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Jesse Silverman

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Jesse provides practical and business-minded advice to clients in the financial services sector. With senior in-house and both state and federal government experience, he helps clients mitigate potential risks throughout their business cycle.

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In this episode of The Consumer Finance Podcast, Chris Willis is joined by Jesse Silverman, a seasoned member of Troutman Pepper’s Financial Services team, and Alex Johnson, a fintech industry expert and author of the Fintech Takes newsletter. The episode delves into the evolving landscape of bank-fintech partnerships and banking as a service, exploring the regulatory challenges and existential risks faced by fintech companies. The conversation highlights the need for more robust regulatory frameworks, improved consumer disclosures, and the importance of serious, well-vetted partnerships to ensure the sustainability and innovation of the fintech sector. Tune in to gain insights into the future of fintech and the critical role of regulatory compliance in fostering a secure and innovative financial ecosystem.

Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a proposed interpretive rule opining that earned wage access (EWA) products — whether provided through employer partnerships or marketed directly to borrowers — are subject to Truth in Lending Act (TILA) and Regulation Z requirements. The proposed rule’s broad definitions and aggressive stance on fees and tips as finance charges conflict with many state laws and could lead to litigation.

In this episode of The Consumer Finance Podcast, Chris Willis discusses the complexities and potential pitfalls of bank-fintech partnerships. Joined by colleagues Alexandra Steinberg Barrage, Matthew Bornfreund, and Jesse Silverman, the conversation delves into the structure of banking-as-a-service (BaaS) relationships, regulatory pressures, and key friction points such as BSA/AML compliance and ledgering. The team offers practical solutions for both banks and fintechs to ensure successful collaborations, emphasizing the importance of clear roles, responsibilities, and robust compliance measures. This episode is essential listening for anyone involved in or considering a bank-fintech partnership.

Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) issued an “interpretive rule,” subjecting “Buy Now, Pay Later” (BNPL) transactions to provisions of Regulation Z applicable to “credit cards.” Among other things, this classification would require BNPL and other lenders to extend many of the same legal protections and rights to consumers that apply to traditional credit cards, including the rights to dispute charges and demand refunds for returned products, and, potentially, receive periodic statements. The Bureau claims its authority to issue this interpretive rule — in lieu of a formal rulemaking — stems from the Truth in Lending Act (TILA) and Regulation Z, and its general authority to issue guidance as set forth in § 1022(b)(1) of the Consumer Financial Protection Act of 2010.

In this episode of The Consumer Finance Podcast, Chris Willis is joined by colleague Jesse Silverman. They discuss the crucial steps fintech firms need to take to establish and maintain successful partnerships with banks. Silverman, with his unique background as a state regulator, CFPB staff member, and fintech executive, provides insights into the preparation, due diligence, and onboarding processes. He emphasizes the importance of understanding the bank’s compliance requirements, having clear policies and procedures, and ensuring a robust information security system. Silverman also discusses the benefits and challenges of using a Banking as a Service (BaaS) partner. The episode provides valuable advice for fintech companies looking to navigate the complexities of partnering with banks in a highly regulated industry.

On April 17, the Consumer Financial Protection Bureau (CFPB or Bureau) entered a consent order against BloomTech, a for-profit vocational school, and its CEO, Austen Allred, for deceptive marketing practices related to income-share agreements (ISAs). The CFPB found that BloomTech and Allred misled students about the nature and cost of their ISAs and made false claims about job-placement rates for graduates. The CFPB’s action highlights the Bureau’s ongoing scrutiny of ISAs, including the Bureau’s classification of ISAs as loans, and the Bureau’s concern that consumers may not fully understand the true cost of their educations if they use ISAs.

Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a procedural rule streamlining the designation proceedings for nonbank supervision based on a particular entity posing “risks to consumers.” As discussed in “Our Take” below, the changes are designed to encourage nonbanks to volunteer to be supervised, while making it easier for the CFPB to impose supervisory oversight when companies do not consent.