Short video featuring Gregory Jacob Gregory F. Jacob December 08, 2016
Is the consolidation of financial regulation oversight into one unelected official constitutional? Gregory Jacob, Partner at O’Melveny & Myers, LLP, gives a history of the establishment of the Consumer Financial Protection Bureau (CFPB) as a response to the financial crisis of 2008 and discusses a recent decision by the D.C. Circuit regarding the agency's structure. Financial Services & E-Commerce Practice Group Podcast
Members of the Federalist Society’s Financial Services & E-Commerce Practice Group Executive Committee will provide an update on recent important activity at the Consumer Financial Protection Bureau (CFPB). The wide-ranging discussion will cover the CFPB’s payday loan rulemaking, civil penalty fund, consumer complaint database, management challenges, and the bureau’s views on student loans. Another important topic will be the U.S. Court of Appeals for the District of Columbia’s recent ruling in PHH Corporation, et. al., v. CFPB, that the CFPB's structure is unconstitutional.
Litigation Practice Group Podcast
- Hon. Wayne A. Abernathy, Executive VP for Financial Institutions Policy and Regulatory Affairs, American Bankers Association
- Julius L. Loeser, Of Counsel, Winston & Strawn LLP
In April, the mortgage lender PHH Corporation challenged the constitutionality of the Consumer Financial Protection Bureau (CFPB) after being ordered by the CFPB to disgorge $109 million. PHH challenged the bureau’s legitimacy under Article II, and cited Free Enterprise Fund v. Public Company Accounting Oversight Board as relevant precedent, because PCA officers could be removed for cause, and then, only by officers of the SEC. Meanwhile, the CFPB cited Humphrey’s Executor v. United States, in which the Supreme Court upheld the constitutionality of the Federal Trade Commission Act, which allowed the president to remove an FTC commissioner only for cause. Professor Peter Conti-Brown of The Wharton School and Gregory Jacob, partner at O'Melveny & Myers LLP joined us to discuss the CFPB and the constitutionality of other independent agencies like it.
Litigation Practice Group Podcast
- Mr. Peter Conti-Brown, Assistant Professor of Legal Studies and Business Ethics, The Wharton School
- Mr. Gregory F. Jacob, Gregory F. Jacob Partner, O'Melveny & Myers LLP
The Federal Arbitration Act (FAA), passed in 1925, generally requires courts to look favorably upon all arbitration agreements. In 2011, the Supreme Court upheld an arbitration agreement in a contract for mobile phone services that contained a class action ban. The court ruled that a state law that prevented the class action ban from being enforced was “an obstacle to the accomplishment of the FAA’s objectives.”
However, Congress passed the Dodd-Frank Act in 2010, which authorizes the Consumer Financial Protection Bureau (CFPB) to study arbitration agreements in consumer contracts and limit or prohibit them if doing so would be in the public interest and for the protection of consumers. In May 2016, the CFPB issued a proposed rule that would ban arbitration agreements that acted to prevent class action lawsuits and would further establish certain reporting requirements for other arbitrations that are filed between consumers and providers.
Our experts discussed this proposed rule, including the history that led us to this point and the potential impact it will have if it is finalized.
Financial Services & E-Commerce Practice Group Podcast
- Prof. Jason Johnston, Henry L. and Grace Doherty Charitable Foundation Professor of Law, University of Virginia School of Law
- Thaddeus King, Officer, Consumer Banking,The Pew Charitable Trusts
On April 6, 2016, the Department of Labor released its much-anticipated “fiduciary” rulemaking, which will greatly expand the universe of entities and persons who will be deemed fiduciaries with respect to retirement plans and accounts. The rulemaking has garnered significant interest from members of Congress, federal and state regulators, FINRA, the financial services industry and investor advocates, among others. Our experts discussed the new rules, and their history and purpose. They also explored several of the key policy issues and controversies associated with the rulemaking.
- Jeffrey T. Dinwoodie, Associate, Davis Polk & Wardwell LLP
- Hon. Annette L. Nazareth, Partner, Davis Polk & Wardwell LLP