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Jonathan L. Pompan

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Jonathan Pompan is co-chair of the firm's Consumer Financial Services Practice Group and Consumer Financial Protection Bureau (CFPB) Task Force. Jonathan's practice focuses on providing comprehensive legal advice and regulatory advocacy to a broad spectrum of clients, such as nonbank financial products and services providers, advertisers and marketers, and trade and professional associations, before the CFPB, the Federal Trade Commission (FTC), state attorneys general, and regulatory agencies. At a time when government consumer protection agencies are stepping up their scrutiny, Jonathan develops strong and lasting relationships with clients by understanding their business objectives, helping them recognize opportunities and avoid legal pitfalls.

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New York attorney general Leticia James is the latest state-level actor to respond to the Trump administration’s efforts to shrink federal consumer protection agencies. James has championed the FAIR Business Practices Act, a bill introduced in the New York state legislature aimed at expanding the New York consumer protection statutes to include unfair and abusive practices.

According to James, the FAIR Business Practices Act would “close loopholes” in New York’s current consumer protection scheme and enhance the enforcement capabilities of the Office of the Attorney General. If enacted, the bill would enable the attorney general to pursue civil penalties and restitution for violations of the act, such as:Continue Reading New York Seeks to Beef up Consumer Protection Framework

If you’ve been focused on only the high-level statements from the CFPB, you might already expect Rohit Chopra to fashion himself and the agency as “pro-consumer.” Consistent with that approach, the agency just signaled its distaste for, and desire to severely restrict, the common and useful advertising practices of comparison-shopping platforms and lead generation.

Using its bully pulpit (and not notice and comment regulation or waiting for explicit legal authority), the CFPB released a Consumer Financial Protection Circular, stating that operators of digital comparison-shopping tools (“Operators”) and lead generators can violate the Consumer Financial Protection Act’s (CFPA) prohibition on abusive acts or practices if they steer consumers to certain products or services—or certain providers—based on compensation received by the lead generator or Operator. This might feel like standard consumer protection-speak, except that equating compensation models to abusive conduct means that the CFPB has performance advertising in its crosshairs.

In its press release announcing the circular, the CFPB explains, “[T]he guidance discusses how regulators and law enforcement agencies can evaluate operators of comparison-shopping tools that accept payments from financial firms to manipulate results or suppress options that may better fit the consumer’s stated preferences.” In the same release, the CFPB also announced that it would be “developing a consumer-facing tool that, once finished, will bring more transparency to credit card comparison-shopping.”Continue Reading Why the CFPB’s Preferencing and Steering Practices Circular Should Scare Lead Generators and Consumer Financial Services Providers

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of lead generation in this week’s episode.

In the evolving world of lead generation and performance-based customer acquisition, the quest for profits can lead to big legal risks, some of them too large for advertisers that buy leads through third parties. Advertisers that harness the power of lead generation should consider the best practices listed below to mitigate legal risk.

Lead generation best practices:

Understand basic advertising law. Advertising must be truthful and not misleading. Marketers and lead generators should understand what can make an advertising claim “deceptive,” as well as the appropriate use of disclaimers.Continue Reading Lead Generation: An Excerpt from the Advertising Law Tool Kit

The Federal Communications Commission (FCC) adopted a revised rule to restrict forms of lead generation involving texts and calls to consumers on December 13, 2023. The revised rule implementing the Telephone Consumer Protection Act (TCPA) will require one-to-one consent for certain types of regulated calls and texts—so-called robotexts and robocalls.

The new rule will take effect 12 months after publication in the Federal Register, or 30 days after announcement in the Federal Register of the Paperwork Reduction Act approval of the restrictions on information collection prescribed by this new rule, whichever is later, around January 2025.

The rule requires that, to obtain “prior express written consent” under the TCPA, consumers must give their consent to receive calls and texts from the specific sellers they wish to contact them (i.e., “one-to-one consent”). According to the FCC, this requirement ensures that consumers consent only to contact by sellers they wish to hear from.Continue Reading FCC Adopts Rule Closing the Lead Generator Loophole

The Federal Trade Commission (FTC) announced it has reached a settlement with the bankrupt crypto company Voyager over the company’s alleged deceptive crypto marketing practices. Specifically, the FTC’s complaint alleges that from at least 2018 until its declaration of bankruptcy in July 2022, Voyager enticed consumers with promises that their deposits were insured by the Federal Deposit Insurance Corporation (FDIC) and were “safe.” However, consumers’ deposits with Voyager were not eligible for FDIC insurance and were not protected in the event that Voyager failed.

