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On November 16, Sen. John Thune (R-S.D.), the current chairman of the Senate Commerce Committee, and Ed Markey (D-Mass.), a member of the committee and the author of the Telephone Consumer Protection Act, unveiled the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (“TRACED Act”). Among other things, this bill would require carriers to eventually implement “an appropriate and effective call authentication framework” and instructs the Federal Communications Commission to engage in rulemaking to protect consumers from receiving unwanted calls and text messages from unauthenticated phone numbers.

According to its proponents, an “ever increasing number … of robocall scams” prompted this bill. Indeed, one report touted by Markey estimated the number of spam calls will grow from 29% of all phone calls this year to 45% of all calls next year.

In its current form, the TRACED Act gives regulators more time to find scammers, increases civil forfeiture penalties for those caught, promotes call authentication and blocking adoption, and brings relevant federal agencies and state attorneys general together to address impediments to criminal prosecution of robocallers who intentionally flout laws.

More specifically, this act makes the following changes to the existing federal regulatory scheme:

  • Broadens the authority of the FCC to levy civil penalties of up to $10,000 per call for those who intentionally violate telemarketing restrictions.
  • Extends the window for the FCC to catch and take civil enforcement action against intentional violations to three years after a robocall is placed. Under current law, the FCC has only one year to do so. The FCC has told the committee that “even a one-year longer statute of limitations for enforcement” would improve enforcement against willful violators.
  • Brings together the Department of Justice, FCC, Federal Trade Commission, Department of Commerce, Department of State, Department of Homeland Security, the Consumer Financial Protection Bureau, and other relevant federal agencies, as well as state attorneys general and other non-federal entities, to identify and report to Congress on improving deterrence and criminal prosecution at the federal and state level of robocall scams.
  • Requires providers of voice services to adopt call authentication technologies, enabling a telephone carrier to authenticate consumers’ phone numbers prior to initiating any call.
  • Directs the FCC to initiate a rulemaking to help protect subscribers from receiving unwanted calls or texts from callers using unauthenticated numbers.

Announcing the TRACED Act, neither senator minced their words. “The TRACED Act targets robocall scams and other intentional violations of telemarketing laws so that when authorities do catch violators, they can be held accountable,” Thune said in a statement. He continued: “Existing civil penalty rules were designed to impose penalties on lawful telemarketers who make mistakes. This enforcement regime is totally inadequate for scam artists and we need do more to separate enforcement of carelessness and other mistakes from more sinister actors.” Markey added: “As the scourge of spoofed calls and robocalls reaches epidemic levels, the bipartisan TRACED Act will provide every person with a phone much needed relief. It’s a simple formula: call authentication, blocking, and enforcement, and this bill achieves all three.”

Troutman Sanders will continue to monitor this and related legislative proposals.

BTI Consulting Names Troutman Sanders a ‘Standout Law Firm’ in Three Litigation Categories

Troutman Sanders LLP has been designated a “Standout Law Firm” in BTI Consulting Group’s Litigation Outlook 2019 rankings in the following three categories:

The firm is regularly recognized by BTI. According to the 2018 BTI Client Service A-Team report, Troutman Sanders ranks within the top 15 percent of all law firms for client service performance. In recognition of the firm’s strong service culture, Troutman Sanders also has been on the BTI Client Service A-Team for 13 consecutive years.

BTI is an independent consulting group that provides client-based research to the legal community. Its Litigation Outlook 2019 survey is the result of more than 350 telephone interviews conducted between January 11 and August 28 with legal decision makers at companies with U.S. revenues of $1 billion or more.

Troutman Sanders’ litigators partner with clients to resolve their most challenging disputes across the United States and globally. Attorneys have prevailed on multi-million dollar, bet-the-company cases, high-stakes government investigations, and complex cases in many industries including energy, banking and financial services, insurance, pharmaceutical and life sciences, construction, telecommunications, and technology.

About BTI

Based in Boston, BTI Consulting Group has been providing market research and management consulting for more than 25 years. Billing itself as the leader in providing strategic market research to law and management firms, BTI advertises having the largest knowledge base of clients’ needs and satisfaction. BTI provides research, sales training, and consulting services to help companies learn how to better service and operate within their market.

