Is there any industry that seems happy with the new financial reform bill? Definitely. Some attorneys are making it very clear they welcome the flood of new business that the recently signed Restoring American Financial Stability Act (RAFS) will bring…and already has brought.
“It’s terrible news for our clients, but as is so often the case with what we do as lawyers, it is really something that is very helpful to lawyers who specialize in this area,” Alan S. Kaplinsky, a partner at Ballard Spahr LLP, told Law.com. “It has already created a huge amount of work and we haven’t even begun to see the full effects of the law.”
Ballard Spahr has assembled a task force to centralize the work coming in long before President Obama signed the bill on July 21. The task force has attorneys handling matters by the industries that will be most affected: insurance, banking, consumer protection, credit rating agencies, derivatives, and other financial sectors.
Before RAFS was passed by Congress, Kaplinsky, who heads the consumer financial services group at Ballard Spahr, told Law.com that his firm already had approximately a dozen projects exploring for clients how RAFS was going to affect them. Other clients have hired the firm to determine the constitutionality of the law. A key concern for these clients, said Kaplinsky, is the power that will be concentrated in the hands of a yet-to-be-named director of the newly created Consumer Financial Protection Bureau (CFPB).
Michael E. Bleier is an attorney with Reed Smith LLP. Bleier’s experience includes 11 years with the Federal Reserve and another 25 years with Mellon Bank. He told Law.com that he is watching as a new crop of attorneys are wading through the legislation and the changes it will bring to certain industries – mainly financial services and banks.
“This whole bill creates a whole new realm of legal work,” Bleier told reporters. “I tell our junior lawyers here that this is a great time to be practicing banking law.”
Bleier told reporters that he expected consolidation to be a “clear consequence” of this legislation. As banks are required to meet new regulations, small community banks might not be able to absorb the added costs associated with meeting those regulations.
Now that more light is being shed on the legislation, law firms are holding seminars for current and prospective clients to advise them about what to expect.
RAFS and the ABA
What's more, the RAFS has created the CFPB to oversee numerous bills that will impact consumers. While the bill was still in the making, the American Bar Association (ABA), among others, lobbied heavily to ensure that the legal profession was exempted from the reach of the CFPB.
“The American Bar Association and its nearly 400,000 members – indeed, all practicing lawyers in the United States – are gratified that the House and Senate conferees on the financial markets reform legislation have recognized the importance of maintaining the historic role of state supreme courts’ regulatory authority over the practice of law,” Carolyn Lamm, president of the ABA, said in a statement.
Emphasizing the point that attorneys already are regulated by codes of professional conduct, Lamm expressed the ABA’s opinion that the practice of law should not come under the authority of the CFPB.
“There is no need for a federal layer of regulatory authority over these lawyers, as was first proposed in this legislation, and the ABA, along with state and local bars and our concerned members, has been diligent in engaging and assisting Congress on this subject. Our efforts have paid off,” Lamm said.
How the RAFS Act will affect the general public is still unknown. But one thing seems certain: It’s a good time to be a lawyer.