March 19, 2015

Inside Business Law (March 2015)

Recent Newsletters

Several Committees have recently published newsletters. 

Consumer Financial Services Committee

The February issue of the Consumer Financial Services Committee Newsletter was released on February 25, 2015. The newsletter included notifications about upcoming and ongoing consumer financial services programming, relevant news, articles, and Committee projects. This issue included the following information:

  • Message from the Chair, Nikki Munro.
  • A recap of the CFSC Meeting in The Big Easy.
  • Bank of America Legal Department's Annual Wills on Wheels Clinic, by Todd Stillerman, Bank of America, N.A. For the ninth year in a row, the Bank of America Legal Department partnered with Charlotte nonprofit Legal Services of Southern Piedmont and the Shamrock Senior Center to host Wills on Wheels on November 14, 2014. This is a program where volunteer lawyers and other legal professionals provided 36 low-income, elderly clients with free estate planning services. The annual event brought in volunteers from the Bank of America and U.S. Bank legal departments and the law firms of Culp Elliott & Carpenter and Mayer Brown to provide wills and healthcare powers of attorney for underserved elderly clients.
  • Member Spotlight: Lynette Hotchkiss – Lions and Mentors and Stars, Oh My! by Grace Powers. In the wilds of Alaska, Lynette Hotchkiss didn't meet with any fierce lions. However, she started her wonderful journey into the world of consumer financial services law. It was a journey fraught with hurdles (that darn economy!), giants (the mentors that guided her safely through the thorny thicket of consumer laws and regulations), and triumphs. Today, Lynette is regarded as one of the stellar members of the Consumer Financial Services Committee and a passionate practitioner of consumer finance law.
  • 2013 OCC Guidance on Third-Party Service Providers, by Joan Warrington and Judy Mok, Morrison Foerster LLP. Third-party service providers are an integral part of the financial services industry, providing critical functionalities (e.g., credit decisioning support, payment processing services, records retention, documents destruction) to financial institutions and other participants in the payment process. Given the complexity of services provided, financial institutions may face significant operational difficulties in transferring the services of such third-party service providers that fail to meet appropriate service levels. Given the sensitive nature of information to which these third-party service providers may have access, including personally identifiable information belonging to customers of financial institutions, regulators expect financial institutions to be accountable for the actions of the companies with which they contract. Financial institutions are expected to be prudent in choosing appropriate third-party service providers and monitoring the performance of these providers, beginning with contract negotiations with these companies.
  • Lame Proofs of Claim, by John H. Bedard, Jr., Bedard Law Group, P.C. Fundamental to American law is the notion that the passage of time erodes certainty and reliability. Memories fade over time, making eye-witness testimony less reliable. Physical evidence becomes more vulnerable to alteration, deterioration, loss, or destruction. Critical evidence may be forever lost with the disappearance or death of key witnesses. The passage of time increases the risk that the truth will become obscured by the retelling of a story with stale or incomplete evidence. Defendants are especially vulnerable to the unfairness inherent in a legal trial based on defective evidence. Laws designed to prevent this type of unfairness are called statutes of limitation. These ideas are not novel; statutes of limitation date back to the Romans and Greeks. Statutes of limitation establish the period of time after which societies will not hold its citizens liable under the law, civil or criminal. The time periods vary by state and federal law and by claim. Lawmakers make these rules by balancing two important rights: the right of defendants to be free from stale claims and the right of plaintiffs to prosecute them. Debt collectors are particularly familiar with the statute of limitations for a claim under the Fair Debt Collection Practices Act, which is one year. 

Read the complete Consumer Financial Services Committee Newsletter here

Cyberspace Law Committee

In addition to the message from the Cyberspace Law Committee’s Chair, Ted Claypoole, and a report on the highlights of the Cyberspace Committee’s scheduled activities at the Spring Meeting in San Francisco, several Subcommittees reported out on current activities. This issue includes reports from:

  • Mobile and Connected Devices Subcommittee, Co-chairs Richard Balough and John Rothchild
  • Financial Services and Electronic Payments Subcommittee, Co-chairs Ed Morse and Steve Middlebrook
  • Internet Governance Task Force, Co-chairs Michael Kelly and David Satola
  • International Trade Subcommittee, Co-chairs John Gregory and Hal Burman
  • Enterprise Technology Subcommittee, Co-chairs Candace Jones and Cheryl Burtzel
  • From the Non-US Cyber Law Task Force, Chair Robert Bond
  • New Electronic Contracting Projects, by Juliet Moringiello 

