Marie F. Hogan is Of Counsel in the firm’s San Francisco office. She has practiced law in California for more than thirty years with a core emphasis on representing commercial banks, other depository institutions and financial service companies in connection with mortgage lending, bank operations, loan workouts, consumer law and compliance, credit and debit cards, bankruptcy and insolvency and similar matters.
Ms. Hogan has been active in the State Bar of California for many years, having served as chair of the Executive Committee of the Business Law Section in 1998 and as a member or advisor to the Executive Committee from 1994 to the present. Marie Hogan is currently also a member of the Consumer Financial Services Committee of the State Bar’s Business Law Section. Ms. Hogan was previously a member of the Uniform Commercial Code Committee where she contributed her extensive skills related to, among other areas, deposits, letters of credit and personal property leasing.
Prior to joining Joseph Law, she has held senior legal positions in some of the largest banking organizations in California including Bank of America NT & SA, The Bank of California NA, World Savings Bank and Charles Schwab Bank.
Ms. Hogan has been a member of the Board of Directors of American Bach Soloists since 2000. She also served two terms as President of the organization. American Bach Soloists perform music of the Baroque era and are known around the world for the quality of their performances and interpretation
Ms. Hogan was awarded her Juris Doctor degree from Hastings College of the Law in San Francisco. Ms. Hogan received her undergraduate degree from the School of Foreign Service at Georgetown University in Washington D.C.
Ms. Hogan is a member of the State Bar of California.
SAN FRANCISCO, CA – March 22, 2013. Joseph & Cohen, headquartered in San Francisco, rolled out a new marketing campaign today as part of its sponsorship of the Western Independent Bankers’ (WIB) Annual Conference for Bank Presidents, Senior Officers & Directors being held in Kauai, HI from March 23 – 27, 2013. Managing Partner Jonathan Joseph notes, “Joseph & Cohen is proud to be a major sponsor of WIB for the fourth consecutive year. WIB’s commitment to assist bankers and directors in navigating the complex changes in the industry mirrors our own.”
For this year’s marketing sponsorship, Joseph & Cohen, which specializes in representing independent and regional banks, chose the image below of a well-dressed attorney riding a skateboard. The concept emphasizes the firm’s ability to solve complex legal matters with skill and agility in a laid-back but professional and cutting edge manner. Joseph & Cohen believes its fresh vision provides a competitive edge in connecting with the next generation of banking leaders.
To learn more, call 415.817.9200 to speak to either of the firm’s name partners: Jonathan Joseph or Jon Cohen.
SAN FRANCISCO, CA – November 13, 2012. Joseph & Cohen, Professional Corporation, located in San Francisco, California, announced today that it successfully structured a settlement for its clients, five former officers of County Bank, Merced, California, in connection with a lawsuit brought by the Federal Deposit Insurance Corporation, in its capacity as receiver for County Bank. County Bank, which collapsed in February 2009, had been the wholly-owned banking subsidiary of Capital Corp of the West (Nasdaq: CCOW).
The case, which was filed by the FDIC in the Federal Court in Fresno, California in January 2012, was titled FDIC, as receiver for County Bank v. Hawker, et al., (Case No. 1:12-CV-000127-LJO) (“FDIC v. Hawker”). The settlement completely settles and satisfies all claims brought by the FDIC against the five former officers of the Bank: Thomas Hawker, Edward Rocha, John Incandela, David Kraechan and Jay Lee (the “officers”).
A companion case that the officers filed against BancInsure, Inc. and the FDIC in July 2012, in the same Fresno based Court, remains outstanding. In that case, Hawker et al v. BancInsure (Case No. 1:12-cv-01261-LJO-GSA), Tom Hawker and the other officers asserted claims against BancInsure for declaratory relief, breach of contract, bad faith, punitive damages and reformation. The officers were forced to sue BancInsure, the professional liability insurer for County Bank, after it abandoned them and refused to defend the claims in the FDIC Action.
