April 2 – Read the newsletter below for the latest Mortgage Banking and Consumer Finance industry news, written by Ballard Spahr attorneys. In this issue, our lawyers discuss the changing landscape of the residential solar industry, a newly announced investigation into FICO pricing practices in the mortgage credit scoring market, Oklahoma becoming the latest state to enact a comprehensive state privacy law, and much more.
- Podcast Episode: CFPB Supervision Reset? What Banks and Non-Banks Should Know About the Emerging Examination Landscape
- Podcast Episode: Residential Solar Finance Under Intensifying Scrutiny: Key Regulatory and Litigation Trends
- Introducing Our New Six-Part Podcast Mini-Series: Debt Sales 101
- Podcast Episode: Debt Sales 101 Mini-Series—Episode One: How Debt Sales Work and Why Companies Use Them
- Coming Soon: A Must-Listen Conversation With a Key New York Regulator
- Federal Judge Rules CFPB Must Continue to Ask Federal Reserve for Funds
- Senator Hawley Investigating FICO Credit Score Pricing Practices and Urging FTC to Investigate as Well
- Bipartisan Group of Senators Reintroduces Banker ‘Clawback’ Legislation
- NLRB Formally Withdraws Biden-Era Joint Employer Standard
- Oklahoma Passes Comprehensive State Privacy Legislation
- Looking Ahead
On this episode of the Consumer Finance Monitor Podcast, our host, Alan Kaplinsky, discusses the rapidly evolving landscape of federal financial supervision with Sherra Brown, Head of Regulatory Research and Analysis for the Americas at Vixio Regulatory Intelligence. Our conversation focuses on what may be a fundamental shift in supervisory practices at the Consumer Financial Protection Bureau and the implications of parallel changes at the federal banking agencies.
Recent reports suggest that the CFPB may dramatically scale back its supervisory program—potentially reducing the number of examinations from roughly 600 annually to about 70, conducting examinations entirely virtually, narrowing the scope of reviews, and even introducing a so-called “humility pledge” for examiners. If implemented, these developments would represent a significant departure from the Bureau’s prior supervisory posture.
At the same time, the federal prudential banking regulators—the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and Federal Reserve Board—are moving toward a more risk-focused examination model, eliminating “reputation risk” as a supervisory category and signaling a broader effort to reduce regulatory burden.
Below are several key themes from our discussion.
Possible Structural Changes to CFPB Supervision
Sherra and Alan discussed reports that the CFPB could significantly reduce the scope and frequency of its supervisory examinations. The Bureau may move toward a model involving:
- Fully virtual examinations
- A dramatically smaller number of exams each year
- Narrower, risk-focused review areas
- Greater reliance on institutions’ internal compliance testing
The shift could also reflect staffing reductions and broader policy priorities under the current administration.
While virtual examinations are not new, as they were widely used during the COVID-19 pandemic, the potential reduction in exam scope and volume would mark a major change. As Sherra noted, a narrower supervisory footprint raises an important question: is the Bureau fundamentally redesigning its supervisory model or simply doing the minimum necessary while its future remains uncertain?
What a Virtual Examination Looks Like
For institutions that have not experienced a virtual exam, the process is procedurally similar to traditional on-site supervision. Institutions typically receive a document request list and must provide materials electronically. Interviews and meetings with examiners occur via videoconference.
However, the key difference is relational. Virtual supervision makes it harder for examiners and institutions to build the working relationships that often facilitate dialogue and clarification during an on-site review. Data integrity, document accessibility, and centralized record management become even more important in a virtual environment.
Likely Areas of CFPB Focus
Although the Bureau has not yet clearly identified which institutions will be examined, Sherra suggested that the focus will likely be on large banks rather than non-bank entities.
She also noted that several areas historically emphasized by the CFPB appear unlikely to receive the same attention going forward. For example, the Bureau has backed away from certain fair lending theories such as disparate impact.
One area that appears likely to remain a priority is protections for service members, including compliance with the Military Lending Act.
