Firm News

On January 16th, Mastercard announced new rules for merchants and acquirers of merchants that engage in negative option billing, including specific rules for credit card billing in connection with trial offers…Read More

The rise of cryptocurrencies has created a new method to raise capital, the initial coin offering (“ICO”). An ICO is a process used mainly by private tech startups from the digital sector, where a company creates a new virtual coin or token (“coin”) and offers it for public sale. ICOs are raising amounts of money comparable to the amount of money raised by venture capital fundraising. In the third quarter of 2017, ICOs reportedly raised $1.32 billion and early-stage tech companies using venture capital fundraising raised $1.41 billion. ICOs are on pace to…
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On Deck, Kabbage and CAN Capital have formed the Innovative Lending Platform Association (ILPA). The ILPA along with the Association for Enterprise Opportunity (AEO) are launching a pricing comparison tools initiative. The AEO is a national membership organization that creates economic opportunities for underserved entrepreneurs. Read More

On May 10, 2016, the United States Department of the Treasury issued a white paper that provides (i) an overview of the online marketplace lending industry, (ii) a summary of the responses that the Treasury received to its 2015 Request for Information on the
industry (RFI), (iii) policy recommendations for private sector participants and the federal government and (iv) identification of
trends that the Treasury believes require ongoing observation. Read More

The Federal Reserve Bank of Cleveland released on August 25, 2015 a report entitled “Alternative Lending through the Eyes of ‘Mom & Pop’ Small- Business Owners: Findings from Online Focus Groups” (attached). The report provides the results on a study of small business owners’ perceptions and understandings with respect to online alternative lenders and cash advance providers and their small dollar credit products. Read More

The Consumer Financial Protection Bureau (“CFPB”), Chase Bank, USA N.A. and its subsidiary Chase BankCard Services, Inc. (collectively “Chase”), recently entered into a Consent Order for alleged violations by Chase of Sections 1036(a)(1) and (a)(3) of the Consumer Financial Protection Act, 12 U.S.C. §§ 5536(a)(1) and (a)(3) (“CFPA”), with respect to Chase’s debt sale and collection
practices. Read More

The New York Department of Financial Services (NY-DFS) has issued a proposed regulatory framework for virtual currencies. The proposed regulations will require virtual currency companies to obtain licenses named “BitLicenses.” By releasing the proposed “BitLicense” rules, New York became the first state to propose a regulatory structure specifically designed for virtual currencies. This Alert is first in a series on virtual currency regulation…
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On December 10th, the Consumer Financial Protection Bureau (CFPB) entered into a consent order with CareCredit LLC. CareCredit agreed to refund up to $34.1 million to borrowers who were allegedly subject to deceptive credit card enrollment practices.

Prompted by consumer complaints, the CFPB’s investigation focused on enrollment practices at health care providers’ offices for deferred interest credit card plans. The CFPB allegedly found incidences where health care providers: (i) orally misrepresented that the plan has no interest for 12 months as distinct from a deferred interest promotion, (ii) did not provide consumers with copies of the credit agreement or Truth in Lending Act (TILA) disclosures, (iii) failed to disclose the interest rate on the plan once the promotional period expired and (iv) finished incomplete applications and submitted them on behalf of borrowers. The CFPB also noted the lender’s limited involvement in the credit card enrollment process and the lack of training provided to health care providers, many of whom did not understand deferred interest credit cards.
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JPMorgan Chase Bank, N.A. and certain affiliates (“Chase”) entered into orders with the Office of the Comptroller of the Currency (“OCC”) and Consumer Financial Protection Bureau (“CFPB”) for alleged unfair billing of certain add-on identity theft products, which included credit monitoring and credit report retrieval, and unsafe and unsound practices in connection with the bank’s non-home loan debt collection litigation practices and non-home loan compliance with the Servicemembers Civil Relief Act (“SCRA”). Read More

The Federal Trade Commission recently released .COM DISCLOSURES, HOW TO MAKE EFFECTIVE DISCLOSURES IN DIGITAL ADVERTISING, updating its 2000 staff guidance DOT COM DISCLOSURES. The FTC has authority to enforce general consumer protection laws that prevent advertisements from being deceptive, unfair or otherwise in violation of FTC rules and to require disclosures to be presented clearly and conspicuously. According to the FTC, whether a disclosure meets this standard is measured by performance — that is, how consumers actually perceive and understand the disclosure in the context of the entire ad… Read More