TAMPA, Fla — OneTouch Direct, a global business process outsourcing company, during its celebration of National Employee Appreciation Day, thanked its valued team members by hosting a fun filled day of special activities, featuring classic arcade games, catered food, employee recognition awards, and multi-level prizes. The highlight of the day, of the year, was the company’s NEW car giveaway. Two of OneTouch Direct’s top employees each won a brand-new car; after winning, they went to the dealer and picked out their car with all expenses paid by OneTouch Direct. Additionally, multiple eligible employees across our US centers were awarded their choice of a large screen TV, Grill, Kitchen Aid Stand Mixer, Laptop, and/or an iPhone with accessories.

“National Employee Appreciation Day is a time for all of us to show our sincere appreciation for the contributions made by our loyal employees,” said Chris Reed, EVP of OneTouch Direct. “We welcome this opportunity to thank all our employees for the excellence they bring to our company every day.” 

OneTouch Direct prides itself on creating a positive, collaborative work environment that actively promotes each person’s strengths and capabilities through strong leadership, opportunities for growth and development, and a good work/life balance. We actively recognize and support the unique value each employee brings to our company. Our people first philosophy creates a culture of everyday recognition within the organization, genuinely celebrating employees all year long.

About OneTouch Direct

OneTouch Direct, parent company for OTD Americas, its wholly owned subsidiary, is a US based business process outsourcing company delivering best-in-class customer experiences (CX) for some of the world’s largest and most loved brands. Rooted in our passion and deep expertise, OneTouch Direct creates unified brand experiences that break the rules and foster meaningful relationships. For over 20 years, our people-centric, data driven outsourcing solutions have powered better revenues and profitability across the full customer life cycle. For more information visit onetouchdirect.com.

On June 7, the FTC announced that it submitted its 2022 Annual Financial Acts Enforcement Report to the CFPB. The report covers FTC enforcement activities regarding the Truth in Lending Act (TILA), the Consumer Leasing Act (CLA), and the Electronic Fund Transfer Act (EFTA). Highlights of the enforcement matters covered in the report include, among other things:

• Automobile purchase and financing. The report discussed an April 2022 settlement with a car dealership group, which resolved claims that the dealership group added on unwanted fees to consumers and allegedly failed to include details on repayment and annual percentage rates in advertising mailers. The settlement led to a redress sent to consumers.

• Payday lending. The report highlighted a settlement reached with a payday lending enterprise for allegedly overcharging consumers millions of dollars. The FTC claimed the enterprise made deceptive statements about the terms of their loan agreements and payments and withdrew funds from consumers’ accounts without consent. The order resulted in consumers receiving refunds.

• Credit repair and debt relief. The report included a settlement with the operators of a student loan debt relief scheme, who were charged with “falsely promising consumers it could lower or eliminate student loan balances, illegally imposing upfront fees for credit repair services, and signing consumers up for high-interest loans to pay the fees without making required loan disclosures in violation of the FTC Act and TILA.” The order also resulted in consumers receiving refunds.

• Other credit. The report detailed the first case involving the Military Lending Act, where a jewelry company was charged with allegedly charging military families illegal financing and using deceptive sales practices. Specifically, the company was charged with deceptively claiming that financing jewelry through the company would increase the consumer’s credit score, misrepresenting that their protection plans were required, and adding plans without the consumer’s consent. The company was also charged with failing to provide clear terms for preauthorized electronic fund transfers. The settlement required the company to provide refunds, stop collecting debt, and cease operations and dissolve.

Additionally, the FTC addressed rulemaking that is underway. The agency highlighted an impending ban on junk fees and bait and switch advertising tactics, and briefly discussed two advance notices of proposed rulemaking issued last October that would crack down on junk fees and fake reviews and endorsements. The FTC also highlighted the Military Task Force’s work on consumer protection issues.

Protecting personal and financial information is critical in today’s digital age. Where data has its own intrinsic value and where data breaches and cyberattacks are a risk for every business, the Safeguards Rule under the Gramm-Leach-Bliley Act (GLBA) provides financial institutions, including those in the accounts receivable management industry, with guidance on how to safeguard customer information.

The existing Safeguards Rule provided financial institutions with much flexibility and discretion when determining what kinds of safeguards were best for their organizations and risks. With the amendments which go into effect on June 9, 2023 financial institutions now have a more prescriptive recipe for what those safeguards need to be.

What is the Gramm-Leach-Bliley Act (GLBA)?