On October 17, the Office of Information and Regulatory Affairs released the CFPB’s fall 2018 rulemaking agenda.  In the preamble to the agenda, the CFPB notes that the agenda lists the regulatory matters that the agency “reasonably anticipates having under consideration during the period from October 1, 2018 to September 30, 2019.”

Implementing Statutory Directives.  According to the CFPB, much of its rulemaking agenda focuses on implementing statutory directives.  Those statutory directives include:

  • The directive by the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) that the CFPB engage in rulemaking to (1) exempt certain creditors with assets of $10 billion or less from certain mortgage escrow requirements under the Dodd-Frank Act, and (2) develop standards for assessing consumers’ ability to repay Property Assessed Clean Energy (“PACE”) financing; and
  • The Dodd-Frank Act’s directive that the CFPB, prior to any public disclosure, modify or require modification of loan-level data submitted by financial institutions under the Home Mortgage Disclosure Act (“HMDA”) so as to protect consumer privacy interests.

Continuation of Other Rulemakings.  In addition, the CFPB notes that it “is continuing certain other rulemakings described in its Spring 2018 Agenda.”  Those continuing rulemaking efforts include:

  • Anticipated rulemaking to reconsider the 2017 Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule; 
  • Anticipated rulemaking to reconsider its 2015 HMDA rule, for instance, by potentially revisiting such issues as the institutional and transactional coverage tests and the rule’s discretionary data points; and 
  • Anticipated rulemaking to address how to apply the 40-year-old Fair Debt Collection Practices Act (“FDCPA”) to modern collection practices.

Further Planning.  The CFPB also notes that it “has a number of workstreams underway that could affect planning and prioritization of rulemaking activity, as well as the way in which it conducts rulemakings and related processes.”  Those workstreams include:

  • Ongoing efforts to reexamine rules that the Bureau issued to implement Dodd-Frank Act requirements concerning international remittance transfers, the assessment of consumers’ ability to repay mortgage loans, and mortgage servicing;
  • Ongoing efforts to reexamine rules implementing a Dodd-Frank Act mandate to consolidate various mortgage origination disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act;
  • Ongoing efforts to reexamine the requirements of the Equal Credit Opportunity Act (“ECOA”) concerning the disparate impact doctrine, in light of recent Supreme Court case law and Congressional disapproval of a prior Bureau bulletin concerning indirect auto lender compliance with ECOA and its implementing regulations; and
  • Ongoing efforts directed at determining whether rulemaking or other activities may be helpful to further clarify the meaning of “abusiveness” under section 1031 of the Dodd-Frank Act.

In the last few years, the right to privacy debate in the United States has increased in pace and volume. One issue at the center of this long debate is how best to implement the right privacy tools in a manner that does not disrupt business and technological innovation. The current criticisms fail to appreciate that the next technological paradigm is completely dependent on both the quality and quantity of data.

As connected things (IoT) explode in popularity, they make things such as augmented reality (AR) and autonomous vehicles possible. And as interconnectivity grows, so too do the opportunities. The companies that fail to properly leverage new technologies and data opportunities may find themselves falling behind their competitors.

In venturing into these emerging paradigms, companies should stay informed of recent enforcement actions, cases, and laws to determine how their role within new ecosystems may be impacted.

This publication covers the ongoing evolution of the legal landscape for data-centric products, so that organizations can continue to succeed in their development of data-centric products.

Click here to download the report

In several weeks, the U.S. Securities and Exchange Commission will release its annual enforcement results, and speculation about the trajectory of the SEC’s Division of Enforcement will resume in full force.

The results will reflect enforcement activity from the first full fiscal year of Jay Clayton’s tenure as SEC chairman. In the 16 months since Clayton’s swearing in, there have been repeated questions about how vigorously the Division of Enforcement is policing the U.S. capital markets. Naturally, following Mary Jo White’s “bold and unrelenting” enforcement agenda, many expected a decline in enforcement activity under Clayton.

