Payments and Financial Services Regulation and Litigation

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MPD has one of the world’s leading financial services practices focused on regulation and litigation in partnership with Global Economics Group, our sister company. Our team consists of former senior executives with deep industry and operational expertise, leading economic experts, and top legal and regulatory specialists. As a result we offer clients a cohesive blend of skills and experiences that provide integrated efficient, effective, and actionable advice.

Key areas are:

  • Thought leadership surrounding legislative proposals for regulation or regulatory proceedings concerning the implementation of regulations.  To help policymakers to reach the right decision—whether that’s passing a law or implementing a new rule—we examine the impact on job creation, consumer welfare, prices, and competition.  Our work often leads to white papers, expert reports, or academic articles.
  • Advisory work related to regulatory strategy for federal and state regulation of financial services. We work with clients on product development, compliance, responding to regulator exams and investigations, and assist on private litigation.
  • Behavioral-economics-based analysis. MPD’s behavioral economics experts help clients design products in light of possible regulatory examination by the CFPB and assist clients in responding to CFPB investigations and prosecutions. MPD’s economists work with several eminent law professors who specialize in the CFPB.
  • Price Manipulation Early Warning Screening.  MPD’s experts are world famous for developing methods for detecting whether employees on their own, or in concert with other firms, are attempting to manipulate prices such as interest rates.  These methods are also useful for assessing whether benchmark interest rates used in contracts have been manipulated.

Investments, Alliances, and IPOs.  MPD’s team combines deep regulatory acumen with profound subject matter expertise to evaluate various investment opportunities. Our team also includes former investment bankers who are experienced at evaluating investment opportunities and conducting detail modeling.

Mergers and Acquisitions. Our economists prepare submissions and make presentations to antitrust regulatory authorities in the US and other jurisdictions concerning merger applications. We have experience in filings before many leading authorities including the U.S. Department of Justice, Federal Trade Commission, European Commission, China’s MofCom, Brazil’s CADE, and the Australian Competition and Consumer Commission.

Expert Testimony. MPD team members are called on to provide expert testimony and reports on the financial services industry. MPD has economic and finance experts, with deep knowledge of various segments of the financial services industry as well an experts in products and operations.  Our experts have provided testimony in litigation and regulatory proceedings in multiple jurisdictions including the US, EU, Brazil, China, and Australia.

Past Projects

Behavioral Economics

MPD has been retained by several large financial institutions to develop design principles for products and services in light of the CFPB regulatory approach, which is strongly influenced by the field behavioral economics. MPD’s team consisted of behavioral economists, payment card professionals, and legal experts on the CFPB’s approach.

Regulation

To the dismay of the payments industry the Federal Reserve Board proposed draft rules in December 2010 that would have reduced debit interchange fees from an average of 44 cents to possibly as low as 7 cents per transaction. Shortly after that several large financial institutions asked MPD to conduct research on the impact of these rules on consumer welfare, small businesses, and small financial institutions. MPD’s team submitted four major submissions to the Federal Reserve Board that provided the foundations for backing away from the draconian reductions.

MPD experts were retained by the American Bankers Association in 2009 to assess the impact of the proposed Consumer Financial Protection Act. This work led to several highly influential papers by MPD Founder David S. Evans and Joshua Wright. Although the CFPA was passed as part of the Dodd-Frank Act, the U.S. Department of the Treasury and House Democrats agreed to eliminate some of the more extreme portions of the proposed legislation including the ability of the CFPB to design plain vanilla products. Evans has continued to play a leading role in the debate over the direction and possible reform of the CFPB including testimony before the House Oversight Committee.

Mergers, Acquisitions, and IPOs

MPD advised a multinational publicly traded company on strategic initiatives that involved potential acquisitions and partnerships around the world and helped identify and vet acquisition candidates and partners.

MPD advised a non-publicly traded payments company on strategic initiatives that could increase its value for an IPO or acquisition. Our work involved developing significant extensions of the company’s existing financial services to related markets.