The FDIC only insures deposits held by insured banks or savings associations, and only up to certain limits. Voyager, however, is not a chartered bank or savings association. While Voyager’s bank partner was FDIC-insured, FDIC deposit insurance protects deposits only in the event of the insured institution’s failure, not the failure of a non-bank partner in the event of that company’s failure. According to the FTC, Voyager’s false assurance lured customers into entrusting their funds to the company, resulting in significant losses for those affected by the company’s bankruptcy in July 2022.Continue Reading FTC Settles with Bankrupt Crypto Company, but Pursues CEO for Deceptive FDIC Claims

Marketers and lead generators have new guidance in the form of enforcement orders on what the Federal Trade Commission (FTC) appears to consider required practice when obtaining consumer consent prior to the sale, transfer, or disclosure of consumer information that will be used in marketing.

The upshot is that the FTC provided several affirmative requirements…

On June 16, 2023, the Federal Deposit Insurance Corporation (FDIC) released an update to its Supervisory Guidance on Multiple Re-Presentment NSF Fees (FIL-40-2022) (the “Guidance”), to provide additional guidance for supervised institutions on the consumer compliance risks associated with assessing multiple non-sufficient funds (NSF) fees for the re-presentment of unpaid transactions. This alert discusses the potential risks the FDIC identified and outlines the risk mitigation practices that supervised institutions can implement to mitigate risks when processing multiple re-presentment NSF fees.

Although the Guidance’s applicability is limited to FDIC supervised institutions, the information provided on potential risks and mitigation practices should be taken into consideration by any financial institutions or merchants that assess multiple re-presentment NSF fees in connection with billing consumers.Continue Reading FDIC Releases Revised Supervisory Guidance on Multiple Re-Presentment NSF Fees

On February 27, 2023, the Supreme Court granted the certiorari petition of the Consumer Financial Protection Bureau (CFPB) to hear a case that could cast doubt on all of the regulations that have been promulgated by the bureau to date, as well as all pending investigations and litigation brought by the agency.

The Court will consider in Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America (CFSA) whether the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution, which says, “no money shall be drawn from the Treasury, but in consequence of appropriations made by the law.”Continue Reading Supreme Court Agrees to Hear Case Involving CFPB Funding

The Consumer Financial Protection Bureau (CFPB) has moved to curb digital mortgage comparison-shopping platforms from receiving referral fees, issuing an advisory opinion that outlines how companies violate the Real Estate Settlement Procedures Act (RESPA) when “they steer shoppers to lenders by using pay-to-play tactics rather than providing shoppers with comprehensive and objective information.” The advisory is a warning to digital marketing platforms of the potential consequences of business relationships with mortgage lenders. The CFPB has a direct sightline into the marketing activities of mortgage lenders though supervision and routine examinations, and has already put a target on digital marketing providers.

The CFPB’s advisory opinion describes how platform operations can violate Section 8 of RESPA by enhancing the placement of lenders or related service providers on the digital platforms, or by otherwise steering consumers to those lenders or service providers. in addition, the opinion provides illustrative examples.Continue Reading CFPB Warns Digital Mortgage Comparison-Shopping Platforms About Referral Fees and Pay-to-Play Advertising

The Consumer Financial Protection Bureau (CFPB) has once again been found to be unconstitutionally structured. The ruling is a win for CFPB critics and calls into question most actions taken by the agency.

A unanimous three-judge panel of the U.S. Court of Appeals for the Fifth Circuit held on Wednesday that the CFPB’s funding mechanism, funded by fees generated by Federal Reserve Board not through Congressional appropriations, is unconstitutional. According to the court, the CFPB’s funding is double insulated from Congress and, thus, is unaccountable to both Congress and the public. As such, the CFPB’s funding mechanism violates the Constitution’s separation of powers design and, specifically, the Appropriations Clause.Continue Reading Federal Appeals Court Finds CFPB Unconstitutionally Funded, Structured