Consumer Financial Services

We handle all types of transactions in the mortgage banking, prepaid card, payments systems, and consumer finance areas, using our extensive knowledge of the regulatory and business environment in which our clients operate to best represent their interests and protect them from risk. We represent clients in connection with:

• Mergers, sales, and acquisitions of mortgage banking companies, consumer finance companies, and prepaid card issuers
• Purchases and sales of mortgage loans and other consumer finance assets and related servicing rights
• Servicing and subservicing agreements, for performing and distressed assets
• Broker, correspondent, and wholesale origination agreements
• Joint ventures, including affiliated business arrangements in compliance with the Real Estate Settlement Procedures Act (RESPA)
• Business entity formation and governance, including corporate bylaws, stockholders agreement, limited liability company agreements, and partnership agreements
• Comprehensive due diligence reviews of companies and financial assets
• Warehouse loan and repurchase (repo) financing agreements
• Pooling and servicing agreements, and securitization
• Data processing and service bureau agreements and software licensing agreements
• Domestic and foreign outsourcing agreements, including contract processing and underwriting agreements (including “private label” agreements) and technology outsourcing agreements
• Affinity and marketing agreements
• Executive and other employment agreements
• Creation and review of seller and servicer guides
• Drafting user agreements and other transaction documents for various prepaid card programs

When necessary we work with our colleagues in the corporate, securities and derivatives, structured finance, outsourcing, and intellectual property practices, synthesizing our knowledge of the mortgage banking and consumer finance industry with their specific proficiencies.

State and federal regulatory compliance is an integral part of our Mortgage Banking and Consumer Financial Products practice.  With respect to federal compliance issues, K&L Gates lawyers have worked at various federal agencies and are fully conversant in the Bank Secrecy Act (BSA), Community Reinvestment Act (CRA), Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Equal Credit Opportunity Act (ECOA), Electronic Funds Transfer Act (EFTA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Fair Housing Act (FHA), Flood Disaster Protection Act (FDPA), Gramm-Leach-Bliley Act (GLBA), Home Mortgage Disclosure Act (HMDA), Home Ownership and Equity Protection Act (HOEPA), National Flood Insurance Protection Act (NFIP), Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA), and the USA PATRIOT Act.

Our state law practice includes researching and analyzing mortgage banking, real property, money transmitter, payment systems, consumer protection, and consumer finance laws in all 50 states and the District of Columbia.

Our lawyers understand the interplay between state and federal law, and routinely counsel clients on federal preemption and related issues. We also analyze policies and procedures for compliance with applicable federal and state laws, prepare industry comment letters on proposed regulations, conduct due diligence, conduct in-house training seminars, and design and evaluate enterprise risk, due diligence, and quality control systems.  In addition, we assist companies with implementing the latest federal and state laws and regulations.

K&L Gates routinely represents banks, thrifts, mortgage lenders and servicers, prepaid card issuers and sellers, and other providers of consumer financial services in avoiding and defending administrative and other governmental audits, investigations, and proceedings. Our depth of knowledge of federal and state regulatory requirements, coupled with our experience with how lenders, servicers, and other consumer financial products providers operate within these requirements, enables us to effectively communicate with both regulators and our clients to navigate through complex enforcement matters. We handle FHA/VA/GNMA audits, examinations, administrative proceedings, and Inspector General investigations, consisting of claims for indemnification, civil money penalties, and withdrawals of governmental approval (including suspensions, debarments, and probations). We represent lending and servicing institutions that are subject to examinations, investigations, administrative proceedings, and lawsuits initiated by the FRB, OTS, FDIC, HUD, state banking authorities, and state attorneys general involving alleged violations of state and federal consumer credit laws, including RESPA. We also defend clients in DOJ investigations involving alleged False Claims Act violations and FTC investigations involving alleged violations of the Federal Trade Commission Act and other federal consumer credit laws.

We also regularly assist clients in avoiding enforcement actions by counseling on federal and state regulatory requirements, performing due diligence and quality control reviews, and working with lenders and servicers to address regulatory compliance concerns in a way that takes into consideration the practical business considerations of consumer financial products providers. Our command of complex formal and informal regulatory requirements and the compliance expectations of various federal and state agencies enable us to provide effective and useful advice on structuring policies, procedures, and business processes designed to adhere to the relevant requirements.

