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Consumer Financial Services

The Consumer Financial Services group’s exceptional breadth of knowledge and experience helps mortgage lenders and other consumer finance companies navigate the broad range of US federal and state laws impacting their operations.

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Consumer Financial Protection Bureau Five-Year Retrospective

Consumer Financial Protection Bureau Five-Year Retrospective Cover

Mayer Brown’s Consumer Financial Services group is a world-class team with a well-established and highly respected record of advising clients with regard to the full panoply of issues that confront residential mortgage lenders, non-mortgage consumer credit lenders and card and payment system operators. The group includes a dedicated team of lawyers and additional professionals and is a vital component of Mayer Brown’s global Financial Services Regulatory & Enforcement practice. 

With its exceptional breadth of knowledge and experience, the Consumer Financial Services group helps mortgage lenders and other consumer finance companies navigate the broad range of US federal and state laws that impact their business' operations. Members of the group perform as trusted advisors in every aspect of the consumer lending spectrum, including formation, licensing and approvals, regulatory compliance, government enforcement, internal investigations, class action defense, and public policy and government affairs.

The strength and experience of our team in the nation’s capital means we have the capabilities to work with the federal agencies that supervise consumer financial service providers. Our presence in Washington DC enables us to keep our hand on the pulse of government policy, which enhances our ability to obtain agency approvals and to defend against administrative enforcement actions. A number of our lawyers have served in federal and state agencies, including the Department of the Treasury, Securities and Exchange Commission (SEC), Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Department of Justice (DOJ), Department of Housing and Urban Development (HUD) and numerous offices of state attorneys general.

Our clients span the entire consumer financial services spectrum, encompassing traditional consumer financial services companies (such as depository institutions, mortgage lenders, auto lenders, consumer finance companies, student lenders, credit card issuers, loan servicers, broker-dealers, payday lenders, investment banks, money services businesses, prepaid card issuers and sellers, and payment systems providers), as well as non-financial companies (such as homebuilders, retailers, title insurers and agencies, real estate brokers, relocation service companies, online financial service aggregators, insurance companies, peer-to-peer lenders and technology companies) that provide consumer financial services in addition to their core business activities.

In addition to the broad range of types of clients identified above, our team also represents companies that support the consumer financial services industry, but that do not directly service consumers. Examples include broker-dealers, venture capital firms and hedge funds that invest in consumer financial services providers, rating agencies, vendor and appraisal management companies, technology vendors to the financial services industry and document preparation companies.

Areas of Practice
Our extensive knowledge of the regulatory and business environment in which our clients operate means that we are highly qualified to represent their interests and protect them from risk across the full range of transactions in the mortgage banking, prepaid card, payments systems and consumer finance areas, including the following:

  • Mergers, sales and acquisitions of mortgage banking companies, consumer finance companies and prepaid card issuers
  • Purchases and sales of mortgage loans and other consumer finance assets and related servicing rights
  • Servicing and subservicing agreements for performing and distressed assets
  • Broker, correspondent and wholesale origination agreements
  • Joint ventures, including affiliated RESPA-compliant business arrangements
  • Business entity formation and governance, including corporate bylaws, stockholders agreements, limited liability company agreements and partnership agreements
  • Comprehensive due diligence reviews of companies and financial assets
  • Warehouse loan and repurchase financing agreements
  • Pooling and servicing agreements and securitization
  • Data processing and service bureau agreements and software licensing agreements
  • US and international outsourcing agreements, including contract processing and underwriting agreements (including “private label” agreements) and technology outsourcing agreements
  • Affinity and marketing agreements
  • Executive and other employment agreements
  • Creation and review of seller and servicer guides
  • Drafting user agreements and other transaction documents for prepaid card programs

The firm has lawyers throughout the Americas, Asia, Europe and the Middle East who counsel on M&A transactions involving banks and savings institutions, insurance companies, broker-dealers, asset managers and finance companies of all sizes. We handle matters ranging in size and complexity from small- and mid-size transactions within a single national or regional market to multibillion-dollar cross-border transactions.

We collaborate regularly with our colleagues in Mayer Brown’s industry-leading Structured Finance group. Mayer Brown’s team of more than 100 structured finance lawyers has securitized nearly every conceivable asset type. When consumer finance lenders require creative, practical, business-oriented financial market solutions, we work in concert with our structured financial colleagues to deliver seamless experience in the conduit, CDO, derivative and synthetic markets. Our experienced teams and collaborative practice approach ensure that clients are able to avail themselves of the intellectual depth and industry insight needed to maximize both current and developing market opportunities.

