In an article for American Banker, Jenner & Block Partner Michael W. Ross and Associate Emily A. Bruemmer examine the Consumer Financial Protection Bureau’s (CFPB) preference for less enforcement at the federal level. The authors discuss acting Director Mick Mulvaney’s announcement that the CFPB would no longer be “pushing the envelope” through enforcement actions and will be depending on state regulators for more leadership in regard to enforcement. Mr. Ross and Ms. Bruemmer explain that this development may not translate to less enforcement activity overall, but instead could lead to more inconsistent and unpredictable efforts by the state authorities. The authors note that FinTech companies’ protection of consumer data could become an area of focus and warn FinTech companies to remain vigilant regarding their privacy practices to ensure they are prepared in all the jurisdictions in which they operate.

To read the full article, please click here.

Jenner & Block Partner Anne P. Ray will speak at the 23rd Annual Consumer Financial Services Institute in Chicago. Hosted by the Practising Law Institute, the two-day program will focus on a broad array of recent regulatory, enforcement and litigation issues relating to mortgages; auto finance; credit, debit and prepaid cards; marketplace lending and Fintech; deposit accounts; student loans; and other products and services. Titled “Ethical Issues Unique to the Consumer Space,” Ms. Ray’s session will take place on May 8, 2018, the second day of the program. Ms. Ray and the other speakers will cover the impact of In re Payment Card Interchange Fee on litigating and settling class actions. They will also discuss the ethical implications in joint defense agreements and social media, as well as the ethical pitfalls in the settlement context—a mediator’s perspective. Ms. Ray’s session begins at 3:30 pm CT.

To learn more and to register for the event, please click here.

By Jolene E. Negre

On April 17, the New York Attorney General’s Office released a statement that it has launched a fact-finding inquiry into 13 cryptocurrency exchanges. Questionnaires were sent to the following exchanges:

• Coinbase, Inc. (GDAX)
• Gemini Trust Company
• bitFlyer USA, Inc.
• iFinex Inc. (Bitfinex)
• Bitstamp USA Inc.
• Payward, Inc. (Kraken)
• Bittrex, Inc.
• Circle Internet Financial Limited (Poloniex LLC)
• Binance Limited
• Elite Way Developments LLP (Tidex.com)
• Gate Technology Incorporated (Gate.io)
• itBit Trust Company
• Huobi Global Limited (Huobi.Pro)

The text of the questionnaires can be found here.

The Attorney General’s release suggests that the inquiry is part of a broader investor protection effort and emphasizes a greater need for transparency and accountability… 

To read the full Jenner & Block client alert on this subject, please click here.

Today, Jenner & Block announced the formation of a FinTech industry group, expanding the firm’s strong reputation in advising clients on complex financial services and consumer-related matters.  Leveraging our industry knowledge and significant capabilities, the FinTech industry group will work strategically with businesses to address and stay ahead of new developments as financial technology and the regulatory landscape continue to evolve.  Anchored by a team of experienced former government officials, including a former senior counsel at the Consumer Financial Protection Bureau, prosecutors and in-house counsel, the team focuses on advising FinTech companies and businesses that rely on financial technology to navigate challenges in this increasingly complex area of commerce.  The group assists clients in a variety of legal areas including compliance and controls, data security, trade secrets and intellectual property protection, insurance coverage, dispute and controversy resolution, government and internal investigations and corporate and transactional matters.

To learn more, please click here.

In an article for Lending Times, Jenner & Block Partner Kali Bracey and Associate Marguerite L. Moeller discuss potential legal risks that may arise as a result of companies using big data to make credit extension decisions.  The article explains that despite the growing trend of using artificial intelligence and machine learning to make unbiased credit determinations and model credit risk, big data can in fact lead to inadvertent disparate impact on protected classes.  Lenders must ensure that they abide by the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) to avoid discriminatory impact in terms of race, gender or other protected classes in lending decisions.  The FHA prohibits discrimination in securing financing for housing, while the ECOA prohibits discrimination for credit transactions.  They must also comply with the Fair Credit Reporting Act (FCRA), which requires lenders to disclose to consumers if they deny credit based on a consumer report and to disclose to consumers if they charge more for credit based on a consumer report.  The authors recommend that companies incorporate federal fair lending and credit laws into their algorithmic models.  While it is unclear how the current administration will address these issues, federal regulators are paying attention to the emerging field of big-data-based lending.  Furthermore, private plaintiffs and state attorneys general may still take action in the form of seeking punitive damages and equitable and declaratory relief or enforcing state statutes that protect fair lending.

To read the full article, please click here.