Prudential Regulators: A Parallel Shift
While the CFPB’s future direction remains uncertain, the prudential regulators have continued their examination programs.
One of the most notable developments is the elimination of “reputation risk” as a supervisory category. The OCC has already removed it from examination practices, and both the FDIC and Federal Reserve have indicated similar intentions.
Historically, reputation risk sometimes served as a catch-all category allowing regulators to pressure institutions even when no specific legal violation was identified. Its removal is part of a broader effort to focus supervision on clearly defined financial, operational, and compliance risks.
At the same time, regulators appear to be tailoring examination intensity more carefully based on institutional size and risk profile, potentially reducing the burden on community banks.
Compliance Should Not Be Relaxed
Despite the apparent reduction in federal supervisory activity, Sherra emphasized that institutions should not weaken their compliance management systems.
Several factors make continued vigilance essential:
- State attorneys general remain active in consumer protection enforcement.
- Private litigation risk persists.
- Future administrations could revive aggressive federal supervision, potentially accompanied by look-back reviews.
Strong documentation, robust complaint management processes, and clear audit trails remain essential.
The Growing Role of States
Another important theme from our discussion is the expanding role of state enforcement.
Several states, including New York, California, and Massachusetts, have signaled their intention to fill any perceived gaps left by reduced federal oversight. State regulators and attorneys general continue to focus on issues such as fair lending, consumer protection violations, and deceptive practices.
Accordingly, institutions operating nationally must consider not only federal expectations but also evolving state regulatory priorities.
Five Practical Takeaways
Five key takeaways for financial institutions navigating this changing supervisory environment are:
- Fewer examinations do not mean less regulatory risk.
- Complaint management and data analytics will become increasingly important.
- Documentation discipline is even more critical in a virtual examination environment.
- Institutions should not weaken their compliance management systems.
- Board and senior management oversight remain essential.
In short, while federal supervision may be evolving, the fundamental expectations for sound compliance and risk management remain unchanged.
Listeners can access the full discussion on the Consumer Finance Monitor Podcast, where Sherra Brown provides valuable insight into what may be one of the most significant shifts in federal financial supervision in recent years.
Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm’s Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.
To listen to this episode, click here.Consumer Financial Services Group
On this episode of the Consumer Finance Monitor Podcast, our host, Ballard Spahr’s Alan Kaplinsky, was joined by colleagues Steven Burt and Melanie Vartabedian to explore a rapidly evolving and increasingly complex area of consumer financial services: residential solar finance.
Building on prior discussions of the broader solar finance landscape, this episode zeroes in on the regulatory and litigation developments that are reshaping the residential solar market in real time. The discussion highlights how an industry that experienced explosive growth over the past decade is now facing heightened scrutiny from regulators, enforcement agencies, and private litigants alike.
From Rapid Growth to Market Headwinds
As Steven explained, the residential solar industry expanded dramatically between 2015 and 2022, driven by:
- Federal and state tax incentives
- Declining equipment costs
- Innovative financing models
- Aggressive direct-to-consumer sales strategies
Growth peaked around 2023, but the market began to slow in 2024 and beyond due to several converging factors:
- Changes to net energy metering policies (particularly in California)
- Rising interest rates impacting financing affordability
- Supply chain constraints
- Increased emphasis on battery storage solutions
- Federal policy shifts, including reduced support for renewable energy and changes to tax credits
These developments have forced industry participants to adapt quickly—often while still operating under legacy business models that are now attracting scrutiny.
A Surge in Government Investigations and Enforcement
One of the most significant themes discussed in the podcast is the sharp rise in government scrutiny.
