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Clarks' Bank Deposits and Payments Monthly

  • February 04, 2021

    CFPB Debt Collection Practices Rule Part II Finalized Creating Challenges For Bankers And Debt Collectors

    In the waning days of the Trump Administration, the Consumer Financial Protection Bureau fulfilled its promise to address the holes left in its first set of rulemaking amending the federal debt collection rule known as Regulation F. The finalizing amendments are now complete, making it possible to gain some preliminary perspective on the 2020 revised regulation in its entirety.

  • February 04, 2021

    New Round Of PPP: Recent Legislative, Regulatory, And Judicial Developments

    The end of 2020 and start of 2021 have been marked by a new round of Paycheck Protection Program legislation and updated regulations, as well as a number of decisions from the courts concerning PPP issues—all of which hopefully provides additional clarity for a program in which clarity has often been sorely lacking.

  • February 02, 2021

    Justice Barrett’s Seventh Circuit Decision On Standing Signals Trouble For Consumers

    Newly minted Supreme Court Justice Amy Coney Barrett authored a significant decision while serving as an appellate judge on the Seventh Circuit. The decision is directly relevant to the financial services industry and consumers. The holding of the case allowed federal standing requirements to close the gateway to federal jurisdiction in a class action lawsuit brought under a consumer protection statute.

  • January 08, 2021

    Sedona Conference Commentary On A Reasonable Security Test: In Synch With Financial Institution Regulation?

    Early in this millennium, the Sedona Conference earned a reputation for providing helpful, workable guidance for emerging and overlooked or underserved areas of the law, particularly e-discovery. Via a series of think-tank-style working groups focused on discrete legal issues, the Sedona Conference tries to create “practical solutions and recommendations” which are then “developed and enhanced through a substantive peer-review process” and ultimately “widely published in conjunction with educational programs for the bench and bar, so that it can swiftly drive the reasoned and just advancement of law and policy in the areas under study.” Many judicial decisions—especially from the district courts that must effectively, efficiently, and justly administer the law and civil rules—rely upon and even praise the principles developed by the Sedona Conference, whose mission “is to move the law forward in a reasoned and just way through the creation and publication of nonpartisan consensus commentaries and through advanced legal education for the bench and bar.”

  • January 08, 2021

    New PPP $2M Loan Necessity Questionnaire Strays From Cares Act

    The banking industry entered the coronavirus pandemic in a position of relative strength—far stronger than it was before the Great Recession. As a result, everyone from bank customers to the federal government has looked to banks to help them weather the COIVD-19 storm. In particular, the CARES Act and its Paycheck Protection Program (“PPP”) created a structure that used banks as conduits for quickly distributing hundreds of billions of dollars of loans to businesses in the hopes that those businesses could continue to pay employees, mortgages and leases, and utilities and thus remain in business.

  • December 18, 2020

    Biden Administration Likely To Revisit New Trump CFPB Debt Collection Rule

    A favorite guessing game before the Biden administration takes charge is prognostication. The fate of agency rulemaking promulgated by the Trump administration in the area of consumer protection is a hot topic. The Consumer Financial Protection Bureau (CFPB or Bureau) recently released the first of two final rules on debt collection practices (Final Rule). Under a new Bureau head chosen by the Biden team, there is a good chance the CFPB’s rulemaking on debt collection practices is going to be revisited.

  • December 18, 2020

    Texas Federal Court Stay Lifted: CFPB Defends Gutted Payday Lending Final Rule While Pandemic Heightens Need For Small Dollar Loans

    After years of regulatory juggling, in July 2020 the Consumer Financial Protection Bureau (CFPB) released its so-called “Final Payday Lending Rule,” revoking the mandatory Underwriting Provisions of the 2017 Final Rule. The CFPB’s revocation of the Underwriting Provisions represents an enormous win for the small dollar lending industry. The latest iteration of the Final Rule leaves the Payment Provisions intact. Long overshadowed by the controversy over the Underwriting Provisions, the Payment Provisions are now the center of attention although the Underwriting Provisions may be resurrected when the new Biden Administration takes control of the CFPB.

  • December 07, 2020

    Only In New York: Depositary Banks Escape Liability From Conversion Claims Based On Forged Indorsements

    Only in New York is the rule insulating a depositary bank from a direct conversion claim still good law. The rule is based on an old version of the UCC. A provision found in the Revised UCC, adopted by all the other states, completely overturns the old Code’s barrier. A recent ruling on a motion to dismiss by a New York federal district court illustrates the glaring anomaly.

  • December 07, 2020

    COVID 19: SBA Revises PPP $50,000 Loan Forgiveness Rules But Confusion Continues To Delay Processing Of Applications

    Confusion continues to swirl around PPP loan forgiveness for lenders and borrowers. Lenders are holding back on processing loan forgiveness applications. Small businesses continue to be adversely affected by the pandemic. For small businesses, the need for economic assistance ostensibly coming from loan forgiveness is dire.