The Gramm-Leach-Bliley Act, or GLBA, is a federal regulation to control how financial institutions collect, store, and transmit consumer information. Although GLBA was enacted by the Federal Trade Commission (FTC) in 1999, changes have been anticipated for the last few years.

In October 2021, the FTC announced new amendments coming to the Standards for Safeguarding Customer Information, known as the “Safeguards Rule,” and an issuance of a final rule, referred to simply as the “Final Rule.” Originally set to go into effect in 2022, financial institutions—a designation that has also been updated—now need to prepare for the changes or risk non-compliance and its consequences before they go into effect on June 9, 2023.

What is the Safeguards Rule?

The Safeguards Rule took effect January 10, 2021, and its requirements were first set to go into effect beginning December 9, 2022, but the FTC announced it would extend the deadline for financial institutions to develop, implement, and maintain a comprehensive information security program by June 9, 2023.

There are five overarching modifications to the existing Safeguards Rule:

• Provides covered financial institutions with more guidance on how to develop and implement specific aspects of an overall information security program

• Improves the accountability of these security programs, such as requiring financial institutions to designate a qualified individual responsible for overseeing, implementing and enforcing the program

• Exempts financial institutions that collect information on fewer than 5,000 consumers from the requirements of a written risk assessment, incident response plan, and annual reporting to the board of directors

• Expands the definition of “financial institution” within the scope of the Safeguards Rule – see the expanded definition in the next section below

• Includes several other definitions and related examples in the amended Safeguards Rule itself in an effort to make it more self-contained and to enable readers to understand its requirements without referencing the FTC’s Privacy of Consumer Financial Information Rule

Along with these updates to the Safeguards Rule, let’s examine a few other specifications of the updates.

What are other updates to the Safeguards Rule?

The expanded scope of financial institutions that are subject to the Safeguards Rule is significant. Under the new Final Rule, “financial institutions” now include entities engaged in activities that the Federal Reserve Board determines to be incidental to financial activities, such as:

It is important to note that the Final Rule does not apply to national banks, savings and loan institutions, and federal credit unions, as these institutions are not subject to the FTC’s jurisdiction.

The Final Rule requires these covered financial institutions to comply with specific new requirements, such as:

• Encrypt all customer information held or transmitted in transit over external networks and at rest

• Multi-factor authentication for any individual accessing any information system, unless the use of reasonably equivalent or more secure access controls has been approved in writing by a qualified individual at the financial institution

• Conduct periodic written risk assessments, and the results of such risk assessments should drive the information security program

• Create procedures for evaluating, assessing or testing the security of externally developed applications used to transmit, access or store customer information

• Set procedures for secure disposal of customer information no later than two years after the last date the information is used

• Implement policies, procedures, and controls designed to monitor and log the activity of authorized users and detect unauthorized access or use of, or tampering with, customer information by such users

• Provide personnel with security awareness training, and provide information security personnel with training to address relevant security risks; and that key information security personnel take steps to maintain knowledge of changing information security threats and countermeasures

• Written incident response plan designed to promptly respond and recover from any security event affecting the confidentiality, integrity, or availability of customer information

• Qualified individual to regularly, and at least annually, report in writing to an organization’s governing body (e.g., board of directors) regarding the status and material matters of the information security program

• Regularly test or otherwise monitor the effectiveness of the safeguards’ key controls, and conduct required penetration testing annually and vulnerability assessments at least every six months and whenever there are material operational or business changes

Given the expanded definition of “financial institutions,” some of these organizations may be unfamiliar with the extent of these requirements, and even those familiar with GLBA previously must be ready to comply or face the consequences.

What are the penalties for non-compliance with GLBA?

Whether it’s GLBA, Regulation F, or any of the numerous state laws, companies can face serious penalties for compliance failures—monetary, reputational, and even criminal. When it comes to GLBA, non-compliance penalties include:

Section 5 of GLBA grants the FTC the authority to audit policies to ensure they are developed and applied fairly—all the more reason to follow the Safeguards Rule’s provisions of self-audits and testing. 

As the evolution of Artificial Intelligence (“AI”) dominates headlines throughout the globe, financial institutions have been paying attention. Not surprisingly, so has the Consumer Financial Protection Bureau (“CFPB” or “Bureau”).  Just as financial sector companies feverishly ramp up their use of AI to complete, augment, and personalize customer service interactions, the CFPB is pumping the proverbial brakes.