State attorneys general and consumer protection agencies across the country have launched investigations and enforcement actions targeting:
- Direct-to-consumer sales practices
- Marketing representations about energy savings and tax benefits
- Long-term financing structures, particularly loan-related fees
A notable inflection point came in 2024, when the Consumer Financial Protection Bureau (CFPB) issued a spotlight on solar financing, identifying risks such as:
- Alleged “hidden” dealer or platform fees
- Misleading claims regarding tax credits
- Misrepresentations about system performance and savings
Since then, enforcement activity has expanded across numerous states, with additional investigations ongoing. Notably, even local regulators—such as New York City’s Department of Consumer and Worker Protection—have begun to assert jurisdiction, signaling a broader and more aggressive enforcement landscape.
Private Litigation: Class Actions and the “Dealer Fee” Controversy
Parallel to government activity, private litigation has surged. Melanie Vartabedian highlighted two major waves of litigation:
1. Earlier Cases: Sales Practices
Initial lawsuits focused on:
- Unauthorized credit checks (FCRA claims)
- High-pressure or deceptive sales tactics
- Misrepresentations about tax savings and energy production
2. Current Wave: Financing Structures
More recent cases center on dealer fees (also called platform or financing fees), with plaintiffs alleging that:
- These fees are effectively hidden finance charges
- They should be disclosed under the Truth in Lending Act (TILA)
Courts in Minnesota have allowed these claims to proceed past motions to dismiss, rejecting arguments—at least at the early stage—that such fees are merely “seller’s points” exempt from disclosure.
While these rulings are preliminary, they have:
- Opened the door to costly discovery
- Encouraged additional class actions and enforcement cases
- Created significant uncertainty regarding how courts will ultimately resolve the issue
The Expanding Role of the FTC Holder Rule
Another important litigation risk involves the FTC Holder Rule, which allows consumers to assert claims against loan holders that they could assert against installers.
This creates potential exposure for:
- Lenders
- Secondary market participants
- Securitization investors
Although liability is generally capped at the amount of the loan, the rule can still create substantial risk, especially where plaintiffs seek rescission of contracts.
Practical Guidance for Industry Participants
The speakers emphasized that companies operating in the residential solar space must take proactive steps to manage risk. Key recommendations include:
1. Strengthen Compliance and Oversight
- Conduct comprehensive reviews of sales and marketing practices
- Ensure clear, accurate, and compliant disclosures
- Align legal and compliance teams with customer service functions to identify emerging issues early
2. Enhance Dealer and Partner Management
- Perform rigorous upfront diligence on third-party installers and sales organizations
- Implement ongoing monitoring and auditing
- Act quickly to address complaints or misconduct
3. Improve Transactional Transparency
- Reassess how pricing and fees—particularly dealer fees—are structured and disclosed
- Evaluate potential exposure under TILA and state consumer protection laws
4. Conduct Portfolio-Level Risk Assessments
- Carefully diligence solar loan portfolios prior to acquisition
- Consider litigation and regulatory risks embedded in originated assets
5. Stay Ahead of Policy and Enforcement Trends
- Monitor federal, state, and local regulatory developments
- Engage with industry groups and legal advisors
- Anticipate—not react to—regulatory changes
What Lies Ahead: The Next 18–24 Months
Looking forward, the panelists expect:
- Continued and expanding enforcement activity, particularly at the state level
- More class actions and private litigation, fueled by early court rulings
- Greater clarity regarding dealer fee treatment, as courts begin to rule on the merits
- Increased scrutiny of sales practices, especially those involving third-party dealers
Importantly, the regulatory and litigation environment is unlikely to ease in the near term. Instead, companies should expect more investigations converting into enforcement actions and greater coordination among regulators.
Key Takeaways
As Alan Kaplinsky summarized, the message for industry participants is clear:
- The residential solar market is entering a more challenging and regulated phase
- Government scrutiny and private litigation are rising in tandem
- Compliance, transparency, and oversight are no longer optional, they are essential
Companies that proactively adapt to this new environment will be far better positioned than those that wait to respond under the pressure of an investigation or lawsuit.
Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm’s Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.
To listen to this episode, click here.
