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Marie F. Hogan

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.

Feds Target Payday Lenders: The New Enforcement Reality

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 jon@josephandcohen.com; or

Marie Hogan at mhogan@josephandcohen.com.

Joseph Law Expands its Banking Industry Expertise with Addition of Marie Hogan

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.

Kenneth Sayre-Peterson

Kenneth Sayre-Peterson is a Partner of Joseph & Cohen with a focus on banking regulation, credit unions, money transmitters, securities, trust and bank enforcement matters. He joined Joseph & Cohen in 2012 following his retirement from the California Department of Financial Institutions (DFI), where he served in various legal capacities during a twenty-two year career.

Mr. Sayre-Peterson acted as the General Counsel for the California Department of Financial Institutions from June 2007 until his retirement in November 2011. He was responsible for assisting the DFI’s Legislative Section and spearheaded a four year project culminating in the restatement of California’s Banking Law which was codified as part of the California Financial Code in January 2012. As part of this project, he drafted substantially all of relevant the enabling legislation.

Throughout his DFI career, Mr. Sayre-Peterson practiced general financial institutions law which resulted in an intimate knowledge of state and federal banking law, credit unions, regulatory and enforcement issues, money transmitter matters, securities and trust laws, as well as the corresponding federal laws. In this capacity, He played a significant role in many troubled bank resolutions and worked closely with senior regulatory staff at the Federal Deposit Insurance Corporation and the Federal Reserve Bank. While serving as the DFI’s General Counsel, he influenced the Department’s policy making process including the direction and scope of its examination and enforcement programs.

Mr. Sayre-Peterson is a member of the Consumer Financial Services Committee of the State Bar of California’s Business Law Section. He has been a featured speaker and panelist at numerous legal and banking seminars throughout his career including the Western Independent Bankers Association, the Bankers Compliance Group, the California Bankers Association, the Conference of State Bank Supervisors and the California Credit Union League. As the lead DFI attorney, he was an advisory member of the Financial Institutions Committee of the State Bar of California’s Business Law Section. Prior to joining the DFI in 1988, he worked as staff tax counsel for four years with the California State Board of Equalization. Before entering state service, he specialized in appellate work and lobbying while in private practice in Sacramento.

Mr. Sayre Peterson has been a member of the State Bar of California since 1983 following graduation, with distinction, from McGeorge School of Law, Sacramento. He earned a Bachelor of Arts degree in History from California Polytechnic State University, San Luis Obispo, 1977.

Jonathan Joseph to Present “Dodd-Frank Executive Compensation and Corporate Governance” Webinar for CalBar

SAN FRANCISCO, CA – August 12, 2010. Joseph Law Corporation announced today that its Managing Partner, Jonathan D. Joseph, will present “Dodd-Frank’s Corporate Governance and Executive Compensation Requirements For Public Companies:  Why Planning Now For 2011 is Essential”  via a live 60 minute webinar on August 18, 2010.  The Calbar’s description of Mr. Joseph’s webinar presentation states:

“The Dodd-Frank Wall Street Reform and Consumer Protection Act or “Dodd-Frank” was enacted on July 21, 2010.  Commencing in 2011, a non-binding shareholder “Say on Pay” vote to approve executive compensation may be the most profound executive pay provision in Dodd-Frank. Each public company must also ask its shareholders whether future Say on Pay votes should take place every one, two or three years (Say When on Pay).  When mergers or other acquisitions are submitted to shareholders, public companies will also be required to submit golden parachutes to shareholders for approval (Say on Golden Parachutes). Other notable provisions require enhanced independence for board compensation committees and their advisers and claw backs of erroneously awarded executive compensation as well as new descriptions of pay versus performance and internal pay equity metrics.  Dodd-Frank also explicitly authorized the SEC to adopt “proxy access,” a procedure where shareholder submitted board nominees will be included in the company’s proxy solicitation materials.   Say on Pay, Say When on Pay and Say on Golden Parachutes are far from meaningless.  These new corporate governance requirements will impact as many as 10,000 companies. Learn What is Required, What Isn’t Clear and Pragmatic Steps to Consider Now from a corporate securities practitioner with more than three decades of experience. This webinar is appropriate for inside and outside corporate legal advisers, board members, Board and Compensation Committee Chairman, CEOs, CFOs and investor relations personnel.”

The 60 minute webinar will be presented by Jonathan Joseph live online at 1:00 pm on August 18, 2010 via the CalBar’s website and will be retained in the Calbar’s CLE online archives ensuring that the program  will be available in the future to interested persons including California lawyers seeking participatory continuing legal education credit.  The archived webinar will be available after August 18 at www.calbar.org/online-cle and then clicking on “Tele-Seminars and Webinars”.

Jonathan Joseph is the Managing Partner of Joseph Law Corporation. His practice is devoted largely to complex banking, corporate, mergers and acquisitions, venture capital and bank regulatory matters. Mr. Joseph is a current member of the Financial Institutions Committee of the State Bar of California’s Business Law Section. He has been a frequent lecturer and writer on subjects relating to banking, financial institutions, corporate and securities law, mergers and acquisitions and venture capital.  Mr. Joseph is also a member of the New York and DC Bar.

For more information contact Jonathan  Joseph at jon@josephlawcorp.com or 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.