Photo of Steven M. Kaplan

Steven M. Kaplan

Subscribe to Steven M. Kaplan's Posts

Steven Kaplan is a partner in Mayer Brown’s Washington DC office and a member of the Consumer Financial Services group. He concentrates his practice on matters related to consumer financial products and represents clients in federal and state supervisory matters, investigations and enforcement proceedings. He also advises clients on compliance with federal and state laws governing licensing and practices of financial institutions, mortgage lenders, consumer finance companies, loan servicers, prepaid card issuers, payment system providers and secondary market participants. Steven acts as regulatory counsel in connection with investments or acquisitions related to consumer loans and other consumer financial products and performing regulatory compliance due diligence. Additionally, Steven assists with structuring operations and developing compliance management systems and due diligence programs and with litigation involving regulatory compliance matters.

Read Steve's full bio.

Contact:Read more about Steven M. Kaplan

Earlier today the Trump administration’s nominee to lead the Consumer Financial Protection Bureau (“CFPB” or “Bureau”), Jonathan McKernan, testified before the Senate Committee on Banking, Housing and Urban Affairs.  McKernan was most recently a member of the Board of Directors of the Federal Deposit Insurance Corporation and has also worked in private practice, in Congress, and at the Federal Housing Finance Agency.

During the hearing, news broke that the CFPB had moved to dismiss a number of pending lawsuits with prejudice.  Dismissing a case with prejudice is significant because it essentially prohibits the Bureau from filing the same claims against the defendant in the future.  These developments follow other moves the agency made to reverse prior actions, including filing a motion to withdraw an amicus brief it submitted in a lawsuit shortly before Trump’s inauguration.Continue Reading McKernan Testifies before Senate Committee amidst Rollback of CFPB Actions

There were positive developments last week in connection with the recently announced licensing requirements for assignees of residential mortgage loans and installment loans in Maryland — a proposed legislative fix, an extended enforcement deadline, and a clarifying exception from the requirement.

As we discussed in our Legal Update last month, the Maryland Office of Financial Regulation (OFR) asserted that assignees of residential mortgage loans — including certain “passive trusts” that acquire or obtain assignments of residential mortgage loans in Maryland — must become licensed in Maryland prior to April 10, 2025, unless the assignee is expressly exempt under Maryland law. The guidance reflected the OFR’s understanding of an April 2024 decision by the Appellate Court of Maryland in Estate of Brown v. Ward that any assignee of any residential mortgage loan is required to obtain a Mortgage Lender license, and an Installment Loan license is required if the mortgage loans are made subject to the Credit Grantor provisions, regardless of whether the loans are open- or closed-end extensions of credit.

That guidance has caused significant turmoil in the Maryland residential mortgage markets, with significant practical concerns about requiring passive trusts to obtain a license and with certain industry participants suspending the purchase of Maryland mortgage loans.

To address these concerns, the OFR worked with industry participants to develop proposed legislation, the Maryland Secondary Market Stability Act of 2025 — two identical bills, Senate Bill 1026 and House Bill 1516, introduced on February 17, 2025.Continue Reading Update on Maryland Licensing for Loan Assignees

On Friday, the Trump administration installed Russell Vought, the recently-confirmed head of the Office of Management and Budget, as the new acting director of the Consumer Financial Protection Bureau (“CFPB” or “Bureau”).  Vought replaced Scott Bessent who served as the acting director of the Bureau for less than a week.  Vought quickly issued a notice directing staff to pause all agency activity.  The directive goes further than the similar directive issued by former Acting Director Bessent and notably instructs staff to “cease all supervision and examination activity” and to “cease any pending investigations.”  Significantly, it has been reported that today Vought instructed Bureau staff to “not perform any work tasks” at all. It has also been reported that the Bureau’s DC headquarters will be closed from February 10 through the 14th.Continue Reading New Acting Director Installed at the CFPB

Yesterday, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) announced that Scott Bessent, the recently confirmed Treasury secretary, is now the acting director of the Bureau. The announcement comes after the Trump administration fired former Director Rohit Chopra over the weekend. 

Unlike the prior transition to a Trump administration, when then-Director Richard Cordray stayed on through most of the first year of President Trump’s term, the industry expected Director Chopra to be removed immediately due to a 2020 Supreme Court decision that held that the CFPB director may be removed at will by the President. President Biden removed Trump’s Senate-confirmed CFPB director, Kathy Kraninger, using that authority. However, Director Chopra continued to hold his job for almost two weeks after the inauguration. In our view, this delay was expected as the administration had to wait to remove Director Chopra until it had a Senate-confirmed individual who could be appointed to serve as the acting director under the Federal Vacancies Reform Act. The Trump administration presumably did not want to remove Director Chopra only to have one of his deputies serve as the acting director as the goal of installing Secretary Bessent as the acting director is to quickly shift the priorities of the Bureau.Continue Reading Acting Director Installed at CFPB: What to Expect in the Months Ahead

On January 15, 2025, the Consumer Financial Protection Bureau took three coordinated actions related to home equity contracts or investment transactions. Although none of the CFPB’s actions are binding, and may not reflect the new administration’s views, the CFPB seeks to educate consumers and hints at ways that regulators could address those those transactions moving…

On January 10, 2025, the Maryland Office of Financial Regulation (“OFR”) issued formal guidance asserting that assignees of residential mortgage loans—including certain “passive trusts” that acquire or obtain assignments of residential mortgage loans in Maryland—must become licensed in Maryland prior to April 10, 2025 unless the assignee is expressly exempt under Maryland law. The guidance, which expands on an April 2024 court ruling that an existing assignee of a home equity line of credit was required to obtain a license as a prerequisite to having legal authority to bring a foreclosure action in Maryland court, raises significant questions regarding how the OFR will apply this new licensing requirement, how assignees of residential mortgage loans will respond to the new guidance, and whether and to what extent this guidance will impact the secondary market for Maryland residential mortgage loans.