Consumer Financial Services Group
Introducing Our New Six-Part Podcast Mini-Series: Debt Sales 101
We are excited to announce the launch of a new six-part podcast mini-series focused on one of the most important and often misunderstood areas of consumer financial services: debt sales. A new episode will be released each Monday. This mini-series will run in addition to our regular Consumer Finance Monitor Podcast episodes, which will continue to be released on Thursdays.
Over the past several years, debt sales have evolved significantly. What was once viewed primarily as a back-end recovery tool is now a strategic lever that touches everything from balance sheet management and liquidity to regulatory risk, litigation exposure, and brand reputation. At the same time, the legal and compliance landscape governing these transactions has become more complex, more fragmented, and more consequential.
This mini-series is designed to provide a practical, end-to-end roadmap for understanding how debt sales actually work, both from a business and legal perspective. Drawing on real-world experience advising clients and executing transactions, we walk through the full life cycle of a debt sale and highlight where opportunities exist and where risks most often arise.
The series is co-hosted by Joseph Schuster, Partner in Ballard Spahr’s Consumer Financial Services Group, and Chris Eastman of Franklin Ross Strategies, bringing together both the legal and regulatory perspective and the commercial and operational perspective.
The Six Episodes:
- How Debt Sales Work and Why Companies Use Them
- What Can Be Sold? Understanding Eligible Debt and Portfolio Composition
- Who Buys Debt and How Deals Are Structured
- The Regulatory Landscape for Debt Sales Today
- Closing the Deal: Key Contracting and Transaction Issues
- After the Close: Compliance, Oversight, and Ongoing Risk
Each episode builds on the last, moving from foundational concepts to more advanced and practical considerations, including contracting, regulatory expectations, and post-sale oversight.
In the opening episode, we set the stage by answering a deceptively simple question: What is a debt sale? From there, we explore why companies sell debt, how these transactions are structured, and where legal and operational considerations intersect. It serves as the foundation for the rest of the series and is designed to be accessible to both newcomers and experienced practitioners.
Whether you are considering a debt sale program, actively managing one, or advising clients in this space, we hope this series provides clear and practical insights that you can apply immediately.
We are pleased to release Episode One of our new podcast mini-series, Debt Sales 101. In this first episode, we start with the fundamentals and discuss what a debt sale is, how these transactions are structured, and why companies choose to sell debt.
Debt sales are often discussed in simple terms, but in practice they sit at the intersection of business strategy, legal structure, and regulatory compliance. In this episode, we explain that a debt sale is fundamentally the sale of charged-off accounts where the seller transfers title and the right to collect to a debt buyer in exchange for an upfront payment. This is different from placing accounts with a collection agency or outsourcing collections. In a true debt sale, ownership of the account is transferred, and that distinction has important legal and operational consequences.
We also discuss several of the primary reasons companies sell debt. First, a debt sale allows a company to accelerate revenue and recognize recoveries immediately rather than over many years through traditional recovery strategies. Second, a debt sale generates immediate cash flow that companies can reinvest into their business. Third, for many companies, a debt sale is operationally simpler than building and maintaining an in-house recovery strategy or managing a large agency and legal network. Finally, in some cases, debt sales are used as a tool to exit a line of business in an orderly and efficient way.
From a legal perspective, we also introduce several concepts that are critical to a successful debt sale, including chain of title, documentation, data integrity, and the purchase and sale agreement. Buyers need to be able to trace ownership of the account, verify the underlying documentation, and rely on accurate data in order to collect on the accounts they purchase. These legal and documentation issues often determine whether a debt sale is successful and how a portfolio will be priced.
One of the key themes of this episode, and the series as a whole, is that debt sales are fundamentally a business decision, but one that lives or dies on legal execution and regulatory compliance. Companies that prepare properly, maintain strong documentation and data, and structure transactions carefully are far more likely to execute successful debt sale programs.
In our next episode, we will build on this foundation and discuss what types of debt can be sold, how portfolios are typically structured, and where the legal and practical boundaries begin to matter.
To listen to this episode, click here.
