Meet the Regulators [COMPLY2016 Rewind]

By Gianna Barrere
June 29, 2016

The first panel of COMPLY2016 “Meet the Regulators” set the tone for the day—that is, “You can’t sit around and wait for the government to bring things to your attention.” Jobe Danganan, General Counsel and Chief Compliance Officer of Sindeo and former CFPB Attorney, moderated this stellar panel of current and former regulators, featuring Stefanie Isser Goldblatt, Senior Litigation Counsel of Enforcement at the CFPB; Sandy Brown, Assistant Director of Financial Practices at the FTC; and Jo Ann Barefoot, CEO of Jo Ann Barefoot Group and former Deputy Comptroller of the Currency.

Consumer privacy, oversight of service providers, and understanding the legal tests for Deception and Unfairness were three of the most important themes touched upon during the standing-room-only session. Stefanie highlighted the CFPB’s enforcement action against Dwolla for deceiving consumers about how it was protecting their sensitive personal information. She stressed the importance of having a robust compliance program in place to ensure accuracy of messaging to consumers.

Moral of the story? Make sure your marketing communications are correct—everywhere they appear!

Tricking consumers about who you are and what you’re offering is not the way to stand out from the crowd.
- Sandy Brown, FTC

What not many businesses may know, though, is that the CFPB will hold them accountable for ensuring their service providers' actions are in compliance with consumer financial protection laws. Last December, the CFPB carried out an enforcement action against T3Leads, a lead aggregator, for compiling and selling leads to financial and debt collection companies without verifying whom these companies would sell the leads to and whether or not these companies were in compliance.

Just because you’re the middleman doesn’t relieve you of responsibilities.
- Stefanie Isser Goldblatt, CFPB

So how do federal regulatory agencies determine whether or not your claims are compliant? Sandy described the legal tests used by the FTC, CFPB, and other federal regulatory agencies to judge Deception and Unfairness. Here’s how she defined these terms:

  • Deception: Making a claim that is likely to mislead consumers who are acting reasonably and is material to them, i.e. would affect their decision or conduct to a product or service.
  • Unfair: Making a claim that causes substantial consumer injury that is not reasonably avoidable or outweighed by benefits to consumers or competition.

Stefanie added that deception could also be the failure to say something that the consumer needs to make a decision.

Although these technical definitions of non-compliance exist, all three speakers agreed that ultimately, a proactive attitude and common sense are the most important tools for staying compliant. Jo Ann noted that agencies in consumer protection and compliance were transitioning from technical-based regulation to principle-based regulation. For example, no longer are lending companies expected to simply get TILA rules correct, but they are also expected to be proactive and self-monitoring for unfair, deceptive, or abusive acts or practices (UDAAPs)—which include deceptive advertising and marketing.

Industries need to be able to think for themselves about whether something you’re doing could be in compliance with all technical rules but is still unfair, deceptive, etc.
- Jo Ann Barefoot

Looking forward, the panel discussed ongoing initiatives for businesses and regulators to work together to prevent consumer harm:

  • The FTC is hosting a series of Fintech Forums on emerging financial technology and its implications for consumers (most recently, they held a forum on marketplace lending on June 9th).
  • In addition, the CFPB launched Project Catalyst to explore innovation and how to rethink regulations that don’t fit with pro-consumer innovation.
  • The OCC has also released a white paper on innovation in the banking sector.


With that, it was clear that regulatory agencies are serious about protecting consumers, and they’re encouraging all companies to self-monitor and regulate. “We’d like to prevent harm rather than getting companies in “gotcha” situations,” concluded Stefanie.

Check back next week for a rewind of the panel “The Perils and Possibilities of Content Marketing”!

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Understanding and complying with UDAAP policy can be a challenge

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