The complete February issue of the Cyberspace Law Committee’s Newsletter can be found here

Middle Market and Small Business Committee

In addition to the message from the Middle Market and Small Business Committee’s Chair, Tom Walsh, the most recent Committee newsletter includes a report on the Corporate Counsel Triage Project. The Committee, together with the Corporate Counsel Committee, is launching its latest project, the Corporate Counsel Triage Project, in April 2015 at the Spring Meeting in San Francisco. One of the primary purposes of this new project is to provide a resource for "non-specialist" in-house and outside general counsel serving middle-market and lower middle-market businesses. 

In addition, the Business Entities Governance Subcommittee, chaired by Allen Sparkman reports that the Business Entities Governance Subcommittee focuses on the myriad of issues that can arise in the governance of a small to middle-market business, and reports out on the activities of the Subcommittee. 

The Emerging Companies Subcommittee, chaired by Elizabeth Bleakley and Sara Stock reports that the Emerging Companies Subcommittee focuses on private companies from cradle to IPO or other exit. This Subcommittee's focus is on understanding and counseling business clients on issues faced by new ventures and growing businesses. The goal of this Subcommittee is to go beyond the immediate needs raised by clients and help its members understand how to assist their clients in comprehending their big-picture needs and implementing a strategy to achieve those needs. For example, where does the client see its business down the road; and the corollary question, how would you, as the client's outside counsel, advise your client so that it can meet its current and future needs? 

The complete Middle Market and Small Business Committee Newsletter can be found here

White Collar Crime Committee

In addition to the message from the White Collar Crime Committee Chair, A.J. Bosco, the newsletter includes a number of interesting articles, including:

  • De-Risking Threatens Religious Access to Banking Services, by Sheila Tendy. For the past year, banks have been cutting ties with businesses that regulators view as "high risk" in order to protect themselves from regulatory scrutiny and potential fines and penalties. Now America's religious organizations appear to be caught in the de-risking vortex. This article addresses the desirability of using market-inhibiting regulatory practices to stymie legal but politically unpopular businesses.
  • Incidents of Foreign Bribery Remain Largely The Same: A Circumstance Unlikely to Change, by Robert M. Appleton. Late last year, on December 2, 2014, seeking to measure transnational corruption, the Organization for Economic Co-Operation and Development, a leading international organization whose purpose is in part is to fight corruption within and throughout its member states, issued a "Foreign Bribery Report: An Analysis of the Crime of Bribery of Foreign Public Officials." The most significant finding of the report is that just a small number of countries have taken successful action against bribery of public officials, in a relatively small number of cases, despite the omnipotence of foreign bribery activity. This article addresses issues surrounding transnational corruption.
  • Derisking: FinCEN Has Your Cake and Eats it Too, by David L. Hall and Matthew P. Nettleton The Department of the Treasury's Financial Crimes Enforcement Center ("FinCEN") wants to have its cake and eat it too – read the article to see how this happens.
  • The SEC's Broken Windows Enforcement Policy: Is there Anything New Here? by Denver G. Edwards. This article examines the Commission's Broken Windows enforcement program and whether it should change how compliance professionals think about carrying out their duties.

The complete White-Collar Crime Committee Newsletter can be found here.

Upcoming Events

In the Know

“In The Know” is an exclusive Business Law Section member benefit. Earn free business law CLE by attending these hot-topic webinars developed by industry experts. On March 26, 2015, at 1:00 PM–2:00 PM ET, the Consumer Financial Services Committee will present Meet the Regulators. Panelists include Christopher J. Young, Chuck Cross, Donna Mary Murphy, Ducie T. Le, and J. Reilly Dolan. The panel will be moderated by Julie R. Caggiano. In a moderated question-and-answer panel, representatives from the primary federal and state regulators of consumer financial protection laws will discuss where each agency fits within the regulatory process, the tools they use, what differentiates one agency from another, and their current focus over the next year. 

Business Law Spring Meeting

The Spring Meeting of the Business Law Section will be held April 16–18, 2015, at the San Francisco Marriot Marquis and InterContinental San Francisco.