Regulatory Compliance and Due Diligence
Compliance with state and federal regulatory requirements is a fundamental component of the work of our Consumer Financial Services group. Our lawyers have worked in various federal agencies and are fully conversant in each of the federal laws that impact consumer lending operations, including the Bank Secrecy Act (BSA), Community Reinvestment Act (CRA), Dodd-Frank Wall Street Reform and Consumer Protection Act, Equal Credit Opportunity Act (ECOA), Electronic Funds Transfer Act (EFTA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Fair Housing Act (FHA), Flood Disaster Protection Act, Gramm-Leach-Bliley Act (GLBA), Home Mortgage Disclosure Act (HMDA), Home Ownership and Equity Protection Act (HOEPA), National Flood Insurance Protection Act, Real Estate Settlement Procedure Act (RESPA), Truth in Lending Act (TILA), USA PATRIOT Act and the US sanctions regime administered by the Office of Foreign Assets Control (OFAC).

Our lawyers are also experienced at counseling clients on federal preemption and related issues. We analyze policies and procedures for compliance with applicable federal and state laws, prepare industry comment letters on proposed regulations, conduct due diligence, conduct in-house training seminars and design and evaluate enterprise risk, due diligence and quality control systems. We also assist companies with the implementation of the latest federal and state laws and regulations.

In terms of complying with state law requirements, our practice comprises long-standing research and analytical capabilities with respect to mortgage banking, real property, money transmitter, payment systems, consumer protection and consumer finance laws in all 50 states and the District of Columbia.

Government Enforcement
The objective of regulatory compliance counseling is to assist clients in operating in accordance with legal obligations and regulatory guidance. We help clients avoid enforcement actions by educating them on federal and state regulatory requirements, performing due diligence and quality control reviews and working with lenders and servicers to address regulatory compliance concerns. We also provide practical advice on structuring policies, procedures and business processes designed to adhere to the relevant requirements.

In today’s aggressive enforcement environment, however, it is not always possible for any financial services provider to avoid critical examination findings or, in worse cases, a government enforcement action. In these unfortunate circumstances, we regularly represents banks, thrifts, mortgage lenders and servicers, auto lenders, student lenders, credit card issuers, prepaid card issuers and sellers and other providers of consumer financial services in defending themselves in supervisory enforcement actions and other governmental audits, investigations and proceedings. The breadth and depth of knowledge of federal and state regulatory requirements that we bring, coupled with our experience with how lenders, servicers and other consumer financial products providers operate within these requirements, enables us to communicate effectively with both regulators and our clients as we navigate complex enforcement matters.

Our clients also include lending and servicing institutions facing examinations, investigations, administrative proceedings and lawsuits initiated by the CFPB, Federal Reserve Board, Office of Thrift Supervision, FDIC, HUD, state banking authorities and/or state attorneys general. We also defend clients in DOJ investigations involving alleged False Claims Act violations and Federal Trade Commission investigations involving alleged violations of the Federal Trade Commission Act and other federal consumer credit laws. We handle FHA/VA/GNMA audits, examinations, administrative proceedings and Inspector General investigations.

As noted above, many of our lawyers are alumni of major US regulatory and enforcement authorities and regularly appear before the Board of Governors of the US Federal Reserve, the Department of the Treasury, the FDIC, OCC, SEC, the Commodities Futures Trading Commission, the Consumer Financial Protection Bureau (CFPB), the Financial Crimes Enforcement Network and the Office of Foreign Assets Control.

Fair Lending
Our fair lending representation to financial institutions throughout the United States comprises a wide array of issues, including class action defense, government enforcement, compliance monitoring and day-to-day compliance advice. We represent clients in investigations by the CFPB, the DOJ, the Federal Trade Commission, HUD, federal banking regulators, state attorneys general and state banking departments. As discussed below, we also regularly defend banking, mortgage lending and consumer financial services institutions in federal and state consumer class action litigation. In addition to federal and state antidiscrimination statutes, our fair lending team handles compliance with UDAP/UDAPP prohibitions, the Home Mortgage Disclosure Act, Community Reinvestment Act, anti-predatory lending laws and related requirements. Our depth of experience in fair lending enforcement, litigation and compliance, combined with our understanding of how lending institutions operate, enables us to provide effective advice that balances practical business considerations while minimizing risk.

