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Kalama Lui-Kwan

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Kalama represents parties in complex commercial disputes arising out of M&A deals. He also has a national litigation practice representing consumer-facing companies in class actions and regulatory investigations.

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In a recent decision, the U.S. District Court for the Eastern District of Virginia denied a retailer’s motion to compel individual arbitration of a claim brought in a putative class action lawsuit. The complaint alleges that the retailer used deceptive sales tactics to induce the plaintiff to make an unnecessary online purchase. The court denied the retailer’s motion to compel arbitration, finding that a unilateral modification provision in its terms and conditions rendered the arbitration agreement illusory.

On August 7, the U.S. Department of Treasury hosted a virtual briefing to discuss the steps that the Biden-Harris administration is taking to address perceived unfair and deceptive practices in the consumer solar energy industry. Deputy Secretary of Treasury Wally Adeyemo, along with Federal Trade Commission (FTC) Chair Lina Khan and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, announced a new interagency consumer solar industry initiative directed at both sales and financing of residential systems. Each made statements about the unique effort to root out anti-competitive and sometimes-fraudulent activity by a handful of “bad actors” who are taking advantage of the burgeoning industry. The presenters also noted that they will be coordinating with state attorneys general (AG) and state financial regulators.

On May 2, JAMS announced its new Mass Arbitration Procedures and Guidelines and Mass Arbitration Procedures Fee Schedule (together, the Procedures), with the express goal to “facilitate the fair, expeditious and efficient resolution of Mass Arbitrations” and implicit intent to reduce the administrative burden and onerous fees of mass arbitrations, as well as the delay and potential unfairness to the parties. While effective immediately, the Procedures only apply if the parties have agreed to their application in a pre- or post-dispute written agreement. This limitation significantly decreases the effectiveness of the Procedures as a tool for hedging risks and limiting the high costs of mass arbitration.

The U.S. Court of Appeals for the Ninth Circuit recently reversed a district court’s ruling, which had denied a motion to compel arbitration of Opportunity Financial (OppFi) on the basis that the arbitration clause was substantively unconscionable due to the choice of law provision in the loan agreement containing the arbitration clause. The Ninth Circuit vacated the decision and directed the district court to refer the matter to arbitration.

We are pleased to share our annual review of regulatory and legal developments in the consumer financial services industry. With active federal and state legislatures, consumer financial services providers faced a challenging 2023. Courts across the country issued rulings that will have immediate and lasting impacts on the industry. Our team of more than 140 professionals has prepared this concise, yet thorough analysis of the most important issues and trends throughout our industry. We not only examined what happened in 2023, but also what to expect — and how to prepare — for the months ahead.

On January 15, the American Arbitration Association (AAA) issued amended Mass Arbitration Supplementary Rules and new Consumer Mass Arbitration and Mediation Fee Schedules (collectively, the New Rules). The New Rules will apply to all mass arbitration cases filed on or after January 15, but not to any mass arbitrations filed prior to that date. The New Rules aim to reduce friction and enhance process efficiency. However, unless the New Rules are supplemented by a well-constructed pre-dispute arbitration agreement, they will not solve the principal problems posed by mass arbitrations.

On January 3, The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the Agencies) issued a joint statement to banking organizations highlighting a number of risks associated with crypto-assets.

While the Agencies expressly state that “banking organizations are neither prohibited nor…

On December 14, Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) introduced the Digital Asset Anti-Money Laundering Act of 2022 (the Act) that would extend anti-money laundering and countering of the financing of terrorism requirements to cryptocurrency and digital assets. The bill follows warnings from the Treasury Department, Department of Justice, and national security and…

On November 10, the Consumer Financial Protection Bureau (CFPB) released a new complaint bulletin, highlighting consumer complaints it has received related to crypto-assets. The bulletin suggests that fraud, theft, hacks, and scams pose a significant problem in crypto-asset markets. Also, according to the bulletin, consumers reported issues with executing transactions and transferring assets between…

In an October 27 letter, the American Bankers Association (ABA) expressed concern regarding a proposal currently being considered by the Consumer Financial Protection Bureau (CFPB) that would shift liability from consumers to banks for scams involving peer-to-peer (P2P) payments. This would include requiring banks to reimburse consumers for P2P payments made but later identified…