing legal services to the company's clients constitutes the unauthorized practice of law is a valuable clarification given that a UPL violation — a misdemeanor in most states — carries high stakes, say Hilary Gerzhoy and Julienne Pasichow at HWG.
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Navigating The New Rise Of Greenwashing Litigation
As greenwashing lawsuits continue to gain momentum with a shift in focus to carbon-neutrality claims, businesses must exercise caution and ensure transparency in their environmental marketing practices, taking cues from recent legal challenges in the airline industry, say attorneys at Baker McKenzie.
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In Memoriam: The Modern Administrative State
On June 28, the modern administrative state, where courts deferred to agency interpretations of ambiguous statutes, died when the U.S. Supreme Court overruled its previous decision in Chevron v. Natural Resources Defense Council — but it is survived by many cases decided under the Chevron framework, say Joseph Schaeffer and Jessica Deyoe at Babst Calland.
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Preparing For CFPB 'Junk Fee' Push Into Mortgage Industry
As the Consumer Financial Protection Bureau considers expanding its "junk fee" initiative into mortgage closing costs, mortgage lenders and third parties must develop plans now that anticipate potential rulemaking or enforcement activity in this space, say attorneys at Morgan Lewis.