There has, in fact, been a dip in the number of SEC enforcement actions during Clayton’s tenure, but the decline has not been as precipitous as many anticipated. And the decline in enforcement activity does not tell the whole story of the current enforcement program. There have been marked changes in priorities and tone and subtle shifts in the mix of cases coming out of the commission.

To read full article go to Law360

Clarity on Overlapping Background Check Laws in California

By Timothy St. George, David Anthony, Ronald Raether, Jonathan Yee and Sadia Mirza

On Aug. 20, 2018, the California Supreme Court issued its long-awaited order in Connor v. First Student Inc., finding the state’s Investigative Consumer Reporting Agencies Act, or ICRAA, was not unconstitutionally vague as applied to employer background checks, despite overlap with the Consumer Credit Reporting Agencies Act, or CCRAA.[1]

The Supreme Court resolved a conflict between two courts of appeal which had left many consumer reporting agencies, or CRAs, wondering whether the ICRAA applied even if they did not obtain the information from personal interviews — the definition of “investigative consumer report” used under the Fair Credit Reporting Act to impose additional requirements under 15 U.S.C. §1681l similar to those included in the ICRAA. With this decision, CRAs providing consumer reports for employment and tenant screening will need to carefully review their products to assure compliance with the ICRAA and the CCRAA.

View full article published on Law360.


Increases Attorney Diversity by Broadening Candidate Pool

ATLANTA, August 22 – Troutman Sanders LLP is one of 41 law firms that have earned Mansfield Certification from Diversity Lab, the national incubator for innovative ideas and solutions to boost diversity and inclusion in law.

Law firms earning Mansfield Certification met or exceeded goals for law firm diversity and inclusion by adopting and complying with the Mansfield Rule, which was inspired by the NFL’s Rooney Rule and named after Arabella Mansfield, the first woman admitted to the practice of law in the United States.

“We are proud to achieve Mansfield Certification,” said Steve Lewis, managing partner of Troutman Sanders. “Increasing the diversity of our workforce is a strategic priority for the firm, and our commitment to an inclusive environment at work is a core value that helps define us.”

Mansfield-certified firms made significant progress in diversifying, following adoption of the Mansfield Rule, specifically:

  • 40 percent of the firms increased representation of women and diverse lawyers in leadership and governance roles;
  • 33 percent increased the number of women and diverse senior associates hired;
  • 35 percent increased the number of women and diverse partners hired;
  • 38 percent increased the number of women and diverse lawyers promoted to partner.

About Troutman Sanders

With a diverse practice mix, workforce and footprint, Troutman Sanders has cultivated its reputation for a higher commitment to client care for over 120 years. Ideally positioned to help clients across sectors realize their business goals, the firm’s 650 attorneys transact for growth, resolve mission-threatening disputes and navigate complex legal and regulatory challenges. See troutman.com for more information.

On August 20, 2018, the Supreme Court of California issued its long-awaited order in Connor v. First Student, Inc. finding the state’s Investigative Consumer Reporting Agencies Act (“ICRAA”) was not unconstitutionally vague as applied to employer background checks, despite overlap with the Consumer Credit Reporting Agencies Act (“CCRAA”). See Connor v. First Student, Inc., No. S229428, – P.3d –, 2018 Cal. LEXIS 6266 (Cal. Aug. 20, 2018). The Supreme Court resolved a conflict between two courts of appeal which had left many consumer reporting agencies (“CRAs”) wondering whether the ICRAA applied even if they did not obtain the information from personal interviews – the definition of “investigative consumer report” used under the Fair Credit Reporting Act to impose additional requirements under 15 U.S.C. §1681l similar to those included in the ICRAA. With this decision, CRAs providing consumer reports for employment and tenant screening will need to carefully review their products to assure compliance with the ICRAA and the CCRAA.