On June 6, the Bureau published an Issue Spotlight (“Spotlight”) titled “Chatbots in Consumer Finance,” cautioning against the industry’s reliance on advanced chatbots, saying it can lead to violations of consumer finance laws, harm consumers by providing inaccurate information and diminish customer service. The Spotlight indicates that automated chatbots, especially those fueled by AI and related technology, will be a new area of focus for the CFPB, in terms of both supervision and enforcement.

The underlying technologies used in these customer-facing chatbots include large language models, AI, generative machine learning, neural networks, and natural language processing (NLP). These technologies enable chatbots to simulate human-like responses and automatically generate chat responses using text and voice.

The consumer finance industry has widely adopted chatbots as a cost-effective alternative to human customer service and continues to do so at a breakneck pace. According to the research conducted by the CFPB, approximately 37% of the U.S. population engaged with a bank’s chatbot last year, and CFPB indicates this number is projected to grow to 110.9 million users by 2026. The adoption of chatbots has not only resulted in significant cost savings for financial sector firms, but studies indicate that it has also improved consumer experiences. Therefore, the growth rate of chatbot adoption in the financial industry is expected to continue increasing exponentially.

The Spotlight, however, presents the agency’s pessimistic view surrounding the use of chatbots for providing customer service in the consumer finance industry. The Spotlight highlights several risks associated with the use of chatbots including: (1) Risk of noncompliance with federal consumer financial laws; (2) Risk of harming people; (3) Erosion of trust and deterrence from seeking help; and (4) Frustrating customers.

A critical question is how the Bureau came to this conclusion. Was it based on a scientific study, a focus group, or mere conjecture? The Spotlight claims to be based on a significant number of complaints filed by consumers on the CFPB’s complaint portal. However, a simple search of the complaint database reveals that, as of the date of this alert’s publication, there are only 64 total complaints that mention chatbots or artificial intelligence in searchable complaint narratives over the past five years. During the same time period, 50,341 complaints regarding poor customer service experiences (unrelated to chatbots) were filed with the Bureau. Hence, only 0.13% of the poor customer service complaints filed were in relation to bad experiences using a chatbot. If analyzed against the total number of complaints filed with the CFPB this number drops to a mere 0.0024%.

The CFPB’s report points to compliance issues with the use of chatbots in the consumer finance industry. The Spotlight suggests that chatbots have difficulty recognizing and resolving consumers’ disputes. Surprisingly, however, the Spotlight’s supporting evidence is actually based on a consumer’s experiences and frustrations while interacting with a human customer agent. For example, on page 10 of the Spotlight, CFPB presents a consumer complaint as evidence of “parroting” by chatbots. However, a review of the full narrative of the complaint indicates that a “human” agent, not a chatbot, was regurgitating the same information without resolving the consumer’s actual issues.

The Spotlight further argues that the use of chatbots can be problematic for consumers with limited English proficiency. However, human customer service agents can be more prone to language barriers but newer generations of chatbots, are known to support over 50 different languages, which go well beyond the capacity of a human brain.

Next, the Spotlight suggests that AI-powered chatbots pose significant security risks through impersonation and phishing scams. While the mass adoption of these generative AI technologies can certainly increase the frequency of phishing scams, these security risks are still mostly initiated by humans, and AI can also be programmed in a countervailing measure to push back on many types of data breaches. Further, a recent large-scale study from Hoxhunt documents that the scams initiated using chatbots were 69% less effective than those initiated by humans. Earlier this year, the CFPB itself experienced a significant security breach triggered by human error. It is worth considering that a properly trained AI system might have helped the CFPB avert this breach by blocking the transfer of unauthorized data to an external email. As highlighted by Hoxhunt’s study, the CFPB could and should focus on offering security training programs to consumers going forward.

Lastly, the Spotlight also suggests that chatbots lead consumers in “continuous loops of repetitive, unhelpful jargon or legalese without an offramp to a human customer service representative.” This “doom loop” according to the Spotlight, might lead to customer frustrations and dissatisfaction. However, the conclusions drawn by CFPB are seemingly unsubstantiated. By their own records discussed earlier, the CFPB highlights that 37% of the U.S. population is estimated to have interacted with a bank’s chatbot in 2022. If the CFPB’s account of user frustrations with chatbots is accurate, then over 98 million people have interacted with chatbots in the past year. This would certainly result in more than 64 complaints to CFPB. Further, on page 7 of the Spotlight, CFPB highlights that Bank of America’s chatbot, Erica, had been used by nearly 32 million customers with over 1 billion interactions in 4 years since its launch. Even with such a high volume, a simple search for complaints on CFPB’s complaint portal reveals only four bad customer service experiences related to artificial intelligence with Bank of America during the same four-year period.

