Press Release February 13, 2019

Goodwin Releases Annual Report of Major Changes and Predictions in the Consumer Financial Services Industry

Global 50 law firm Goodwin announced today the release of its fourth annual Consumer Finance 2018 Year in Review, highlighting key litigation, enforcement actions and regulations that have impacted the consumer finance industry over the past year and outlines the key developments to watch in the year ahead. 

Produced by Goodwin’s industry-leading Financial Industry Practice, the report analyzes consumer finance developments across key issues in the mortgage, credit card, debt collection, credit reporting, student lending, auto lending, payday lending and Telephone Consumer Protection Act areas. It also delves into the implications of key cases decided in 2018. Finally, the report offers an analysis of changes made to the Consumer Financial Protection Bureau (CFPB) following  the confirmation of Kathy Kraninger as Director. 

“2018 was a year of significant change in the consumer financial services space due to the political currents at play in our Nation’s Capital,” said Anthony Alexis, a Goodwin partner and head of the firm’s Consumer Financial Services Enforcement Practice who co-authored the report. “Acting Director Mulvaney’s initiatives came to a halt when the Senate confirmed Kathy Kraninger as the permanent Director of the CFPB last December. In addition, 2018 saw the swearing in of conservative Justice Brett Kavanaugh to the Supreme Court and the beginning of a divided Congress after the midterm elections.” 

“At the beginning of 2018, we predicted a downturn in activity from federal agencies, which we did indeed see play out through the rest of the year,” said Kyle Tayman, a Goodwin partner and a co-author of the report. “Based on what we are hearing, we believe federal agencies in 2019 will continue to slow-walk enforcement action – but we do expect to see an uptick in state actions, given the growing number of Democrat-controlled state legislatures and enforcement agencies following last year’s midterm elections.” 

“As we look ahead to the rest of 2019, there are several key areas we’re watching. One is privacy and data security given Congress’ signals that it will remain at the top of their agenda,” said Sabrina Rose-Smith, a Goodwin partner and a co-author of the report. “The outcome of the renewed litigation against the OCC for accepting FinTech Charter applications is also going to have major implications for banks and Fintech firms.” 

The report’s key findings and predictions for 2019 include: 

  • The federal agencies that have historically been some of the most active saw a substantial decline in activity in 2018. Collectively, enforcement actions and other measurable activity by the Department of Justice, Federal Trade Commission and Department of Housing and Urban Development decreased by about 52 percent compared to the year prior.
  • However, the total damages, penalties and costs obtained through enforcement actions increased since 2017.
  • In 2019, Goodwin predicts that federal agencies will continue to slow their enforcement activity – or at least hold steady with the level of activity exhibited in 2018 – given the lengthy federal government shutdown which kicked off the year.

To view the full analysis, download the report here.