Relevant Legislative and Procedural History

Under California law, consumer reports are classified under the CCRAA and/or the ICRAA, depending largely on the means used to collect the information contained in those “consumer reports.” The CCRAA has always been limited to consumer reports containing specific credit information, and it expressly excludes character information obtained through personal interviews. And, certain reports containing information gathered through personal interviews are subject to the ICRAA only. However, both statutes govern reports that contain information relating to character and creditworthiness, based on public information and personal interviews, that were used for employment background purposes. Further, both the ICRAA and CCRAA impose obligations on CRAs regarding disclosure to consumers when the agencies furnish reports and also limit when and to whom those reports may be furnished and how such information must be verified before it is reported. However, the specific obligations and limitations, and the remedies for violations of each act are different. The ICRAA, for instance, imposes stricter requirements and penalties than the CCRAA. Under the ICRAA, an investigative consumer reporting agency (or user of information) may be liable to the consumer who is the subject of the report if the agency (or user) fails to comply with any requirement under the ICRAA in an amount equal to $10,000 or actual damages sustained by the consumer, whichever is greater, plus the cost of the action and reasonable attorney’s fees.

In Connor, which has been pending since 2010, a class of current and former bus drivers alleged that the defendant employers and consumer reporting agencies violated the ICRAA when the employers obtained background checks on the drivers without providing them notice and without obtaining the drivers’ prior written authorization to obtain such reports as required by the ICRAA. The defendant employers moved for summary judgment claiming that the ICRAA is unconstitutionally vague because it overlaps with the CCRAA and fails to provide adequate notice to regulated entities as to whether the statute governs its conduct, and that, in any event, the employers’ notice satisfied the requirements of the CCRAA.

The trial court granted defendants’ motion, finding that consistent with state court precedent (see Ortiz discussed below), the ICRAA was unconstitutionally vague and impressibility overlaps with the CCRAA, such that a person of common intelligence cannot determine which statute governs its conduct.

The Court of Appeal in Connor reversed in 2015, finding that “[t]here is nothing in either the ICRAA or the CCRAA that precludes application of both acts to information that relates to both character and creditworthiness.” The Court of Appeal further stated that under California law, “[a]n agency that furnishes a report containing both creditworthiness information and character information, and the person who procures or causes that report to be made, can comply with each act without violating the other. And despite the overlap between the CCRAA and the ICRAA … there remain certain consumer reports that are governed exclusively by the ICRAA (those with character information obtained from personal information) because each act expressly excludes those specific reports governed by the other act.”

The Court of Appeal decision in Connor affirming the constitutionality of the ICRAA was itself contrary to a competing 2007 decision from the Court of Appeal in Ortiz v. Lyon Management Group, Inc., 157 Cal. App. 4th 604 (2007), which held that the ICRAA was unconstitutionally vague, as applied to tenant screening reports containing unlawful detainer information, as the court in Ortiz held that there was no “rational basis to determine whether unlawful detainer information constitutes creditworthiness information subject to the CCRAA or character information subject to the ICRAA.” Thus, given this split in authority, the issue was ripe for review by the Supreme Court of California.

The Supreme Court of California’s Decision

Before the Supreme Court of California, the defendant employers in Connor raised two principal contentions. First, defendants argued that the CCRAA and the ICRAA were initially intended to be exclusive of each other and that the ICRAA’s subsequent amendment in 1998 to expand its scope to include character information obtained under the CCRAA or “obtained through any means” was not intended to abolish that distinction. The Supreme Court rejected the argument, holding that while the legislature amended the ICRAA to expand its scope, it did not concurrently amend the CCRAA to limit its scope.

Thus, the Supreme Court found that potential employers could comply with both statutes without undermining the purpose of either. “In interpreting ICRAA and CCRAA, we agree with the Court of Appeal and find that potential employers can comply with both statutes without undermining the purpose of either . . . . If an employer seeks a consumer’s credit records exclusively, then the employer need only comply with CCRAA. An employer seeking other information that is obtained by any means must comply with ICRAA. In the event that any other information revealed in an ICRAA background check contains a subject’s credit information and the two statutes thus overlap, a regulated party is expected to know and follow the requirements of both statutes, even if that requires greater formality in obtaining a consumer’s credit records (e.g. seeking a subject’s written authorization to conduct a credit check if it appears possible that the information ultimately received may be covered by ICRAA).” In this manner, the Supreme Court held that the prior decision in Ortiz was “inconsistent with [its] own precedent governing the interpretation of overlapping statutes.”