Finally, it’s important to note that the CFPB itself has been using rule-based AI in its online complaint portal. Upon providing their personal information on the complaint portal, consumers are asked to select categories and subcategories before they are provided with a text editor to file their complaints. The organization of these complaints can only be done by rule-based AI. Additionally, the CFPB also uses rule-based chatbots to support their telephone-based customer service. The Bureau is therefore not immune from enjoying the benefits of automated communication. Perhaps the CFPB might even benefit from the use of more sophisticated models that further leverage AI, so as to avoid the risk of consumer frustration that could be escalated when only rule-based models (aged technology) are used.

The CFPB’s all-or-nothing approach is counter-productive at the early stage of the AI debate. Most consumer-facing companies have been instituting a hybrid approach to AI where the simple or programmatic consumer issues are handled by chatbots which frees up human customer agents’ time to deal with more complex issues. The CFPB makes no mention of the fact that many financial services entities and institutions are using AI to enhance compliance; what is sometimes called “AI for good.” It is essential to balance the need for innovation and progress with the need to protect consumers and ensure fair practices. Undoubtedly, AI is not immune from mistakes, and it certainly instills a tremendous fear of the unknown if it is not used in the right way. The task of protecting consumers requires an honest conversation of the good and bad that surrounds AI, along with a measured approach to the current outcomes and opportunities. Unrealistic hypotheticals may ultimately result in consumers losing out in the end. Striking the right balance is a complex challenge that regulators, companies, and consumer advocates must work together to solve – it will be worth the effort.

NEW YORK, NY — Skit.ai, a global conversational voice AI vendor for the Account Receivable Management (ARM) industry in the U.S., today announced that it has deployed its Augmented Voice Intelligence Platform within Empire Credit and Collections Inc., a leading Debt Collection Agency based in NYC, offering No Recovery and No Fee Debt Collections. This partnership enabled the agency to automate its outbound calls with conversational voice AI, accelerating revenue recovery and enhancing customer experience (CX).

As with any debt collection agency in this market, Empire Credit and Collections Inc. had critical concerns about its connectivity, agent productivity, and the projected impact of these issues on its collections rate. While uncovering innovative strategies and optimizing workforce inefficiencies, they sought to deploy Skit.ai’s conversational Voice AI to mitigate these concerns. Thus far, the solution has automated over 400,000 calls with an RPC of 35% and has achieved a key milestone of 63% engagement rate, which has contributed to optimizing the company’s Revenue Recovery, CX, and Agent Productivity in a short span.

“The influence of cutting-edge technologies like Skit.ai’s conversational Voice AI has been the determining factor in addressing critical concerns in a turbulent market like the one we face today; it enables us to remain competitive and capitalize on market opportunities. This collaboration has proved valuable; it has allowed us to connect with a large pool of customers simultaneously while mitigating redundant processes and improving our agent productivity. Additionally, the solution has accelerated our revenue recovery and enhanced our customer experience, proving to be a valuable investment.” stated Peter Roberto Jr, Director of Operations at Empire Credit and Collection Inc.

The deployment has brought about positive outcomes for Empire Credit and Collections Inc and its customers; it has facilitated an unprecedented automation that boosts agents’ efficiency while enabling a customer-centric approach to collections. It allows them to deliver actual business returns while identifying and planning for future risks and value drivers.

Commenting on the partnership’s success, Sourabh Gupta, Founder and CEO of Skit.ai, Stated. “Empire Credit and Collection Inc utilized our solution to its fullest potential in tackling issues related to connecting with delinquent customers and boosting agent productivity. By incorporating a powerful conversational Voice AI system, they accomplished an outstanding milestone of achieving a 63% engagement rate on over 400,000 calls. This groundbreaking approach improved their financial performance and elevated the overall customer experience, establishing a new standard of effectiveness.”

Schedule a meeting to learn more about how Skit.ai can help you accelerate revenue recovery with higher efficiency and infinite scale.

