Pub. 11 2016-2017 Issue 6

March/April 2017 15 Extraordinary Service for Extraordinary Members. we’re Always CLOSE BY NetWorks is the Electronic Funds Transfer (EFT) service provider that Nebraskans have used and learned to trust like family for over 30 years. Since our offices are right here in Nebraska, you can count on us to provide quick and personalized service for all of your EFT needs. Give us a call and let’s talk about how we can simplify EFT for you. You will talk with a fellow Nebraskan and not some automated system. www.netseft.com Toll Free 800-735-6833 Local 402-434-8202 For more information, contact Bryan Handlos at Kutak Rock LLP at (402) 346-6000 or bryan. handlos@kutakrock. com. Handlos is a member of Kutak Rock LLP’s banking practice group where he concentrates on bank regulatory matters. The CFPB obviously has a mission and is focused on protecting con- sumers. Assuming the CFPB is not eradicated or entirely defanged as a consumer protection agency by the new administration and Congress, debate over the CFPB’s enforcement practices may continue. If this is “regulation by enforce- ment,” what is the best way to exercise that kind of power? Orders like this might arguably be improved by giving more consideration to their usefulness to an audience of institutions trying to read their tea leaves to govern their future actions. If negligence is the actionable theory, it would be help- ful to include an explicit statement of the required standard of care 8 along with a clearer indication of how the institutions involved specifically fell short of that standard. Discussion of the CFPB’s cost-benefit analysis also could be helpful. For example, are banks really expected to make the time and dollar commitment neces- sary to engage a third party to conduct an advance audit of a conversion plan? If negligence is not the theory, and there is no room for error, a clearer statement of that policy would allow for better understanding and perhaps allow for open debate on its validity and efficacy. In the end, this is just one data point on the spectrum of CFPB actions that banks must consider in the never- ending task of risk management. There are many reasons that most bank technology implementations should be distinguishable from the situation with RushCard. Hopefully, the sky is not falling. There are les- sons to be learned nonetheless, and no bank wants their customers sitting in the dark.  1 In fairness to Simmons, it also has been reported that he used some of his personal fortune to cover customers’ expenses. 2 RushCard has since been sold to another company, and the RushCard is, at the time of this writing, a Visa card. The purchaser of the RushCard suffered a similar service disruption on some of its other cards last year. 3 Although UniRush and MasterCard stipulated to the CFPB Consent Order, they did not admit the facts contained therein. 4 Banks applying these requirements to their own situations also should consider the creation and retention of appropriate documentation of their efforts. 5 See generally, Maureen K. Ohlhausen, Weigh the Label, Not the Tractor: What Goes on the Scale in an FTC Unfairness Cost-Benefit Analysis, 83 Geo. Wash. L. Rev. 1999 (Nov. 2015). 6 See 12 U.S.C. §5531(c). 7 See Ohlhausen, supra. 8 It must be acknowledged that bright-line rules likely will never exist (they would also be argued to shade over into the other “evil” of overregulation).