The defendants in Connor also argued that if the legislature intended the ICRAA to apply to employment screening reports that previously were exclusively subject to the CCRAA, then it would have amended the CCRAA to conform to this understanding. However, the Supreme Court found that the limiting language of the CCRAA obviated the need to amend the statute in response to the changes it made to the ICRAA. Thus, the Supreme Court confirmed that the ICRAA is also applicable in the employment screening context, despite its overlap with the CCRAA. And, by overruling Ortiz, the Supreme Court likewise confirmed that the ICRAA is also applicable in the tenant screening context, and more generally when its threshold definitions are satisfied.

The Supreme Court ultimately held that: (1) because partial overlap between two statutes does not render one superfluous or unconstitutionally vague; (2), the ICRAA and CCRAA can coexist, as both acts are sufficiently clear; and (3) each act regulates that information that the other does not, which supports concurrent enforcement of both statutes.

Practical Impact of the Decision

As a practical matter, the Supreme Court’s decision removes the cloud of uncertainty regarding whether the ICRAA is enforceable against consumer reporting agencies preparing reports in California. Companies that fall under the purview of the ICRAA must comply with its provisions, regardless of whether the report also triggers the requirements of the CCRAA.

The ICRAA contains a number of distinct, technical requirements, that should be the subject of a compliance review after the decision in Connor. To use but one example, under the ICRAA, “public record” information (e.g., civil actions, tax liens, and outstanding judgments) cannot be included unless the background checking agency has verified the accuracy of the information during the 30-day period before the report is issued. That requirement counsels in favor of the implementation of procedures to address any delay of 30 days or more in receiving public records updates from the providers of such records.

The decision in Connor will also have indirect ramifications for other open questions regarding the preparation of consumer reports in California. For instance, the matter of Moran v. Screening Pros, LLC, No. 2:12-CV-05808-SVW, 2012 U.S. Dist. LEXIS 189350 (C.D. Cal. Nov. 20, 2012), is currently on appeal to the United States Court of Appeals for the Ninth Circuit. Moran, however, was stayed pending this decision in Connor. The Moran case concerned the issue of what dates must be used to calculate the temporal limitations on reporting of criminal records that do not result in a conviction under the federal Fair Credit Reporting Act. Presumably, that case will also now move forward to resolution.

Troutman Sanders LLP has a national and industry-leading practice counseling clients and defending them in litigation concerning consumer reporting issues under the Fair Credit Reporting Act and its state part counterparts, including under California state law. We will continue to monitor these developments.

On July 31, 2018, the Office of the Comptroller of the Currency (“OCC”) announced its intent to accept applications for special purpose national bank charters from eligible non-depository financial technology (“Fintech”) companies.[1] This announcement coincides with the release of a Treasury Department report supporting financial innovation and the regulation of nonbank financial entities.[2]  These announcements signal a significant shift in the current banking marketplace. On the one hand, the announcements are good news for Fintech disrupters, as it opens an avenue to reaching a nationwide market despite sometimes hostile state laws. On the other, for traditional banks, the announcements are a further harbinger, if any is needed, of the emerging new competition from Fintech.

The OCC’s Response to Technological Innovation in Banking

Over the past several years, Fintech has caused meaningful disruption in the financial services industry. Working with banks and non-bank businesses, Fintech companies have introduced new approaches to traditional banking products and services, and entirely new products and services, by leveraging technology, data, and connectivity. Typically, Fintech avoids the expense of extensive brick-and-mortar physical presence, while reaching broad markets, by using the internet to provide products and services.