About Empire Credit and Collection Inc: 

Empire Collection Agency is the nation’s leading Debt Collection Agency offering No Recovery, No Fee Debt Collections! New York-based Empire Credit and Collections Inc collects delinquent accounts using its vast network of debt collection experts. Our personal collections experience and communications with other agencies and law firms convinced us there are better ways of collecting your debts faster and with a higher collection rate. https://empirecollectionagency.com

About Skit.ai: 

Skit.ai is the ARM industry’s leading Conversational Voice AI company, enabling collection agencies to streamline and accelerate revenue recovery. Skit.ai’s Compliant, Configurable, and Easy-to-deploy solution enable enterprises to automate nearly one million weekly consumer conversations. Skit.ai has been awarded several awards & recognitions, including Disruptive Technology of the Year 2022 by CCW, Stevie Bronze Winner 2022 by The International Business Awards, and Gold Globee CEO Awards 2022. Skit.ai is headquartered in New York City, NY.  https://Skit.ai

CHICAGO, Ill. — Markoff Law LLC, a Chicago based firm with over 40 years of experience in creditors’ rights and collection law, is proud to announce its recent donation to the Great Strides Cystic Fibrosis Foundation.

Steven Markoff, Managing Partner at Markoff Law, expressed his thoughts on the firm’s donation. “At Markoff Law, our mission extends beyond the courtroom. We believe in positively impacting our community and supporting causes that align with our values and are near and dear to members of our team. The stories of those battling Cystic Fibrosis are truly inspiring, and we are humbled to support the Great Strides Cystic Fibrosis Foundation in their mission to find a cure.”

Cystic fibrosis is a rare, genetic, life-shortening disease that affects more than 30,000 people in the United States and 70,000 worldwide. The Great Strides Cystic Fibrosis Foundation is instrumental in combating this disease, spearheading research, and offering hope to those affected.

About Great Strides Cystic Fibrosis Foundation

The Great Strides Cystic Fibrosis Foundation is the largest national fundraising event for cystic fibrosis, involving around 125,000 participants in nearly 300 walks across the country annually. The foundation is committed to curing cystic fibrosis and raising awareness about this life-altering genetic disease.

About Markoff Law LLC

Markoff Law, LLC is a forward-thinking firm with a history of experience and success representing creditors throughout the Midwest. Through the decades, Markoff Law has earned and maintained a reputation for excellence, honesty, and integrity. The firm’s thought leadership and adherence to industry best practices have established it as a leader within the accounts receivable management industry. Markoff Law is firmly committed to setting and achieving the highest standards of excellence.

A unanimous panel of the U.S. Court of Appeals for the Eleventh Circuit has affirmed the district court’s order dismissing several defendants as sanctions for the CFPB’s continuation of “obstructionist conduct” in depositions.

In CFPB v. Brown, the depositions in question were of a CFPB witness taken in the CFPB’s enforcement action against 18 defendants that alleged the defendants had engaged in or substantially assisted a fraudulent debt collection scheme in violation of the CFPA and the FDCPA.  The five defendants charged with providing substantial assistance were service providers to the defendants who were alleged to have directly engaged in the scheme.  One of the five defendants provided telephone broadcast services and the other four defendants provided payment processing services. 

The depositions were taken after the district court rejected the CFPB’s attempt to avoid providing a representative by moving for protective orders.  As described by the Eleventh Circuit, the transcript of the first deposition “reveals that the CFPB avoided answering questions through a number of impermissible tactics” that included:

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• “Lodg[ing] more than 70 work product objections, even objecting to fact-based questions that the district court had instructed it to answer;”

• Giving the CFPB’s witness “memory aids” from which the witness read verbatim for extended periods of time; and

• Taking the position, after the district court indicated in its ruling on the CFPB’s motion for protective orders that the defendants could ask about exculpatory facts, that the CFPB had not identified any exculpatory facts in the entire record.

After the defendants informed the district court of the CFPB’s conduct at the first deposition, the district court held a telephonic hearing during which the judge reiterated that the CFPB’s witness needed to answer fact-based questions and that the defendants had a right to question the CFPB about exculpatory facts.  The district court indicated that memory aids were acceptable due to the voluminous records but stated that “regurgitating pre-written information would be insufficient in many cases.” 

Nevertheless, as the Eleventh Circuit summarized the deposition transcripts, “the CFPB continued its obstructionist conduct during the next four depositions” despite the additional instructions from the district court.  The Eleventh Circuit described the CFPB’s conduct as follows:

“All in all, in each 30(b)(6) deposition, whether the CFPB’s tactic was to object at every turn, instruct its witness not to answer, refuse to acknowledge any exculpatory facts, or have its witness read extended and nonresponsive answers, the CFPB tried to game the system so that nothing was accomplished.”