Consumer Financial Services GroupComing Soon: A Must-Listen Conversation With a Key New York Regulator
We’re pleased to offer an early preview of an upcoming episode of the Consumer Finance Monitor Podcast—and this is one you won’t want to miss.
We’ll soon be releasing a special episode featuring Max Dubin, Chief of Staff to the Acting Superintendent of Banking at the New York Department of Financial Services (DFS), in conversation with our host Alan Kaplinsky, the founder, former Chair, and now Senior Counsel of the Consumer Financial Services Group at Ballard Spahr. Max plays a central role in shaping policy at DFS, which is one of the most influential state financial regulators in the country, and his perspective is both timely and highly consequential for the consumer financial services industry.
In our conversation, Max shares insights into a range of critical issues, with a particular focus on the DFS’ proposed regulation of the fast-growing “buy now, pay later” (BNPL) business—an area that has drawn significant attention from regulators, industry participants, and consumer advocates alike.
Without giving away the full discussion, here are a few notable excerpts from what Max had to say about the proposed BNPL regulation:
“We’re not trying to fit BNPL into an outdated regulatory box—we’re trying to ensure the framework reflects the product as it actually exists today.”
“Our goal is to strike the right balance: fostering innovation while making sure consumers are protected from risks that may not always be obvious at the point of sale.”
“This is about transparency and accountability—making sure consumers understand what they’re signing up for, and that providers are operating on a level playing field.”
In addition to BNPL, our discussion also covers a range of other important topics, including DFS’ supervisory, regulatory, and enforcement priorities; emerging issues in consumer protection; the DFS’ approach to innovation and Fintech partnerships; coordination with federal regulators; and what industry participants should expect from DFS in the year ahead.
Throughout the episode, we explore how DFS is thinking about the evolution of BNPL products, the regulatory gaps it aims to address, and what these proposals could mean for providers, Fintechs, and traditional financial institutions.
This is a rare opportunity to hear directly from a senior official at DFS on one of the most closely watched regulatory initiatives in the country. Whether you are a lawyer, compliance professional, Fintech executive, or simply following developments in consumer finance, this episode will provide valuable perspective and practical takeaways.
Stay tuned for the full episode release next week—this is one conversation you’ll want to hear. Our podcast will be available on our website here or on all other major podcast platforms.
Alan S. KaplinskyFederal Judge Rules CFPB Must Continue to Ask Federal Reserve for Funds
In a decision that delivered a blistering rejection of the Trump administration’s CFPB plans, a federal judge has ruled that the Bureau must continue to request funds from the Federal Reserve Board.
The administration’s plans amounted to a “transparent attempt to ‘close down the agency,’” Judge Edward J. Davila of the Northern District of California said, in a lawsuit filed by three groups challenging the administration's decision not to request from the Fed funds for the CFPB. He said that the administration acted “arbitrarily, capriciously, and contrary to law” by adopting a legal opinion from the Office of Legal Counsel (OLC) stating that the CFPB may not request funding from the Fed. That opinion was based on a novel definition of the “combined earnings” of the Federal Reserve Banks as meaning profits and not revenues.
The judge issued an order granting summary judgment in favor of the three groups.
Davila’s ruling came in a suit filed by Rise Economy, the Woodstock Institute, and the National Community Reinvestment Coalition. The groups alleged that Acting CFPB Director Russell Vought decided not to act based on the OLC opinion that stated that the CFPB was not entitled to request any funds from the Fed because the Fed had no combined earnings. Due to the interest rate environment, the Fed began losing money in September 2022, although it has recently returned to profitability.
The OLC had relied on a narrow definition of “combined earnings,” the judge said. The dispute centers on whether the definition means profits, as the OLC argues, or revenues, as the groups challenging the CFPB’s decision maintain.
Davila said that Vought had acknowledged that the CFPB had spent down its reserves but decided he would not seek funds from the Fed because the Fed did not have combined earnings.
