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Dreher Tomkies LLP
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2750 Huntington Center
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Columbus, Ohio 43215
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OCC ISSUES GUIDANCE ON UNFAIR OR DECEPTIVE ACTS OR PRACTICES

by Michael C. Tomkies and Margaret M. Stolar*

In response to a number of suits and enforcement actions within the last two years, the Office of the Comptroller of the Currency has issued an advisory letter to inform national banks about the risks in engaging in lending and marketing practices that may constitute unfair or deceptive acts or practices and to help national banks avoid penalties, judgments and reputational harm that can result from such practices. The advisory:

  • Describes applicable legal standards the OCC uses to evaluate whether acts or practices violate applicable law prohibiting unfair or deceptive acts or practices;

  • Provides general guidance on types of activities examiners should scrutinize;

  • Describes other laws that may be implicated in connection with a review for unfair or deceptive acts or practices; and

  • Provides guidance on how banks can prevent reputation, compliance, and legal risks posed by certain practices.

This guidance, while directed to national banks, provides general information on “best practices” under laws applicable to a wide range of financial services providers in an area receiving increased scrutiny from regulators, attorneys general and consumer advocates. The OCC has also published a speech by OCC First Senior Deputy Comptroller and Chief Counsel Julie L. Williams, in which she remarked that this advisory letter should help national banks ensure that their marketing operations comply with Section 5 of the Federal Trade Commission Act and other relevant statutes. The OCC’s authority to enforce the FTC Act has been questioned recently in two rulings by the Rhode Island Superior Court and in cases before the United States District Court for the Eastern District of Pennsylvania and the United States District Court in Minnesota. Nonetheless, the OCC has asserted its intent to pursue unfair and deceptive acts and practices broadly and not limit itself to the enforcement of regulations issued by the Federal Reserve Board under authority of the FTC Act. In a related development, Representative John LaFalce has contacted Chairman Alan Greenspan by letter to urge that the Federal Reserve Board issue new regulations addressing issues like those identified by the OCC in the Advisory Letter.

If we can be of any assistance in the review of marketing materials, programs or initiatives or in the development of compliance strategies involving these and other issues or if you would like copies of any of the documents mentioned above, please do not hesitate to call us.

* Mike is a partner Margaret are attorneys with Dreher Tomkies LLP. All are contributors to the Firm’s Marketing and Privacy Digest. They can be reached at (614) 628-8000.