Because of the CFPB’s repeated conduct, the defendants moved for sanctions pursuant to Rule 37 of the Federal Rules of Civil Procedure.  Rule 37(b) permits a district court to impose sanctions for a party’s failure to obey an order to provide or permit discovery and for the failure of a person designated as a witness to appear for his or her deposition.  The district court granted the defendants’ motion for sanctions, concluding that the CFPB had shown a “willful disregard” for its instructions and that the CFPB’s witness had “failed to appear” because even though physically present, “he was effectively unavailable due to his inability to answer questions without memory aids and refusal to address exculpatory evidence.”  Because it found the CFPB’s conduct to be “egregious,” the district court struck all of the CFPB’s claims against the five service providers and dismissed them from the case.

In reviewing the sanctions order, the Eleventh Circuit first concluded that the district court did not abuse its discretion in imposing Section 37(b) sanctions because the CFPB had repeatedly failed to obey the district court’s instructions.  It also concluded that the district court had not abused its discretion by imposing a sanction that was too severe.  In response to the CFPB’s argument that the dismissal was improper because the service providers were not prejudiced by the CFPB’s conduct, the Eleventh Circuit stated that “we staunchly disagree and believe the record (as reiterated throughout this opinion) speaks for itself in refuting this contention.”

DENVER, Colo. – Harvest Strategy Group, a leader in nationwide recovery management services, has proudly announced its substantial contribution to the recently concluded “I Heart Camp” event by Heart & Hand Center. This generous donation reflects Harvest’s unwavering commitment to empowering local communities and driving positive social impact.

The “I Heart Camp” event, which took place on Thursday, May 18, 2023, at the Woods Boss Brewing Company, was a resounding success. Attendees enjoyed an evening filled with live music, delectable food from local food trucks, and craft beer from Woods Boss, all while raising essential funds for Heart & Hand’s vital summer programs.

Heart & Hand Center, established in 2010 by Nikki Cady, has been a beacon of hope for youth in Northeast Denver, starting with structured afterschool programming for around thirty children and growing to support nearly 300 students across four programs and three sites.

Harvest Strategy Group’s generous donation stands as a testament to its dedication to achieving superior results, not just within the accounts receivable management industry, but also in enriching the communities it serves.

Brad McCurnin, President & CEO of Harvest Strategy Group, shared, “We firmly believe in the power of community and the immense potential of our youth. Our support for Heart & Hand, particularly the ‘I Heart Camp’ event, is rooted in our mission to create opportunities and offer a better future for them. We were honored to be part of such a successful event, and we look forward to contributing to many more in the future.”

Harvest Strategy Group is delighted to have participated in the successful “I Heart Camp” event and extends its hearty congratulations to the Heart & Hand Center for creating an unforgettable evening that united the community in support of local youth.

About Harvest Strategy Group, Inc.

Harvest Strategy Group provides single-point-of-contact, nationwide recovery management services for banks, finance companies, debt buyers, and credit unions. The company fosters an entrepreneurial environment and encourages its staff to challenge boundaries, think outside the box, and feel a sense of ownership and accountability for results. Harvest’s mission is to lead the accounts receivable management industry through strength in partnerships, exceptional service, and the delivery of superior results. If you wish to join our team, apply to Harvest Strategy Group online.

The Consumer Financial Protection Bureau (CFPB or Bureau) has signaled that it intends to propose a rule that would allow it to exercise supervisory authority over a greater number of nonbank financial companies that participate in the consumer payments market.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), the CFPB has authority to examine “larger participants” in various consumer financial products and services markets that the Bureau designates by rule — past examples include consumer reporting, debt collection, student loan servicing, international remittances, and auto finance. The CFPB’s proposed rule would “further the scope” of the CFPB’s supervision over the consumer payments market to include nonbank larger participants.

The agenda states that a notice of proposed rulemaking is expected in July 2023.