Davila said that Vought’s plan used a “clearly erroneous interpretation” that “frustrates Congress’ intent to insulate the Bureau’s funding stream from this exact transparent display of partisanship. The purpose of this Order is to ensure the CFPB operates as Congress intended—fully funded and able to ensure that consumers have access to ‘fair, transparent, and competitive’ markets for consumer financial products.”
Davila said that it is clear from the legislative history that Congress intended to create a steady stream of funding for the CFPB, recognizing the critical importance of its continued, uninterrupted work. He said the CFPB’s definition of combined earnings would not only destroy the agency’s independence by forcing it to ask Congress for appropriations, but would also subject the CFPB to intermittent defunding based on unpredictable fluctuations in ”the Federal Reserve’s balance sheet—where the CFPB would likely be deprived of its funding in times of nationwide economic upheaval, exactly when the need for its regulatory and consumer protection functions is most urgent.”
The court also held that Vought is required to request funds each quarter if such funds are reasonably needed to perform statutorily required functions. Significantly, as a preliminary matter, Davila held that the CFPB Director “has no authority to define or calculate the Federal Reserve’s ‘combined earnings’.” The judge observed that the government and the OLC Memo do not provide “any authority that would allow a director from a different agency, with no financial expertise or familiarity with the Federal Reserve System, to tell the Federal Reserve how to define their ‘combined earnings’ and calculate what those combined earnings are.” Davila concluded that because the Director has no authority to determine the Fed’s combined earnings, the government’s “basis for not requesting funding from the Federal Reserve crumbles.”
Judge Davila issued the following order: “The Court…Orders Defendants to continue requesting the amount determined by the Director to be reasonably necessary to carry out the authorities of the CFPB from the Federal Reserve….” It should be noted that the order is open-ended. It literally has no end date.
The decision strongly reinforces the earlier ruling by Judge Amy Berman Jackson in National Treasury Employees Union v. Vought. Judge Jackson held that that:
- The government’s interpretation of the statute was “contrary to the text and intent” of the Dodd-Frank Act.
- CFPB leadership must request funding from the Federal Reserve in order to comply with the law and the injunction preserving the agency.
On January 9, Vought notified Judge Jackson that, in response to her December 30, 2025, opinion in National Treasury Employees Union v. CFPB (DDC), he had requested $145 million from the Federal Reserve Board to operate the CFPB from January through March of this year. According to press reports, administration officials have indicated that before the end of March they will ask for funds for the next fiscal quarter, which begins on April 1. When he first requested the funds, Vought made it clear that he made the request despite his disagreement with Judge Jackson’s opinion. Despite his disagreement, the CFPB did not appeal Judge Jackson’s decision.
Based on that initial funding request, the CFPB has argued that a similar lawsuit filed in Federal District Court in Oregon by a consortium of Democratic state attorneys general is moot.
However, the state officials continue to press the lawsuit, since they claim that future funding is uncertain. They maintain that Vought’s decision may be challenged under the Administrative Procedure Act. In light of Judge Davila’s opinion ordering continuous funding, it seems to us that the Oregon lawsuit is moot.
We are still awaiting a decision of the en banc court in the D.C. District Court of Appeals with respect to the validity of Judge Jackson’s preliminary injunction.
Alan S. Kaplinsky, Richard J. Andreano, Jr., and John L. Culhane, Jr.
Senator Josh Hawley (R-MO) recently sent a letter to Fair Isaac Corporation announcing that as Chairman of the Senate Judiciary Subcommittee on Crime and as a member of the Subcommittee on Antitrust, Competition Policy, and Consumer Rights, he is investigating the company’s pricing practices in the mortgage credit scoring market.
Fair Isaac generates a consumer credit score known as FICO, which the Senator notes “dominates the credit scoring market with a product used by 90 percent of lenders, potentially commanding an even larger market share for first-time home buyers.” The Senator states that over the past five years the company increased its per-score wholesale royalty for mortgage originations from $0.60 to $10.00, and in 2026 doubled its per-score price from $4.95 to $10.00. He asserts that the per-score price increase has the potential to cost the mortgage industry approximately $500 million.
