On May 26, the Consumer Financial Protection Bureau (the Bureau or CFPB) issued its third Circular, emphasizing that creditors must adhere to the Equal Credit Opportunity Act (ECOA) and Regulation B, even when they employ complex algorithms, sometimes referred to as uninterpretable or “black-box” models, to render credit decisions. The Circular explains that companies must provide an applicant with the precise reasons for the denial of a credit application or adverse action, even if the creditor company uses complex credit algorithm models that do not allow even the creditor itself to “accurately identify the specific reasons for denying credit or taking other adverse actions.”
On May 31, former Hillary Clinton campaign attorney Michael Sussmann was found not guilty in connection with his provision of information to the Federal Bureau of Investigation. Sussman’s acquittal provides insight into the applicability of a favored prosecution tool, 18 U.S.C. § 1001(a)(2) (“Section 1001”), which prohibits “knowingly and willfully . . . mak[ing] any materially false, fictitious, or fraudulent statement or representation” in a government investigation. The jury rejected the prosecution’s effort to apply Section 1001 to a source voluntarily providing a tip to the FBI, even in a politically charged context.
In an April 21 speech, U.S. Assistant Attorney General Jonathan Kanter highlighted his five policy initiatives for reinvigorating enforcement of U.S. antitrust laws. Kanter’s five initiatives included focusing on protecting competition, adapting current antitrust laws to reflect market realities, and reviving the enforcement of Section 2 of the Sherman Act. Kanter also stated that under his tenure the Antitrust Division will litigate cases to a decision in order to develop the law to match his other enforcement initiatives.
On May 12, 2022, Gov. Ron DeSantis signed bill CS/HB 273 (the Bill), amending Florida’s money services business (MSB) laws (i.e., Chapter 560 of the Florida Statutes) to, among other things, define “virtual currency” and address transactions involving “virtual currency.” The amendments to the Florida MSB laws take effect Jan. 1, 2023.
Accuracy in contractor proposal representations and cybersecurity compliance remains pressing, as demonstrated by an April 2021 settlement under the False Claims Act (FCA). In a previous alert, we noted that contractor representations of cybersecurity compliance/capabilities represent a fertile ground for bid protests. In this GT Alert, we highlight how the Department of Justice (DOJ) Cyber Fraud Initiative and qui tam actions under the FCA represent significant enforcement mechanisms that raise the stakes for non-compliance with evolving cybersecurity requirements applicable to contractors and grant recipients.
On May 19, 2022, the Department of Justice announced it would not charge good-faith hackers who expose weaknesses in computer systems with violating the Computer Fraud and Abuse Act (CFAA or Act), 18 U.S.C. § 1030. Congress enacted the CFAA in 1986 to promote computer privacy and cybersecurity and amended the Act several times, most recently in 2008. However, the evolving cybersecurity landscape has left courts and commentators troubled by potential applications of the CFAA to circumstances unrelated to the CFAA’s original purpose, including prosecution of so-called “white hat” hackers. The new charging policy, which became effective immediately, seeks to advance the CFAA’s original purpose by clarifying when and how federal prosecutors are authorized to bring charges under the Act.
On May 19, 2022, the Consumer Financial Protection Bureau (CFPB or Bureau) issued an interpretive rule (Section 1042 Interpretive Rule 5 19 2022) confirming that the Consumer Financial Protection Act of 2010 (CFPA) provides states with wide-ranging powers—independent of the Bureau—to enforce federal consumer protection laws.
The Consumer Financial Protection Bureau (CFPB or the Bureau) announced it would begin issuing Consumer Financial Protection Circulars (Circulars) to a “broad set of government agencies responsible for enforcing federal consumer financial law.” Director Rohit Chopra explained in a May 16, 2022, blog post that while the CFPB is the “principal regulator responsible for administering the federal consumer financial laws,” it is not the only agency tasked with enforcement. By issuing Circulars, the CFPB hopes to align enforcement across various regulators, ensuring consistency.
On May 16, 2022, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a report regarding COVID-19 response metrics based upon its “observations from data obtained by 16 large mortgage servicers” from May through December 2021 (Report). This report is a follow-up to an August 2021 report regarding the Bureau’s observations from data obtained from December 2020 through April 2021 (Reporting Period).
In yet another “sue and settle” case, the U.S. Environmental Protection Agency has proposed entering into a consent decree agreeing to rule on the Center for Biological Diversity’s (CBD) petition to classify discarded polyvinyl chloride (PVC) as a hazardous waste under the Resource Conservation and Recovery Act (RCRA). Part of a broader initiative to decrease the volume of plastic waste, this may result in a rule classifying a wide range of PVC-containing industrial, commercial, and retail materials and products as hazardous wastes when discarded.
The National Labor Relations Board (NLRB) General Counsel’s office issued a memorandum reiterating the rights of immigrant workers under the National Labor Relations Act (NLRA). Continuing its aggressive approach to expanding legal protections for workers and labor unions, the General Counsel’s office of the NLRB issued Memorandum OM 22-09, reiterating NLRB policy on workers’ rights to access the NLRB collective bargaining and remedial procedures regardless of immigration status, without fear of reprisals from their employers or the federal government.
Effective January 1, 2023, Washington employers with at least 15 employees must affirmatively disclose the wage scale or salary range and a general description of all benefits and other compensation being offered when posting job openings, regardless of whether such information is requested by the applicant.
While the United States awaits the Supreme Court’s ruling in Dobbs v. Jackson, which may overturn Roe v. Wade and eliminate the federal standard for abortion access, some states are considering setting their own standards that would ban or protect the medical procedure.
As volatility in the cryptocurrency market has increased, regulators in the United States and around the world have indicated a willingness to impose tougher compliance requirements related to crypto assets. As a result, there is an increasing likelihood that companies that hold or deal in crypto assets may be subject to additional regulations in the coming years.
Manufacturers in the U.S. should take note of a new request for comment from the United States Trade Representative as a lack of support may lead to removal of the tariffs and surge in unfairly priced imports.
On May 18, 2022, the U.S. Court of Appeals for the Fifth Circuit issued its decision in Jarkesy v. Securities and Exchange Comm’n, in which it examined the constitutionality of an agency civil money penalty enforcement proceeding.
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