This proposal represents the culmination of the CFPB’s attempts to regulate the payments industry that started around the time that Rohit Chopra took over as the Director of the CFPB. In October 2021, the CFPB issued orders to collect information on the business practices of large technology companies operating payments systems in the United States. At the time, the CFPB said that it needed the information to “better understand how these firms use personal payments data and manage data access to users so the Bureau can ensure adequate consumer protection.” More recently, Director Chopra and members of Congress discussed possible amendments to Regulation E to remove barriers that prevent consumers from recovering money from banks and payments companies when bad actors fraudulently induce consumers into sending money to the bad actors through peer-to-peer apps. Although payments companies are already required to comply with state and federal laws, CFPB supervisory examinations will be a new experience if the CFPB follows through with the proposed rule.

We also note that this forthcoming larger participant rules comes at a time where the CFPB seems to be using its supervisory authority in a more expansive way than in the past. Numerous nonbanks have received information requests from the CFPB recently, inquiring about whether they are larger participants in markets already subject to CFPB jurisdiction, which suggests that the Bureau intends to begin performing examinations of more companies in those markets. Further, the Bureau has notified a number of nonbanks that they are being considered for supervision under the “risks to consumers” provision in Dodd-Frank, which the Bureau announced that it planned to use more extensively in 2022. Supervision has become an even more active venue for the Bureau to advance its policy objectives, and now it appears that the CFPB intends to bring this authority to bear on the payments industry.

ALBANY, N.Y. — McGlinchey Stafford is pleased to announce that Zir-Wei “Wendy” Lin has joined the firm’s Consumer Financial Services Compliance practice group in Albany, New York as legislative and regulatory developments attorney. Wendy works with McGlinchey’s compliance attorneys to track and report on updates in the various state and federal regulatory and legislative landscapes that may impact financial services clients.

“We are pleased to welcome Wendy to the McGlinchey team,” said Mark Edelman, chair of McGlinchey’s national Financial Institutions Compliance practice group. “Our team’s timely, effective counsel is rooted in up-to-date knowledge of what’s happening in legislatures and regulatory agencies around the country. Applying Wendy’s compliance analysis to those developments in real time will equip us to deliver excellent advice to our clients.”

Prior to joining McGlinchey, Wendy served as a legal compliance consultant for a large technology company based in Taiwan. She focused on tracking federal, state, and local legislation and regulations for the company’s global subsidiaries, monitoring developments in the areas of corporate, employment, and privacy laws in California, Delaware, Texas, and Vermont as well as Japan and Germany. She also served as a corporate attorney for a computer manufacturer, managing trademark licensing in Pacific Asia, Europe, and the United States.

“Wendy’s experience with a wide variety of regulatory regimes will benefit our clients tremendously,” said Jeffrey Barringer, Managing Member of the Albany office. “We look forward to adding her business and legal skills to our practice.” McGlinchey has 12 attorneys practicing in its Albany and New York City offices, and a total of 15 attorneys licensed to practice in New York.

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Wendy received her S.J.D. from Golden Gate University School of Law in San Francisco and her LL.M. in Intellectual Property Law and Policy from the School of Law at the University of Washington. She hold an MBA from the National Cheng Chi University, Institute of Intellectual Property, in Taipei, where she also earned two undergraduates degrees in Law and Political Science.

Wendy’s hiring continues the expansion of McGlinchey’s nationwide Financial Institutions Compliance team, which has welcomed 8 new attorneys in 2022 and 2023. This team comprises more than 50 financial services regulatory attorneys and licensing professionals who advise clients on the full universe of regulatory compliance concerns.

With a “nationwide” ranking in the 2023 Chambers USA guide, the team represents banks, finance companies, online lenders, credit companies, FinTechs, payment processors, and representatives of the education, automotive, and mortgage finance industries. McGlinchey’s compliance team offers industry-leading knowledge spanning 50 states and federal regulatory regimes, from compliance advice to representing clients during inquiries, examinations, and investigations.

About McGlinchey

McGlinchey Stafford is a premier midsized business law firm offering services in nearly 30 practice areas through a highly integrated national platform. McGlinchey attorneys leverage bold innovation, diverse talent, and leading-edge technology across our powerful network to serve clients at the local, regional, and national level. With 150 attorneys licensed in 32 states, McGlinchey operates from 17 offices nationwide. The firm currently has 23 attorneys and 9 practice areas recognized in Chambers U.S.A. 2023 and Chambers FinTech 2023, 53 attorneys recognized by Best Lawyers, 40 attorneys recognized in various Super Lawyers rankings, 49 practice areas recognized by Best Law Firms, and was named a “Top Performer” by the Leadership Council for Legal Diversity (LCLD) since 2018. To learn more, visit www.mcglinchey.com.