Financial Services Enforcement and Regulatory

Why Cooley

Cooley’s financial services team supports financial institutions – including banks, lenders, fintechs and service providers – throughout the entire business and regulatory life cycle. Our industry knowledge enables us to be effective advocates for our clients, while our practical market intelligence and unique insights into industry and legal trends help clients strategically navigate even the most complex matters.

We help clients achieve their most important strategic business goals, offering advisory services, regulatory counseling, product development, transactional support, licensing and registration assistance, and guidance on bank partnerships and other commercial partnership arrangements. Clients trust our team to guide them through everything from product creation to high-stakes, “bet-the-company” matters, including those arising from federal and state investigations, internal investigations, whistleblower claims, examinations and litigation. 

Our practice – which includes former regulators – supports clients in a host of complex matters related to the entire portfolio of consumer and business financial products, including lending, servicing, credit reporting, payments, deposits, money transmission and virtual currencies. The team regularly assists clients with matters pertaining to financial services laws and regulations – including the Truth in Lending Act (Regulation Z), Electronic Fund Transfer Act (Regulation E), Equal Credit Opportunity Act (Regulation B), Fair Housing Act (FHA), Real Estate Settlement Procedures Act (Regulation X), Fair Credit Reporting Act (Regulation V), Servicemembers Civil Relief Act (SCRA), Military Lending Act (MLA), prohibitions against unfair, deceptive, and abusive acts and practices (UDAP/UDAAP), and Anti-Money Laundering Act (AMLA) and Bank Secrecy Act (BSA) matters. Our team also regularly represents clients in False Claims Act (FCA), Program Fraud Civil Remedies Act (PFCRA), Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and agency administrative investigations concerning compliance with federal program guidelines, including the Payment Protection Program (PPP) and government-backed mortgage matters.

Our team has represented clients before every major financial enforcement agency at the state and federal levels, including the Consumer Financial Protection Bureau (CFPB), Department of Justice (DOJ), Federal Trade Commission (FTC), the prudential bank regulators, including the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA) and Federal Reserve, the Department of the Treasury, including the Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN), the federal housing agencies, including the Federal Housing Administration (FHA), Veterans Affairs (VA), Ginnie Mae, Fannie Mae and Freddie Mac, and state attorneys general and state financial departments. The team has defended clients in nearly every major enforcement initiative involving every financial product type, including before Congress.

The team also is well versed in the supervisory and examination process, supporting clients in pre-exam reviews, providing real-time examination support and responding to pre-enforcement communications, such as Potential Action and Request for Response (PARR) letters and preliminary findings letters (PFLs).  

Representative matters our team has handled include:

  • CFPB investigations pertaining to a wide variety of products and services – including deposit products, mortgages, credit cards, prepaid cards, auto lending, small-dollar lending, credit reporting and payments
  • DOJ investigations related to claims of discrimination, fraud, and violations of the SCRA, BSA and anti-money laundering (AML) laws
  • Regulatory responses and investigations stemming from financial institution data breaches
  • Examination and post-examination support – including matters requiring attention, pre-exam reviews and responses to regulatory demands
  • Development of payments and lending products for the largest banks, tech companies and marketplaces, as well as dozens of emerging companies
  • Negotiation of strategic bank partnership agreements – including credit, debit, prepaid, deposit and charge card programs, along with fintech/bank partnerships
  • Analysis of the applicability of money transmission and AML laws to a diverse array of products and services involving any movement of money, including virtual currency
  • Advising broker-dealers, investment advisers and other financial market participants on issues of due diligence and oversight of transactional matters, including change of control applications, approval processes and licensing

Cooley’s financial services team is part of our CooleyREG offering, through which we combine an understanding of emerging risk and industry developments to help our clients navigate an increasingly complex regulatory landscape.

Areas of practice

Counseling and  product development

  • Provide innovative solutions and advice regarding compliance with federal and state financial services and consumer protection laws applicable to financial products and services
  • Support state licensing initiatives for money transmission, consumer lending, commercial lending, mortgage lending and servicing, and debt collection
  • Offer product counseling design and development support for money movement and payments platforms, marketplace platforms, lending programs, digital currencies and alternative financial products
  • Advise on regulatory compliance strategies for bank and nonbank partnerships
  • Support industry-leading trade groups in various public policy initiatives
  • Structure BSA/AML compliance programs

Transactional support

  • Counsel clients on merchant processor agreements, referral programs, gateway services and other agreements involving any aspect of payments intermediation, as well as issuer-processing agreements
  • Provide focused regulatory support in the due diligence of financial services providers and other companies engaging in payments-related activity for investments, M&A and other transactions
  • Advise on and manage change of control approval processes and strategic licensing considerations for transactions involving regulated entities
  • Offer guidance on strategic bank partnership agreements – including payment processing, credit, debit, prepaid, deposit and charge card programs

Supervision, enforcement and litigation

Our enforcement lawyers have handled the following types of government examinations, investigations and litigation:

CFPB

  • Examination readiness, examination support and pre-enforcement communications
  • Agency and joint investigations for companies and banks of every size and type
  • Mortgage origination, advertising and disclosure practices, and compliance with the Home Mortgage Disclosure Act (HMDA) and fair lending laws
  • Mortgage servicing practices – including those involving loss mitigation and foreclosure activities – and fair servicing
  • Deposit account maintenance and overdraft practices
  • Auto lending and loan servicing, as well as ancillary product offerings
  • Online lending structures, disclosures and fees
  • Nontraditional finance products
  • Military lending and the MLA
  • Reverse mortgage advertising, origination and account management
  • Credit card marketing and add-on products
  • Payments and money transmission laws
  • Small-business lending
  • Education lending
  • Credit reporting
  • Gaming and virtual currencies

DOJ

  • FCA investigations and litigation matters involving alleged violations of guidelines and regulations established by the FHA, VA, Small Business Administration (SBA) and Treasury Department
  • Fair lending investigations – including matters involving allegations of redlining and discriminatory underwriting and pricing practices
  • Investigations involving alleged violations of the SCRA
  • Alleged violations of the Americans with Disabilities Act (ADA)

FTC

  • Marketing and advertising of financial services products
  • Fee assessment and servicing related to specialty finance products and loan alternatives
  • Fair lending investigations
  • Fintech services – including allegations related to junk fees, dark patterns, automatic renewals and negative options

The prudential banking agencies – OCC, FDIC and Federal Reserve

  • Board oversight and corporate governance
  • Supervisory rating appeals
  • Examination management
  • Merger and transactional diligence and consumer protection support
  • Horizontal and industry-wide product inquiries across all banking products and services

Investor compliance – Department of Housing and Urban Development (HUD), FHA, VA and government-sponsored enterprises (GSEs) – and Inspectors General

  • Violations involving the PFCRA and referrals to the Mortgagee Review Board
  • Fair lending inquiries and individual complaints regarding pricing, underwriting and appraisal practices
  • Compliance with government lending origination and servicing guidelines and mortgagee letters

State attorneys general and financial institution departments

  • Multistate and coordinated investigations involving a variety of consumer protection issues, including lending, fees and pricing practices
  • Strategic guidance on bank partnership models
  • Licensing inquiries

Congressional investigations

  • Fair banking and consumer protection laws
  • Government-backed lending models
  • Pandemic relief