Jonathan Joseph, counsel for the officers stated “We believed that we had strong legal and factual defenses to the FDIC’s claims. In our view, County Bank collapsed as a result of the greatest recession in our lifetime. So, we vigorously defended Tom Hawker and the other four officers of County Bank against all of the government’s allegations. But, after the D&O Insurer abandoned our clients and refused to defend them or settle the FDIC lawsuit, we are pleased to have successfully structured this deal with the FDIC as the settlement eliminates all claims, further uncertainty and the trouble, risk and expense associated with the litigation.”
An essential element of the settlement involved an assignment to the FDIC by the officers of their lawsuit against BancInsure including claims for bad faith and breach of contract. The officers retained the right to recover their defense expenses incurred prior to the FDIC settlement from BancInsure. The officers maintained the right to continue to control and prosecute this retained claim against BancInsure.
Tom Hawker, former CEO of County Bank and President and CEO of CCOW, said “I am relieved to put this case behind me as it eliminates further uncertainty, cost or risk to me and my family. I am outraged that the Bank’s D&O insurer abandoned me as I would have been financially ruined if I continued to defend myself against the FDIC’s allegations despite having excellent legal and factual defenses to their claims.”
As a result of the settlement, the FDIC will control and prosecute the officers’ assigned claims against BancInsure at its cost and expense. Jon Cohen, litigation partner at Joseph & Cohen, explained “We look forward to litigating alongside the FDIC on behalf of our clients to prove that BancInsure improperly applied the so-called “insured versus insured” exclusion to deny the coverage our clients had expected and relied upon.”
The parties exchanged other valuable covenants including an agreement not to bring any other civil claims against each other and a promise by the FDIC not to take any further action or assert any claims against any of the property or assets of the officers.
Joseph & Cohen, Professional Corporation, is an AV® rated law firm based in San Francisco, California, that emphasizes the representation of community and regional banks and bank holding companies and their officers and directors. The firm also specializes in representing financial service companies, credit unions and private equity firms in connection with corporate, securities, regulatory, litigation, executive employment and merger matters. Joseph & Cohen is known for sophisticated expertise, extraordinary commitment to clients, relationship-based services, and a range of specialized capabilities typically found only in the largest American law firms.
By Marie Hogan and Jonathan Joseph
The President of the United States sent a wake-up call to the payday lending industry in his 2012 State of the Union speech that they are a target of federal enforcement action by the new Consumer Protection Financial Bureau or CFPB. President Obama exclaimed:
“If you’re a mortgage lender or payday lender or a credit card company, the days of signing people up for products they can’t afford with confusing forms and deceptive practices—those days are over.”
Almost a week before the speech, the Consumer Financial Protection Bureau, the newest federal agency whose name describes its mission, published its guidelines for examinations of short-term, small-dollar lenders (aka “payday lenders”). See www.consumerfinance.gov/guidance. Payday lenders and other non-bank financial service providers that have never been subject to direct federal regulation will now be under the jurisdiction of the CFPB.
The CFPB’s guidelines and the President’s call out indicate the payday lending industry has clearly been targeted due to perceived abuses. The initial guidelines for the payday lending industry consist of 17 pages and are a supplement to the CFBB’s 802 page examination handbook. The management and boards of directors of payday lenders that desire to comply with the CFPB’s regulations should familiarize themselves with the guidelines and implement expanded compliance systems.
WHAT is the CFPB’s purpose?
The CFPB will implement and enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that the market for consumer financial products and services are fair, transparent, and competitive. They will especially target lenders engaging in unfair, deceptive or abusive acts or practices.
WHY payday lending?
Payday loans are supposed to be short term: 14 days. As the name implies, they’re supposed to provide emergency cash to enable consumers to cover short term necessities until the next pay day, when they theoretically should be able to repay the loan. Critics say this is typically not the case. Customers often roll-over their debt when they can’t repay it. They wind up living off that borrowed money at an annual interest rate of 400 to 600 percent or more.
Here’s how it works. Let’s say an individual needs $100 and the interest rate for that two week period is 15 percent. The customer writes a postdated check made out to the lender for $115. If the customer can’t pay that amount when the two weeks is up, the lender keeps $15, the loan is extended and another $15 fee is added on.