Maryland’s existing licensing laws do not expressly require a license to purchase closed and funded residential mortgage loans. In April 2024, a decision by the Appellate Court of Maryland, Maryland’s intermediate appeals court, held that the licensing requirement under Maryland’s Credit Grantor provisions that applies to persons who “make” certain open-end home equity lines of credit loans with interest rates and charges exceeding Maryland’s statutory usury limit must be read in a manner that applies to subsequent assignees of such a loan.  The Appellate Court held in Estate of Brown v. Ward that those provisions require assignees of home equity lines of credit made pursuant to the Credit Grantor provisions to hold (1) a Maryland mortgage lender license, and (2) a Maryland Installment Loan license in order to have the legal right to initiate a foreclosure action on the loan, unless the assignee is exempt from licensing. Even though the express statutory language in the Credit Grantor provisions limits the scope of the licensing requirement to a person “making” loans, which arguably is limited to the originating lender that closes and funds the loan, the Appellate Court concluded that because Maryland case law observes “the principle that an assignee ‘succeeds to the same rights and obligations under the loan agreement as its assignor[,]’” an assignee of a loan made subject to the Credit Grantor provisions is subject to any licensing requirements that applied to the originating lender. Thus, the court held that an assignee (including the statutory trust at issue) was required to obtain both an Installment Loan license and a Mortgage Lender license in order to have legal authority to bring a foreclosure action on a loan made subject to the Credit Grantor provisions.

The Ward decision was limited to home equity lines of credit that were specifically made pursuant to the Credit Grantor provisions and did not address whether a statutory trust, or any other assignee, would be required to obtain a license to acquire a loan that was not made pursuant to the Credit Grantor provisions (although the court did express skepticism about the reasoning of certain federal court decisions that held that out-of-state statutory trusts were not subject to licensing requirements under Maryland’s Mortgage Lender Law). Since the parties did not appear to raise that argument, the Ward decision also did not address whether the court’s conclusion would have been different if the national bank that acted as trustee for the trust in Ward—and which, as a national bank, is exempt from licensing under Maryland law—was the party that acquired and held the loans in its capacity as trustee for the trust. 

On January 10, the OFR issued guidance to “clarify” its position on the application of Maryland’s licensing laws to assignees of residential mortgage loans in light of Ward. Despite previously taking the position that a license was not required to purchase closed and funded residential mortgage loans (and issuing regulations consistent with that position), the OFR’s new guidance adopts the court’s reasoning in Ward that an assignee “succeeds to the same rights and obligations as the assignor,” including licensing requirements that applied to the originating lender. The guidance expands the holding in Ward and asserts that any assignee of residential mortgage loans, including “mortgage trusts,” are required to obtain a license under the Maryland Mortgage Lender Law to “acquire or obtain assignments of any mortgage loans,” regardless of lien position. The Mortgage Lender Law exempts, among other entities, federally-chartered banks, Maryland state banks, and insurance companies that are authorized to do business in Maryland, although state banks that are chartered by a state other than Maryland are only exempt if the bank maintains a branch in Maryland. Continue Reading Maryland Guidance Applies Licensing Requirements to Assignees of Residential Mortgage Loans

On March 5, the Consumer Financial Protection Bureau (the “Bureau”) issued a Final Rule that would significantly restrict late fees that consumer credit card issuers may charge to a mere $8.

Within two days, the Final Rule faced a challenge in the Northern District of Texas by a coalition of trade groups including the United…

Following closely on the heels of a Georgia law enacted in May, Connecticut and Florida have become the latest states to enact laws requiring providers of small business financing to provide disclosures to recipients—and in Connecticut’s case, to require certain commercial finance providers to register with the state. We examine the unique and interesting provisions…

Providers of commercial financing should take note that Georgia has become the fifth US state to enact small business financing disclosure requirements since California started the trend in 2018. Georgia Senate Bill 90 was signed by Governor Brian Kemp on May 1, 2023, and takes effect January 1, 2024. The Georgia law applies to transactions of…

Pennsylvania Attorney General Michelle Henry just announced an $11 million settlement with a rent-to-own provider resolving allegations of deceptive and predatory financing practices. The May 15, 2023, settlement, which is awaiting court approval, resolves allegations that Snap Finance LLC and its affiliates (“Snap”) disguised the nature of financing products it offered, concealed outstanding balances, engaged in deceptive collection practices, and used a web portal that allowed retailers to sign consumers up for financing without their knowledge, among other claims.Continue Reading Pennsylvania Targets Rent-to-Own Company Over Practices