  • October 06, 2020

    The Fed Approves Development Of Fednow, Long Overdue "Instant" Payments Settlement Service

    [NOTE: BARBARA CLARK, CO-AUTHOR OF THIS NEWSLETTER, SERVED AS A MEMBER OF THE FASTER PAYMENTS TASK FORCE.]

  • October 06, 2020

    Email Check And Wire Fraud Scams: Lessons Learned From A Law Firm's Hasty Handling Of Its IOLTA

    In a recent decision, a Massachusetts court ordered a law firm to reimburse its bank over $337,400 after falling victim to a check and wire fraud scam perpetrated by email. The decision highlights the importance of "knowing your client" before distributing funds from a client trust account.

  • October 06, 2020

    Bank Of America Dodges Nationwide Class Action Lawsuit When Its Customer Overdraws Deposit Account Using Merchant-Issued Debit Card

    There is a big difference between a so-called "linked" debit card issued by a bank to an account holder and a so-called "decoupled" debit card issued by a merchant to its retail customer. Many consumers carry both in their wallets and use the cards interchangeably.

  • September 15, 2020

    The Risky Race To Set Off Against Wire Transfers: When Common Law Fills The Gap Under UCC Article 4A

    Article 4A of the Uniform Commercial Code (UCC) does not always occupy the field of loss allocation for wire transfers. When the race to set off is in trouble, common law causes of action such as unjust enrichment, fraud, and conversion may come into play as well. A federal district court order dated March 20, 2020, denying a motion for a judgment on the pleadings, illustrates this point.

  • September 15, 2020

    NACHA Releases Informal Guidance For $100,000 Same-Day ACH Per-Transaction Limit

    The first 100 days are over since Nacha's rule quadrupling the Same Day ACH per transaction entry limit from $25,000 to $100,000 became effective. In keeping with its role as overseer of the ACH network's operating rules and standards, on July 9, 2020, Nacha released "informal" guidance "interpreting" the large-dollar Same Day ACH entry limit. The guidance focuses on evasion.

  • September 15, 2020

    Adverse Claim Statutes Are Often Forgotten By Depositary Banks Facing Third-Party Fraud Claims But Can Be A First Line Of Defense

    Depositary banks are often caught between a rock and a hard place when faced with an adverse claim from a third-party fraud victim. Developments in litigation before the California federal court illustrate how adverse claim statutes afford depositary banks a first line of defense, but are often ignored.

  • August 19, 2020

    How Far Will Supreme Court Decision Finding CFPB Structure Unconstitutional Reverberate?

    Since the Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) in 2008, a shadow has hung over the agency. Dodd-Frank implemented a unique structure for the CFPB consisting of a single director insulated from the executive power of the President because he or she is only removable "for cause." CFPB's critics attacked this single-director structure as unconstitutional. Under the separation of powers doctrine, they argued, the President must retain the unconditional power to remove the director as a matter of discretion, or "at will." For its detractors, disbanding the CFPB became their mission. Under that scenario, the unconstitutional for-cause removal rule for the agency's director would render the whole agency illegitimate.

  • August 19, 2020

    Is Dodd-Frank UDAAP Becoming UDAP?

    The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act introduced a consumer protection regime that broadly prohibits unfair, deceptive, and abusive acts by financial institutions and other covered entities or persons in connection with consumer transactions regarding financial products or services. While earlier UDAP statutes, such as Section 5(a) of the FTC Act, prohibit unfair and deceptive acts and practices, Dodd-Frank added the "abusive" piece. In the years since the enactment of Dodd-Frank, the Consumer Financial Protection Bureau, which administers Dodd-Frank UDAAP, has struggled to define what constitutes "abusive" behavior and to differentiate abusive acts from unfair or deceptive acts.

  • August 19, 2020

    FDIC Releases Interest Rate Transfer Rule For State-Chartered Banks And Insured Branches Of Foreign Banks

    The Federal Deposit Insurance Corporation (FDIC) recently issued its Final Rule on the permissibility of interest rate transfers. The Final Rule is the companion rule to the Office of the Comptroller of the Currency's (OCC) rulemaking released a few days earlier. The FDIC's Final Rule is intended to clarify "the law that governs the interest rates State-charted banks and insured branches of foreign banks … may charge."

  • July 20, 2020

    E-Signatures: A Primer For Navigating During COVID-19

    Due to the restrictions on social distancing created by the Coronavirus pandemic, the days when closings on big financial deals occurred in person around the board room table seem to be gone, at least until the spread of COVID-19 is arrested. The customary handshake and pat-on-the-back are no longer socially acceptable. E-signatures are becoming more common than wet ones.

  • July 20, 2020

    Closer Look: OCC Final Rule Reacts To The Problematic Madden Decision On Interest Rate Transfers

    As his first major policy initiative, on the day he assumed office, acting Comptroller of the Currency Brian Brooks spearheaded the release of the OCC’s final rulemaking on permissible interest rate transfers. The Final Rule is intended to offer comfort to national banks and federal savings associations relying on the “valid-when-made” common law principle, which protects the interest rate on a loan after the loan is transferred.