K&L Gates provides sophisticated fair lending representation to financial institutions throughout the United States. Our fair lending lawyers handle a wide array of issues ranging from class action defense, government enforcement, price monitoring and other compliance programs, and day-to-day compliance advice. We handle investigations of clients by the United States Department of Justice, the Federal Trade Commission, the United States Department of Housing and Urban Development, federal banking regulators, state attorneys general, and state banking departments. We also regularly defend banking, mortgage lending, and consumer financial services institutions in federal and state consumer class action litigation. In addition to federal and state antidiscrimination statutes, our fair lending team handles compliance with the Home Mortgage Disclosure Act, Community Reinvestment Act, anti-predatory lending laws, and related requirements. Our depth of experience in fair lending enforcement, litigation, and compliance, combined with our understanding of how lending institutions operate, enables us to provide effective advice that balances practical business considerations with minimizing risk.

The lawyers and regulatory compliance analysts at K&L Gates have been helping companies engaged in mortgage finance and other consumer credit activities obtain and maintain state license and federal approvals for over 20 years. We routinely handle nationwide licensing and renewal projects involving all manner of professional licenses for consumer credit-related activities, including licenses to engage in mortgage lending, brokering or servicing, consumer lending and brokering, commercial mortgage and non-real-estate-secured commercial or business activities, collections, money services or money transmitter businesses, sales finance activities, and real estate broker activities. We also help companies obtain and maintain approvals from the Department of Housing and Urban Development to make FHA-insured mortgage loans, from the Department of Veterans Affair to make VA-guaranteed mortgage loans, from Fannie Mae or Freddie Mac to act as seller/servicer, or from Ginnie Mae to act as an issuer or servicer. Many of these licensing projects are undertaken to facilitate stock or asset purchase transactions, complex reorganizations and restructurings, and public or private offerings. We work closely with regulators in each state, and with their trade association, including the American Association of Residential Mortgage Regulators, and frequently speak at the AARMR's annual conferences and training sessions. We also work closely with representatives of the Conference of State Bank Supervisors (CSBS) that is developing the Nationwide Mortgage Licensing System and Registry (NMLSR), the on-line system through which all state residential mortgage finance license applications, individual loan originator license applications, and eventually other state licenses will be obtained and maintained. We are members of the Industry Development Working Group of CSBS that has the opportunity to comment on new developments and changes in the NMLSR.

K&L Gates represents banks, thrifts, mortgage companies, consumer finance companies, and other financial institutions in class action and individual litigation matters throughout the United States. Our competitive advantage is the scope and depth of our litigation experience and our geographic reach, combined with our substantive knowledge of consumer credit issues.

K&L Gates lawyers regularly defend banks, mortgage lenders, loan servicers, and consumer financial services providers in federal and state consumer class action litigation throughout the country. These cases have included putative national classes, and state and multi-state classes. They have concerned challenges to financial institutions under various federal consumer protection statutes such as the Fair Housing Act (FHA), the Equal Credit Opportunity Act (ECOA), the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), the Credit Repair Organizations Act, and the Racketeer Influenced and Corrupt Organizations Act (RICO), as well as under state unfair and deceptive practices statutes, including California’s Unfair Competition Law.

Our Prepaid Cards and Payment Systems practice provides transactional, regulatory compliance, and enforcement/litigation defense to various parties involved in payment systems. Our clients include issuers and distributors of prepaid cards and other types of prepaid access devices, mobile payment providers, and virtual currency issuers. Our regulatory compliance practice includes all federal laws regulating these subjects, as well as the laws of all 50 states and the District of Columbia.

Our Public Policy and Law practice, which is centered in our Washington, D.C. office, includes a bipartisan team of professionals with an in-depth knowledge of the legislative process, substantive experience, and strong ties to key decision makers in Congress. Our group of professionals has built its practice by understanding how the complex policy-making process works from start to finish. Our victories have resulted from creative strategies and the successful integration of lobbying, regulatory implementation, coalition building, political assistance, public relations, and practical day-to-day operational excellence. We have strong relationships with Democrats and Republicans in the House, the Senate, and the administration. Among our lawyers and professionals are a former senator, two former House members, and key former Republican and Democratic counsel and staff to the House and Senate leadership and committees. Our state policy practice has a strategic geographic footprint covering the entire country, with regional headquarters across the United States: in North Carolina, Pennsylvania, and Texas.