The OCC has expanded special-purpose national bank charters (“SPNBCs”) to eligible Fintech companies to bring these companies within the U.S. bank regulatory system, which in turn will increase consumer protection, foster healthy competition, and encourage technological innovation in the banking industry. Also, by granting SPNBCs to Fintech companies, the OCC will expand its oversight of technology-based products and services that are reshaping the banking industry. In exchange, OCC-chartered Fintech companies will be able to conduct business throughout the U.S. under a uniform set of regulations and supervisory standards without the need to seek multi-state licensing or partner with insured depository institutions, while enjoying the significant benefits of federal preemption of many state laws under the National Bank Act.

Only Certain Fintech Companies May Qualify for the OCC’s Special Purpose National Bank Charter

Historically, a special-purpose national bank has been an entity “that engages in a limited range of banking or fiduciary activities, targets a limited customer base, incorporates nontraditional elements, or has a narrowly targeted business plan.”[3] The OCC has for many years issued SPNBCs for trust institutions and credit card banks with little to no fanfare. In the current context, the OCC will make SPNBCs available to those Fintech companies engaged in one of the two core banking functions of paying checks or lending money (including activities interpreted by the OCC as the equivalent thereto[4]), subject to the OCC’s approval of a charter application (discussed below). However, the OCC will not consider applications from Fintech companies involving proposals to engage in deposit-taking activities.[5]  Those Fintech companies must apply to the Federal Deposit Insurance Corporation (“FDIC”) for deposit insurance and seek a full-service bank charter.

The Benefits of the SPNBC

As with a national bank, a Fintech company that obtains a SPNBC will be subject to the corporate licensing, organization and structure provisions of the National Bank Act. In addition, the same statutes, regulations, examination and reporting metrics, and ongoing supervisory requirements applicable to national banks, such as legal lending limits, will apply to SPNBC Fintech companies.[6] Fintech companies that operate as special purpose national banks will also be subject to other federal statutory schemes such as the Bank Secrecy Act and federal anti-money laundering regulations, as well as prohibitions against unfair, deceptive or abusive acts or practices.[7] A Fintech company that obtains a SPNBC that engages in consumer lending will also continue to be subject to federal consumer lending laws, such as the Truth in Lending Act, the Equal Credit Opportunity Act, and the Fair Credit Reporting Act.

For a Fintech company that obtains a SPNBC, burdensome state-by-state licensing, regulatory and supervisory requirements – including state usury laws – will be preempted by the National Bank Act.[8] These companies will not need to be licensed under state law to engage in any activity permissible pursuant to the National Bank Act. However, a Fintech company that obtains a SPNBC should expect that some consumer protection and other state laws will continue to apply. Examples of state laws generally applicable to national banks include laws on anti-discrimination, fair lending, debt collection, and foreclosure.

The SPNBC Application Process

To obtain a SPNBC, a Fintech company must submit to the same de novo application review process as national banks, including an assessment of whether the Fintech company has a reasonable chance of success and will (i) be operated in a safe and sound manner, (ii) provide fair access to financial services, (iii) promote the fair treatment of customers, (iv) ensure compliance with applicable laws and regulations, and (v) foster healthy competition in the marketplace. [9]

The OCC’s approval of a Fintech company’s application to obtain a SPNBC will depend on the applicant:

    • presenting a comprehensive business plan that articulates why a SPNBC is being sought with significant detail about proposed activities; [10]
    • demonstrating the ability to meet minimum and ongoing capital and liquidity levels proportionate to the risk and complexity of the activities proposed in the business plan;[11]
    • committing to provide fair access to financial services and fair treatment of customers commensurate with the high standards imposed on traditional banks by the Community Reinvestment Act;[12] and
    • developing and committing to adhere to a contingency plan that includes various scenarios that could threaten the viability of the Fintech company.[13]

If approved for a SPNBC, the OCC will subject the recently chartered Fintech company to a scheduled supervisory cycle, including on-site examination and periodic off-site monitoring (as it would any de novo bank).[14] This means rigorous ongoing supervisory oversight to ensure that management and the board of directors are properly executing their business strategy and the Fintech company is meeting its performance and compliance goals.