The Senator also states that the company’s “market dominance was not built solely through innovation. It was cemented by a regulatory framework that, for nearly three decades, required lenders selling to the government-sponsored enterprises to exclusively use FICO scores.” In July 2025, the Federal Housing Finance Agency announced that the enterprises were taking steps to permit lenders to use the VantageScore 4.0 model, offered by VantageScore Solutions, as an alternative to the FICO score.
Credit score costs and credit report costs often are passed on to mortgage applicants, and the Senator states that the credit score price increases “are most damaging to the Americans who can least afford them” and that first-time homebuyers “bear a disproportionate burden of the cost.” In particular, he notes that homebuyers often pay for three credit scores with each loan application, that first time homebuyers who are ultimately able to purchase a home may submit several loan applications before obtaining financing, and that some prospective homebuyers may pay for multiple credit scores but fail to qualify or never find a home they can afford.
The Senator also sent a letter to the Federal Trade Commission urging it to investigate the company’s credit score pricing practices.
The Mortgage Bankers Association has been critical of both credit score price increases and credit report price increases.
Richard J. Andreano, Jr. and John L. Culhane, Jr.Bipartisan Group of Senators Reintroduces Banker ‘Clawback’ Legislation
A bipartisan group of senators, led by Senate Banking, Housing, and Urban Affairs ranking Democrat Sen. Elizabeth Warren of Massachusetts, has introduced legislation that would require the FDIC to claw back compensation from failed banks with assets of $10 billion or more.
“The bill would require the Federal Deposit Insurance Corporation (FDIC) to hold executives of large failed banks—like Silicon Valley Bank, which failed three years ago…—financially responsible for some of the costs those failures impose on the rest of the banking system and the economy,” Warren’s office said, in outlining the bill, S. 4050. “The FDIC would have to claw back all, or part of the compensation large bank executives received over the three-year period preceding a bank’s failure.”
Joining Warren in introducing the legislation, known as the Failed Executives Clawback Act of 2026, were Republican Senators Josh Hawley of Missouri and Katie Britt of Alabama, and Democrats Catherine Cortez Masto and Ruben Gallego.
Similar legislation was introduced during the last Congress but was not enacted.
Warren’s staff said that the legislation would help ensure that big bank executives “are not allowed to collect massive paychecks and bonuses, disregard prudent risk management, and walk away scot-free if the bank blows up.”
“When big banks fail, weak regulators too often let the failed bank’s wealthy executives slip away into the night while American taxpayers foot the bill,” Warren said, in a statement. “This bill helps ensure that failed bank executives are held accountable for their risk-taking—and that they forfeit the huge bonuses they got while driving their bank into the ground.”
“Bank executives who make risky investments with customers’ money shouldn’t be permitted to profit in the good times, and then avoid financial consequences when things go south,” Hawley said, in a statement. “This legislation puts the executives’ own profits on the line, and that’s exactly as it should be.”
Although the legislation if passed into law may curtail risk, it may also discourage qualified executives from accepting appointments with insured depository institutions or make it hard for depository institutions under stress and in need of new management to recruit such management. Further, the legislation ignores the fact that some failures are caused by asset-quality deterioration over years that cannot reasonably be predicted or that occur under the eyes of examiners that have raised no issues.
NLRB Formally Withdraws Biden-Era Joint Employer Standard
On February 26, 2026, the National Labor Relations Board (NLRB or the Board) published a final rule formally withdrawing its 2023 joint employer regulation and reinstating the narrower 2020 standard for determining joint employer status under the National Labor Relations Act (NLRA).
Under the reinstated 2020 rule, joint employer status only will be found where “two employers share or codetermine the employees’ essential terms and conditions of employment.” An entity must possess and exercise “substantial direct and immediate control” over one or more essential terms of employment to warrant finding that the entity meaningfully affects matters relating to the employment relationship with those employees. The rule specifies that control will not be considered “substantial” if it is only exercised on a “sporadic, isolated, or de minimis basis.”
