Tips for Administering Regulatory Settlements

A regulatory settlement is an agreement between a defendant and a regulatory body, such as the Federal Trade Commission (FTC), the Department of Justice (DOJ), or the Department of Labor (DOL), to bring a formal investigation to an end. A regulatory settlement is not a class action lawsuit.

State regulatory agreements can be settled with an Assurance of Discontinuance, while federal regulatory agreements are settled with a Consent Order. A regulatory settlement offers flexibility beyond normal disciplinary sanctions. The regulated entity may agree to pay compensation directly to its customers or agree to accept operational changes and increased reporting to the regulatory agency. In many cases, a regulatory settlement can resolve the matter — in whole or at least in part — to the benefit of all parties.  

Tips for Regulatory Settlements

Best practices for regulatory settlementsinclude:

• Be proactive by initiating settlement negotiations.
• Avoid reputational damage by proposing a settlement that reduces or avoids disciplinary sanctions.
• Identify mitigating circumstances to present a more favorable light.
• Keep costs low by negotiating early.

Regulatory Settlement Services

Our team provides robust regulatory settlement services to satisfy the most complex government enforcement actions. In  2013, we assisted Ally Financial Inc. implement their Consent Orders with the Consumer Financial Protection Bureau and the Civil Rights Division of the Department of Justice after Ally was alleged to have violated the Equal Credit Opportunity Act through its auto loan lending practices. With no admission of wrongdoing, Ally chose to enter in a settlement to avoid contested litigation while continuing to serve their customers. They agreed to pay $80 million in damages and agreed to accept various types of Injunctive Relief.

In administering these Consent Orders, our team-

• Worked with three different categories of consumers
• Crafted a notice program that included multilingual mailed Notice packages, a settlement website, and a multilingual hotline.
• Fielded inquiries in Mandarin, Cantonese, Vietnamese, Korean, Tagalog, Spanish, and English.
• Maintained an in-house contact center with live phone operators, IVR system, and TTY relay services.
• Answered 75,000 incoming calls and placed a half-million outbound calls to consumers.
• Provided experienced, innovative consulting services that resulted in successfully distributing over 95% of the Settlement Fund to consumers.