Licensing and Approvals
For more than 20 years, our lawyers have helped clients engaged in mortgage lending and other consumer credit activities obtain and maintain state licenses and federal approvals. We routinely undertake nationwide licensing and renewal efforts involving all manner of professional licenses for consumer credit-related activities, including licenses to engage in mortgage lending, brokering or servicing, consumer lending and brokering, commercial mortgage and non-real-estate-secured commercial or business activities, collections, money services or money transmitter businesses, sales finance activities, and real estate broker activities. We also help companies obtain and maintain approvals from agencies such as HUD (to make FHA-insured mortgage loans), the Department of Veterans Affairs (to make VA-guaranteed mortgage loans), Fannie Mae or Freddie Mac (to act as seller/servicer) and Ginnie Mae (to act as an issuer or servicer). In many cases, such licensing projects are undertaken to facilitate stock or asset purchase transactions, complex reorganizations and restructurings, and public or private offerings.

Consumer Litigation and Class Action Defense
In collaboration with Mayer Brown’s leading Consumer Class Action litigation team, we have the capability to defend consumer class action claims on a nationwide basis. More than 40 lawyers in offices across the country and around the world have successfully defended consumer litigation and class actions in trial and appellate proceedings in federal and state court. Key competitive advantages of the firm’s consumer litigation and class action defense teams include its geographic reach, the scope and depth of its experience and its top-ranked Supreme Court & Appellate practice.

Our lawyers regularly defend banks, mortgage lenders, loan servicers and consumer financial services providers in federal and state consumer class action litigation throughout the country. These cases have included putative national classes and state and multi-state classes. Our lawyers have enjoyed a high degree of success on behalf of consumer financial services clients in the scores of punitive damages cases alleging fraud, breach of fiduciary duty, breach of contract and breach of implied duty of good faith and fair dealing. These cases have involved challenges to financial institutions under various federal consumer protection statutes such as TILA, FCRA, the Fair and Accurate Credit Transactions Act, ECOA, the Fair Debt Collection Practices Act (FDCPA), the Home Affordable Modification Program (HAMP), RESPA, EFTA, the Telephone Consumer Protection Act (TCPA), state consumer fraud and unfair or deceptive practices statutes (UDAP), the Servicemembers Civil Relief Act (SCRA) and state telephone recording and eavesdropping laws.

Our team has represented clients before the US Supreme Court and in federal and state courts throughout the United States, including in the capacity of national coordinating counsel. In several cases, appellate courts reversed and rendered judgment in favor of our clients. We have been involved as national or regional counsel in nearly all major consumer finance-related class action cases. Matters on which we have acted include multidistrict litigation involving debit card-related bank overdraft fees and practices, HAMP-related loan modification practices, foreclosure and credit reporting related practices, use of the Mortgage Electronic Registration System (MERS), interest rate and foreclosure related relief under the SCRA, FCRA “firm offer” prescreening and “adverse action” cases, yield spread premium and dealer reserve cases, third-party fee upcharge cases, RESPA “mortgage escrow” cases, and a number of individual and class action mortgage discrimination and unfair trade practices-related claims.

Prepaid Cards, Payment Systems and Electronic Delivery of Financial Products
We provide transactional, regulatory compliance and enforcement/litigation defense to a variety of parties involved in payment systems, including issuers and distributors of prepaid cards and other types of prepaid access devices, mobile payment providers and virtual currency issuers.

As the delivery of financial services becomes increasingly technological and less dependent on face-to-face interactions with customers, we are positioned to enable clients to navigate in such virtual environments while avoiding pitfalls that can result from engaging in jurisdictions without the proper licenses, on-boarding customers without appropriate due diligence, processing transactions with entities or into jurisdictions that present terrorist financing or sanctions compliance risk or providing transactional formats that can expose systems to hacking or data invasions. Our regulatory compliance practice includes lawyers who are experienced with all federal laws that relate to such situations, as well as the laws of all 50 states and the District of Columbia.

As needed, we can draw upon capabilities in Mayer Brown’s pioneering Cybersecurity & Data Privacy practice to develop strategies to prevent breaches but, more significantly, to help clients respond effectively when they happen. In addition, we can team with lawyers who have more than 20 years’ experience advising clients on the nuances of anti-money laundering, terrorist financing and sanctions compliance—issues that are essential for any payment-related business that entails cross-border transactions.

Public Policy
At times, the best way to have an impact in a business setting is to have a voice in the formulation of policies that shape the development of laws and regulations. Mayer Brown partners include former members of Congress, former Administration officials and senior staff to Congress and the Administration who intercede on behalf of clients with Congress and the Administration. Mayer Brown’s Government Relations lawyers and lobbyists use sophisticated political experience combined with the substantive legal knowledge of practitioners such as those in our Consumer Financial Services group, to advise businesses and governments on policy, legislation and regulation. Our capabilities are not limited to the federal sphere; we have deep experience advising on state and local government issues as well.

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