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CFPB Enforcement Authority: What the Future May Hold
   LIVE Webcast  


Event Details:                                                                                                                                                          

The CFPB recently marked its one year anniversary (July 21, 2012), but it has yet to flex its enforcement muscle. This is an opportune time to analyze the CFPB’s enforcement authority and how it may be used. Such an analysis is all the more appropriate because there is considerable uncertainty regarding just what the scope of that authority will be. In particular, there is uncertainty regarding the entities that the CFPB will regulate as well as the conduct that it will target.

Title 10 of the Dodd-Frank Act, known as the Consumer Financial Protection Act (“CFPA”), grants the CFPB authority of varying degrees over three broad classes of entities: (1) depository institutions with $10 billion or more in assets; (2) depository institutions with less than $10 billion in assets; and (3) certain nondepository institutions (“non-depository covered persons”). The allocation of authority between the CFPB and other federal agencies with respect to these three categories of institutions is less than clear cut. The CFPA gives the CFPB rulemaking authority over all of these entities, but allocates examination and enforcement authority very differently. The CFPB will have exclusive examination authority only over large depository institutions (the first of the three categories). Other banking agencies will retain their examination authority over smaller institutions. As to enforcement authority, the CFPB will have to coordinate, and potentially compete, with other federal agencies. While the CFPA gives the CFPB “primary” enforcement authority over large depository institutions and certain non-depository institutions, other agencies may exercise enforcement authority as well, if they recommend an enforcement action to the CFPB and the CFPB fails to proceed. Moreover, the precise contours of these three categories of entities are still being defined.

There is also uncertainty about the scope of conduct the CFPB is authorized to target. The CFPA authorizes the CFPB to define and prohibit “unfair, deceptive or abusive acts or practices in connection with” consumer financial products or services. CFPA § 1031(b), 12 U.S.C. § 5531(b). This language is noticeably broader than the powers granted to the Federal Trade Commission, which is authorized to define and prohibit “unfair or deceptive acts or practices in or affecting commerce.” 15 U.S.C. § 45(a). The authority given to the CFPB incorporates a new component of impropriety, namely, acts or practices that are “abusive,” and what precisely these are has yet to be determined. Moreover, the broader authority granted to the CFPB does not displace the narrower authority already granted to the FTC. Under the CFPA, the FTC retains the authority it has always had to target “unfair or deceptive” acts or practices. Thus, financial services companies subject to the CFPB’s and FTC’s enforcement powers will have to adhere to two standards of conduct simultaneously — the FTC’s “unfair or deceptive” standard and the CFPB’s new “unfair, deceptive or abusive” standard that has yet to be defined.

Course Level: Intermediate
Prerequisite: None
Method Of Presentation: Group-Based-Internet
Developer: The Knowledge Group, LLC
Recommended CLE/CPE Hours: 1.75 - 2.0
Advance Preparation: Print and review course materials
Course Code: 124367
NASBA Field of Study: Specialized Knw and Apps - 2.00 credit hours
Recording Fee: $299 (Please click here for details)


Featured Speakers for CFPB Enforcement Authority: What the Future May Hold LIVE Webcast :

Agenda  (click here to view more)

Stephen A. Fogdall, Partner,
Schnader Harrison Segal & Lewis LLP

Title X of Dodd-Frank contains a new prohibition against “unfair, deceptive or abusive acts or practices” (UDAAPs). The CFPB has yet to promulgate regulations to define such acts or practices, yet it appears to believe that it may bring actions to enforce this prohibition regardless. Is this correct? How can financial institutions defend such actions when the CFPB has not even defined what a UDAAP is?

Title X of Dodd-Frank distinguishes between actions arising solely under an enumerated consumer financial law and actions arising under “this title,” i.e., Title X itself. What does this distinction mean? When does an action arise under “this title,” and when does it arise solely under an enumerated consumer financial law? Does an action arise under “this title” when it alleges a UDAAP violation? Or does an action arise under “this title” whenever the defendant is a “covered person” as defined in the statute?

Title X empowers the CFPB to seek a wide range of remedies not available under other consumer financial laws. Are these remedies only available to the CFPB when it brings an action under “this title” (Title X), or are they available even when the CFPB brings an action arising solely under an enumerated consumer financial law?

Title X seems to exempt certain categories of individuals or entities from the CFPB’s authority — for example, individuals engaged in the practice of law, or entities engaged in the business of insurance — but, almost in the same breath, seems to take away this exemption “to the extent” such individuals or entities are otherwise subject to consumer financial laws. How can these seemingly conflicting provisions be reconciled?

Title X permits the CFPB to define by regulation certain categories of “nondepository covered persons,” which, once defined, will be subject to its supervisory authority. However, the CFPB contends that it need not promulgate such regulations in order for these entities to be subject to its enforcement authority. Can this position be squared with the statutory text?

Brent Lindahl , Partner,
Fulbright & Jaworski LLP

  • - The Bureau’s jurisdictional reach and how that may differ depending on whether the Bureau is acting in a supervisory, regulatory, or enforcement capacity.
  • - The Bureau’s position that it has the right to obtain privileged information under its supervisory authority and the potential consequences of turning over privileged information to the Bureau.
  • - The Bureau’s sharing of information with other regulators, such as state Attorneys General.