The rule enumerates eight categories of essential terms and conditions of employment and describes the manner of conduct that would constitute “direct and immediate control”:
- Wages. May be established where an entity actually determines the wage rates, salary, or other rate of pay that is paid to another employer’s employees.
- Benefits. May be established where an entity actually determines the fringe benefits to be provided or offered to another employer’s employees, such as selecting benefit plans or level of benefits. An entity merely allowing another employer, under an arms-length contract, to participate in its benefits plans is not sufficient.
- Hours of Work. May be established where an entity actually determines work schedules or the work hours, including overtime, of another employer’s employees. An entity merely establishing operating hours is not sufficient.
- Hiring. May be established where an entity actually determines which particular employees will be hired and which employees will not. An entity requesting changes in staffing levels or setting minimal hiring standards is not sufficient.
- Discharge. May be established where an entity actually decides to terminate the employment of another employer’s employee. An entity raising attention to misconduct or setting minimal standards of performance is not sufficient.
- Discipline. May be established where an entity actually decides to suspend or otherwise discipline another employer’s employee. The Board specifically notes that “refusing to allow another employer’s employee to access its premises or perform work under a contract” is not sufficient to establish this factor.
- Supervision. May be established where an entity actually instructs another employer’s employees how to perform their work or by actually issuing employee performance appraisals. An entity providing limited or routine instructions or “telling another employer’s employees what work to perform, or where and when to perform the work, but not how to perform it” is not sufficient.
- Direction. May be established where an entity assigns particular employees their individual work schedules, positions, and tasks. An entity merely setting schedules for completion of a project or describing the work to be accomplished on a project is not sufficient.
For employers who work with contractors or other third parties, the reinstatement of the 2020 rule reduces the risk that the NLRB will find joint employer status based solely on indirect control or contractual authority that is never exercised. However, employers should still review their contracts and day-to-day practices. The rule emphasizes actual conduct over contractual labels, meaning that even well-drafted agreements will not provide protection if an entity exercises substantial, direct, and immediate control in practice.
Ballard Spahr’s Labor and Employment Group regularly advises employers in labor matters and NLRB proceedings. We assist clients in assessing risk, responding to charges, and navigating changes in agency enforcement practices.
Shirley S. Lou-Magnuson, Brian D. Pedrow, and Mia KimOklahoma Passes Comprehensive State Privacy Legislation
On March 20, 2026, Oklahoma’s governor signed SB 546 making Oklahoma the latest state to enact a comprehensive state privacy law. The law, effective January 1, 2027, applies to organizations doing business in Oklahoma or targeting residents in Oklahoma that either (i) process 100,000 Oklahoma consumers’ personal data or (ii) process 25,000 Oklahoma consumers’ personal data and derive more than half of its revenue from selling personal data.
The law has similar notice, consumer rights, and vendor management obligations as those set forth in many other analogous state comprehensive privacy laws. For example, under the law, Oklahomans can request to access, correct, delete, and obtain copies of their personal data, as well as opt out of the sale of their personal data and certain targeted advertising practices.
There are, however, some notable differences between Oklahoma’s law and other state privacy laws. Unlike the approach adopted by most other states, Oklahoma narrowly defines “sale” as exchanges of personal data involving monetary consideration, while other states more broadly define sales to include exchanges of personal data for any valuable consideration. Additionally, Oklahoma, similar to Minnesota, has adopted a definition of “biometric data” that includes information generated from photo, audio, and video when that data is used to identify a specific individual. In contrast, most other states with comprehensive privacy laws expressly exclude this type of information from their definitions of biometric data.
The law will be enforced exclusively by the Oklahoma Attorney General. Following receipt of a notice of violation by the Oklahoma Attorney General, and if the violation is cured within the 30-day period, then the Attorney General will not bring a formal action.
Kelsey A. Fayer and Mudasar Pham-Khan
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