The CFPB is still in the fact gathering mode regarding the payday industry, holding hearings earlier this year in Birmingham, Alabama. However, the industry is number two in its list of priorities (see www.consumerfinance.gov/regulations/fall-2011-statement-of-regulatory-priorities). Richard Cordray, the CFPB’s executive director, said the agency will examine bank and non-bank institutions offering these short-term, small-dollar loans. At the Birmingham hearing, Cordray expressed this sentiment:
“We recognize that there is a need and a demand in the country for emergency credit. At the same time, it’s important that these products actually help consumers and not harm them. We know that some payday lenders are engaged in practices that present immediate risks to consumers and are illegal. Where we find these practices, we will take immediate steps to eliminate them.”
WHAT is the scope of CFPB’s responsibility?
CFPB has responsibility for specified federal consumer financial laws, such as Truth in Lending and the Fair Credit Reporting Act and certain Federal Trade Commission rules, such as the Credit Practices rule. The CFPB may also issue rules, and even without a rule, it may examine for unfair, deceptive or abusive acts or practices that cause significant financial injury to consumers, erode consumer confidence, and undermine the financial marketplace.
WHICH payday lenders can the CFPB examine?
Any payday lender, in any state, whether regulated or not, can be examined. The CFPB has the power to take enforcement actions against any payday lender. The first step for the CFPB is an examination of the company for compliance with federal consumer financial laws and unfair, deceptive or abusive acts or practices. An important point is that the examination guidelines merely provide a roadmap for what a company needs to do. The CFBP’s guidelines don’t provide detailed direction to a payday lender but the CFBP will provide notice through the examination process regarding the company’s demerits and legal violations. The CFPB has a scale of 1-5 (one being the best) that will be awarded in an examination. In general, all payday lenders should strive to earn 1 or 2 ratings in all sub-categories that are reviewed.
The CFPB may investigate and bring administrative enforcement proceedings or civil actions in Federal district court for violations of federal consumer financial laws. The CFPB additionally may obtain “any appropriate legal or equitable relief with respect to a violation of Federal consumer financial law” including: 1) rescission or reformation of contracts; 2) refund of money or return of real property; 3) restitution, disgorgement or compensation for unjust enrichment; 4) payment of damages or other monetary relief; 5) public notification regarding the violation; 6) limits on the activities or functions of the person against whom the action is brought; and 7) civil money penalties (which can go either to victims or to financial education).
The CFPB has no criminal enforcement authority; however, it may refer matters it believes may constitute criminal activity to the Department of Justice.
Payday Lender Examinations: What should management know?
The examination procedures are very much based on bank/financial institution formats. Here is our list of how this system works based on years of experience and working with the regulatory agencies:
First, policies and procedures must be in writing. That means the payday lender’s Board of Directors should establish detailed written procedures covering all significant compliance risks and processes.
Second, procedures must address compliance with federal consumer financial laws, as well as addressing other risks.
Third, the Board must be intimately involved in establishing policy, overseeing management and insisting that management comply with its policies.
Fourth, companies must train and monitor their employees.
Fifth, monitor audit procedures and processes and address all criticisms from internal and external auditors, state regulators and the CFPB.
Sixth, compliance must cover “soup to nuts”, meaning from product development to end of customer relationship and every significant step in between.
Seventh, appoint a compliance officer with real authority and responsibility. For smaller companies, this may be an employee who has other responsibilities, but take steps to assure that the compliance officer is qualified.
Eighth, the company must monitor any third party service providers for compliance with the above.
The CFBP examination objectives are:
1. To assess the quality of compliance risk management systems, including internal controls and policies;
2. To identify acts or practices that materially increases the risk of violations of federal consumer financial laws;
3. To gather facts that help determine whether the lender is engaged in acts or practices that violate the requirements of federal consumer financial laws;
4. To determine if a violation of a federal consumer financial law has occurred and whether enforcement actions are appropriate.
Which Federal Laws Are Applicable to Payday Lenders?
- TILA and Regulation Z—TILA is the Truth in Lending Act and Regulation Z require lenders to disclose loan terms and annual percentage rates. Regulation Z also covers advertising disclosures, proper crediting of payment, proper crediting of credit balances and periodic disclosures.
