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Francis L. Doorley

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Frank Doorley is a partner in Mayer Brown’s Washington DC office and a member of the Financial Services Regulatory & Enforcement group. He handles a broad range of federal and state regulatory compliance matters, primarily for consumer financial product and service providers.  Frank has significant experience advising lenders, consumer finance providers, and investors on compliance obligations under federal and state law. His experience covers a range of products and program structures, including Fintech and marketplace lending programs, retail and home improvement financing, general-purpose unsecured credit, and small business lending and alternative financing. He regularly provides guidance on federal consumer financial laws such as the Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA) and the CFPB Mortgage Servicing Rules, Equal Credit Opportunity Act (ECOA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Servicemembers Civil Relief Act (SCRA) and prohibitions on unfair, deceptive, and abusive acts and practices (UDAAP).

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Mayer Brown is publishing its first edition of Licensing Link, a new periodic publication that will keep you informed on hot topics and new developments in state licensing laws, and provide practice tips and primers on important issues related to state licensing across the spectrum of asset classes and financial services activities.

In this…

Small business financers and brokers active in New York must comply with New York’s Commercial Finance Disclosure Law (“CFDL”) by August 1, 2023, according to the new effective date the New York Department of Financial Services provided in final administrative rules on February 1.

In addition to the new effective date, the final rules include…

State-chartered banks lending to Iowa residents will want to take note of an Assurance of Discontinuance entered into in December between the State of Iowa and an out-of-state bank to settle claims that the bank charged usurious rates of interest to Iowa consumers. The settlement also highlights the Iowa Attorney General’s interpretation of the state’s…

New York Governor Kathy Hochul signed the Foreclosure Abuse Prevention Act on December 30, 2022. The new law, which takes effect immediately, threatens to significantly constrain the ability of lenders, servicers, and investors to foreclose and may jeopardize their recovery, including with regard to pending foreclosure actions.

Read more in Mayer Brown’s Legal Update.

Small business lenders hoping for federal intervention will be disappointed to learn that the Consumer Financial Protection Bureau (CFPB) has reached a preliminary determination that New York’s new commercial financing disclosure law is not preempted by the federal Truth in Lending Act (TILA). The CFPB’s public notice indicates that it initially takes the same view…

After an almost two-year regulatory process, the California Department of Financial Protection and Innovation (DFPI) adopted final administrative regulations to implement the state’s 2018 commercial financing disclosure law. Most importantly, the final rules come with a long-awaited effective date: December 9, 2022. The effective date honors prior DFPI statements that a six-month window for compliance…

The California State Legislature provided commercial lenders with welcome news this week when the California Senate passed Senate Bill 577 (“SB 577”).  If it is signed by the governor, SB 577 will reinstate the de minimis exemption from the California Financing Law (“CFL”) for lenders making a single commercial loan of $5,000 or more in…

On April 11, 2022, Virginia became the second US state to require providers of merchant cash advance (“MCA”) products to obtain a state regulatory license or registration—hot on the heels of Utah. With Governor Glenn Youngkin’s signing House Bill 1027 into law, companies providing “sales-based financing” in Virginia will now be required to provide up-front…

Utah has followed California and New York by enacting its own Truth in Lending-like commercial financing disclosure law, but with an additional twist—Utah’s new law has a registration requirement. On March 24, Utah Governor Spencer Cox signed SB 183 into law, with an effective date of January 1, 2023. We discuss how this new law…

In February 2022, a legal opinion issued by the California Department of Financial Protection and Innovation (“DFPI”) concluded that employer-provided earned wage access (“EWA”) transactions are not loans under the California Financing Law and California Deferred Deposit Transaction Law.  The DFPI’s legal opinion stands to provide significant clarity to the EWA industry and should encourage the continued adoption of earned wage access as a solution to employees’ needs for low-cost temporary liquidity.

Before diving into the DFPI legal opinion, we briefly remind readers of the basic structure of EWA programs.  Earned wage access is a service that allows workers to obtain wages that they have earned, but have not yet been paid, prior to the worker’s regularly scheduled payday.  Although the exact structure of each program differs, EWA programs generally fall into two broad categories:

  • Direct To Consumer Models are offered directly to workers, without the employer’s involvement.  Any eligible worker can access EWA from a direct to consumer model, as the worker’s employer offering the service is not a prerequisite.  Because direct to consumer models do not integrate with employers, recoupment of EWA advances is typically effected through a single-use automated clearinghouse transaction from the employee’s personal bank account on the employee’s payday.
  • Employer Integrated Models involve the EWA provider entering into a contract with an employer to offer the service as an employee benefit to the employer’s employees.  An EWA provider using the employer integrated model may integrate with the employer’s payroll and time card systems to receive data about the amount of earned wages that an employee has accrued as of a certain date.  Employer integrated programs typically fund an earned wage advance through the employer’s payroll system and then recoup the advance through a payroll deduction facilitated by the employer on the employee’s next regular payday.

Some EWA providers charge fees for use of the service, which are typically either flat transaction fees or “participation” fees for use of the program.

As an innovative and emerging product, EWA programs present novel financial regulatory issues.  The most significant of these issues is the status of an EWA transaction as a non-credit transaction.
Continue Reading California DFPI Affirms Employer-Integrated Earned Wage Access Is Not a Loan