Cost-Benefit Approach to the SPNBC

Whether a Fintech company should pursue a SPNBC from the OCC requires a tailored cost-benefit analysis. If the OCC processes Fintech applications for SPNBCs as rigorously as traditional de novo national bank charter applications, the SPNBC process could take several months from prefiling to approval. The OCC has stated that proposals from Fintech companies without an established business record will be subject to more scrutiny to evaluate the likelihood of long-term success.

Challenges from State Banking Regulators

In response to the OCC’s preliminary proposal regarding SPNBCs and Fintech issued in 2016, the New York Department of Financial Services and the Conference of State Bank Supervisors filed separate lawsuits challenging the OCC’s authority to issue SPNBCs to Fintech companies. Those suits were both dismissed on the basis that OCC had yet to issue any special purpose national bank charters. The OCC’s announcement of its intent to accept Fintech SPNBC applications paves the way for those parties to renew their opposition as soon as the first SPNBC is issued to a Fintech company, if not before.


The OCC’s decision to accept SPNBC applications from Fintech companies presents an opportunity for Fintech participants and the financial industry. Whether you are an established Fintech company or contemplating a new business, Troutman Sanders is ready to help you navigate the SPNBC process.

[1] OCC Press Release NR 2018-74 (July 31, 2018).

[2] U.S. Department of the Treasury, Press Release:  “Treasury Releases Report on Nonbank Financials, Fintech, and Innovation” (July 31, 2018).

[3] OCC Licensing Manual Suppl., Considering Charter Applications from Financial Technology Companies, p. 2 (July 2018).

[4] The OCC has indicated that it views “facilitating payments electronically” as the “modern equivalent of paying checks” and that the scope of qualifying activities would be determined on a case-by-case basis. See OCC White Paper, Exploring Special Purpose National Bank Charters, p. 4 (Dec. 2016).

[5] Id.

[6] Id. at 2 n.4 (internal citations omitted).

[7] Such prohibitions will continue to apply as required either by Section 5 of the Federal Trade Commission Act or Section 1036 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

[8] See generally Barnett Bank of Marion County v. Fla. Ins. Comm’r, et al., 517 U.S. 25 (1996) (federal law preempts state financial laws that prevent or significantly interfere with exercise of powers by national bank).

[9] OCC Licensing Manual Suppl. at 5.

[10] Id. at 6-8. See also 12 C.F.R. § 5.20(h) (detailing specific items to be addressed in business plans).

[11] Id. at 8-10. This may include an OCC-specified minimum capital level – and, if applicable, a commitment from the applicant’s parent company.

[12] Id. at 10. See also OCC Policy Statement on Financial Technology Companies’ Eligibility to Apply for National Bank Charters, p. 3 (July 31, 2018).

[13] The contingency plan must outline strategies for restoring the Fintech company’s financial strength and options for selling, merging, or liquidating the entity if the recovery strategies are ineffective. See OCC Licensing Manual Suppl. at 10.

[14] Id. at 13.

Two Troutman Sanders LLP attorneys discuss the Concepcion ruling, examining the historical landscape of arbitration, the law prior to the ruling, and what courts have done since.

When the Supreme Court (Court) handed down its opinions in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the majority’s holding engendered breathless (at least in legal terms) headlines. Clearly, as arbitration’s opponents and proponents concurred, five jurists, led by Justice Antonin Scalia, had consigned bans on class-action arbitration waivers into oblivion in the hallowed name of the Federal Arbitration Act (FAA), 9 U.S.C. §§1–16.

Possibly due to the legal establishment’s quick recognition of its utility and peril, however, feverish debate over this holding’s validity and advisability beclouded the lead opinion’s subtle affirmation of older filaments of legal thought and endorsement of a new analytical approach to the FAA’s so-called “Savings Clause.”

Time’s passage has changed little, this initial ignorance ossifying instead. As a result, in opinion after opinion issued over the past eight years, these gravid assertions have rarely featured, and defects traceable to their inexplicable omission and damaging to their precedential value now plague much of arbitration law’s post-Concepcion jurisprudence. To discern these latent possibilities and buried flaws, one must return to, and pull back the curtain on, this most controversial matter.

View full article published on Bloomberg Law