- EFTA and Regulation E—EFTA is the Electronic Funds Transfer Act which protects consumers engaging in electronic transfers, including that lenders may not require, as a condition of loan approval, the customer’s authorization for loan repayment through recurring electronic funds transfers.
- FDCPA—This is the Fair Debt Collection Practices Act which governs collection activities conducted by (a) third party collection agencies and (b) lenders collecting their own debt under an assumed name.
- FCRA— This is the Fair Credit Reporting Act which, with its regulations, governs furnishing information to credit agencies and the use of credit reports.
- GLBA – This is the Gramm-Leach-Bliley Act which, together with implementing regulations, requires that furnishers of information to consumer reporting agencies ensure the accuracy of data furnished to the consumer reporting system.
- ECOA—This is the Equal Credit Opportunity Act which, together with implementing Regulation B, sets requirements for accepting credit applications and providing notice of any adverse action. Discrimination against a borrower is prohibited, plus discrimination based on public assistance income or because the applicant has exercised any right under the Consumer Credit Protection Act is prohibited.
Some payday lenders do attempt to comply with applicable law. However, bad actors in the industry have contributed to the perception that widespread abuses exist. Companies in the “short term small dollar” lending business that desire to avoid potential CFPB enforcement sanctions should implement compliance systems and procedures modeled after those used in the banking industry designed specifically to comply with the laws listed above. This may entail adding risk and compliance officers to existing management teams, robust internal controls and better policies and procedures.
For additional information contact:
Jonathan Joseph at firstname.lastname@example.org; or
Marie Hogan at email@example.com.
SAN FRANCISCO, CA – September 30, 2010. Joseph Law Corporation announced today that it has expanded its banking law expertise through the addition of Marie F. Hogan as Of Counsel to the firm. Ms. Hogan brings more than thirty years of high level banking experience to the firm with a core emphasis on representing commercial banks and financial service companies in connection with mortgage lending, bank operations, loan workouts, consumer law and compliance, credit and debit cards as well as bankruptcy and insolvency matters.
“We are extremely pleased that Marie Hogan is teaming up with Joseph Law. Her depth of industry knowledge as well as her hands-on experience in consumer compliance, loan workouts, regulatory and mortgage lending will benefit our clients in this post Dodd-Frank era. Marie really rounds out our ability to offer complete legal solutions to financial institutions,” said Jonathan Joseph, the firm’s chief executive officer.
Marie Hogan brings to Joseph Law Corporation many years of working hand in hand with the business people who develop necessary and useful financial products for their customers. In a regulated industry, Marie Hogan has the skills to navigate the many new regulations that will be enacted pursuant to the Dodd-Frank Act. The firm will now offer Ms. Hogan’s services to our banking clients to enable them to bring cutting edge products to the market and to help them comply with numerous new consumer, lending and other regulatory requirements.
Marie Hogan’s experience has included senior positions at Bank of America, World Savings and Schwab Bank. Ms. Hogan also served as chair of the Executive Committee of the Business Law Section of the California State Bar in 1998 and as a member or advisor to the Executive Committee from 1994 to the present. Marie Hogan is currently also a member of the Consumer Financial Services Committee of the State Bar’s Business Law Section.
Joseph Law Corporation is an AV® rated firm based in California that emphasizes complex banking, corporate, regulatory, securities and transactional matters for financial institutions, entrepreneurs, businesses, investors and venture capital firms. Joseph Law is known for sophisticated expertise, extraordinary commitment to clients, relationship-based services, and a range of specialized capabilities typically found only in the largest American law firms.
For additional information, please visit the firm’s website at www.josephlawcorp.com or call Jon Joseph at 415.817.9200.
This press release is provided as a general informational service to clients and friends of Joseph Law Corporation. It should not be construed as, and does not constitute, legal advice on any specific matter, nor does this message create an attorney-client relationship. These materials may be considered Attorney Advertising in some states. Please note that prior results discussed in the material do not guarantee similar outcomes.