Maureen Day, Partner,
Ernst & Young

During the third quarter of 2012, Federal regulators[1], including the Consumer Financial Protection Bureau (CFPB), issued multiple Consent Orders to several of the top five credit card issuers. Each had significant financial repercussions, which included fees to be remediated to customers and civil money penalties. Customer remediation ranged from $91 million to $200 million and civil money penalties ranged from $14 million to $60 million. It appears that the agency is using its enforcement authority to also articulate its views on how financial institutions should comply with enumerated consumer protection laws.

Each consent order noted a lack of sufficient vendor compliance oversight. Although specific regulations related to vendor compliance oversight have not been issued, the regulatory agencies have previously provided formal guidance on the matter as industry utilization and reliance on vendor service providers has increased. The message delivered by these consent orders is that regulatory expectations regarding vendor management are increasing and scrutiny of these relationships will continue regardless if the activity is conducted in-house or by a supplier. This message was also delivered by the Director of the CFPB (Richard Cordray), who recently commented that “[These actions] put all financial institutions on notice about these prohibited practices and reinforces that they must make sure their service providers are complying with the law.”

Similarly, two of these consent orders focused on the sale and servicing of add-on products. Regulators of financial institutions (CFPB, FDIC, OCC, and state regulators) have directed heightened scrutiny towards the marketing, sale, and servicing of these products, focusing on the following problems (in addition to a lack of vendor oversight) including Issuers either delayed or failed to provide services after customer began to pay monthly premiums; failure to fully/accurately disclose the terms and conditions of the products or services; enrolling customers in the service programs without their affirmative consent, or without making the customer aware that they are enrolled or have to pay for the services.

Arthur B. Axelson , Senior Counsel,
Dykema Gossett PLLC

  • CFPB: Supervision, Examination & Enforcement
  • Risk Assessment by CFPB
  • How Do You Prepare?
  • Working with CFPB Examiners
  • After the Examination – CFPB’s Next Steps

Schnader Harrison Segal & Lewis LLP
Stephen A. Fogdall
speaker bio »»

Fulbright & Jaworski LLP
Brent Lindahl
speaker bio »»

Ernst & Young
Maureen Day
speaker bio »»

Dykema Gossett PLLC
Arthur B. Axelson
Senior Counsel
speaker bio »»

Who Should Attend?

Corporate counsel for banks, and outside lawyers who represent banks in agency enforcement actions. Corporate counsel and outside lawyers for non-bank financial institutions, and entities that provide services to such institutions, should attend as well (i.e., lawyers who represent entities potentially subject to Dodd-Frank’s provisions governing “non-depository covered persons”).

Why Attend?

This is a must attend event for anyone interested in understanding the CFPB Enforcement Authority.

- Detailed guidance given by the most qualified key leaders & experts
- Hear directly from key regulators & thought leaders
- Interact directly with panel during Q&A

Advanced registration is recommended as space is limited. Click the registration button below to sign up for this course today. Significant discount applies for early registration.

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Please note, the event date is firm although it may be subject to change. Please click here for details.
The Knowledge Group, LLC is producing this event for information purposes only. We do not intend to provide or offer business advice. The contents of this event are based upon the opinions of our speakers. The Knowledge Congress does not warrant their accuracy and completeness. The statements made by them are based on their independent opinions and does not necessarily reflect that of The Knowledge Congress' views. In no event shall The Knowledge Congress be liable to any person or business entity for any special, direct, indirect, punitive, incidental or consequential damages as a result of any information gathered from this webcast.





CFPB Enforcement Authority: What the Future May Hold
LIVE Webcast
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Schnader's team of outstanding lawyers serves the complex litigation and transactional needs of both long established and newly emerging businesses, including those doing business internationally and in cyberspace. We also provide wealth management and an array of personal legal services to individuals.

Fulbright & Jaworski L.L.P. is an international law firm serving the needs of businesses, governments, non-profit organizations and individual clients around the world. Fulbright is one of the largest law firms in the United States with approximately 900 lawyers and more than 75 integrated practice areas providing a broad range of industries with a full complement of legal services critical to operating in today’s global economy.

Founded in 1919, the firm has a long legacy in litigation and global dispute resolution as well as transactions and regulatory matters. Today it is also actively involved in numerous cutting-edge legal issues involving areas such as alternative energy, biotechnology, private-public partnerships, and privacy/data protection. There are 17 Fulbright locations world-wide, including international locations in Beijing, Dubai, Hong Kong, London, Munich, and Riyadh.

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With nearly 400 attorneys and professionals, Dykema is a leading national law firm with Midwestern roots and 11 major offices. Dykema has developed a national reputation for delivering a full range of legal services to Fortune 500, middle-market and emerging companies. Led by a value-focused business model long before it was trendy, Dykema’s full-service platform delivers results for sophisticated purchasers of legal services who increasingly are demanding alternative and more efficient ways of streamlining their legal work without sacrificing excellence and quality. Dykema is a strategic partner to its clients, offering dedicated client service and industry teams, highly skilled lawyers, flexible billing arrangements, and advanced technology to create financial predictability and accountability.


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