Weekly Fintech Focus

  • The CFPB issues a policy statement to clarify the “abusiveness” standard.
  • CFPB proposes a settlement with payday lending company linked to tribal lender.
  • Visa will modify interchange rates the most in a decade.
  • ARRC releases checklist for transitioning from LIBOR to SOFR.
  • The Fed continues to move forward on faster payments and is working to more broadly address the digitalization of payments.
  • FinCEN’s Deputy Director discusses AML oversight in speech at the SIFMA Conference.


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Weekly Fintech Focus

  • New York City bans cashless stores, joining Philadelphia, San Francisco, New Jersey, and Massachusetts in a growing national trend.
  • The FTC continues to go after payment processors involved in facilitating deceptive and fraudulent schemes.
  • FDIC extends the deadline for comments on its Innovation Pilot Program after it receives no responses.
  • FICO announces a recalculated FICO Score for credit scoring.


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Weekly Fintech Focus

  • NYDFS creates a consumer protection task force to bolster its consumer protection activities.
  • CFPB issues its second no-action letter under its revised no-action letter policy. Both no-action letters relate to HUD’s housing counseling program.
  • CSBS releases Accountability Report on Fintech Developments.
  • Visa to acquire Plaid for $5.3 billion.
  • CFPB and the Utah AG to host joint office hours on 1/30 in Salt Lake City


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Weekly Fintech Focus

  • CA DBO cracks down on point-of-sale financing. Companies that offer deferred payment options at point-of-sale could be lenders in California.
  • The White House issues the world’s first binding guidance on regulating AI. Agencies should take a light-touch approach and consider how regulations promote the growth of AI.
  • State money transmission laws are in flux. Rhode Island just combined its laws governing electronic money transfers and sale of checks into one regime.
  • The FTC brought an action against a fuel card company for hidden fees.
  • The FTC announced that its recent data security orders will inform how it issues orders going forward, including more specific requirements for companies implementing safeguards to correct problems, more accountability for third-party assessors, and C-Suite compliance attestations for the company’s data security programs.


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FinCEN Director Discusses How FinCEN Uses BSA Data and the BSA Value Project

The Director of the Financial Crimes Enforcement Network (FinCEN), Kenneth A. Blanco, delivered prepared remarks at the American Bankers Association/American Bar Association Financial Crimes Enforcement Conference this week.  Mr. Blanco spoke on five key topics: (1) how FinCEN uses Bank Secrecy Act (BSA) data, (2) the status of the BSA Value Project, (3) the importance of beneficial ownership information, (4) the federal banking agency working group efforts, and (5) the realignment of FinCEN’s organizational structure.
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CFPB Proposes to Expand Certain Remittance Transfer Safe Harbors

To reduce compliance costs for certain banks, credit unions and other insured financial institutions, the Consumer Financial Protection Bureau (CFPB) proposed amendments to Regulation E to increase the safe-harbor available to insured financial institutions that provide a limited amount of remittance transfers from being categorized as a remittance transfer service provider.  Under the proposal, the limit on remittances would be raised from the current limit of 100 or fewer transfers in the prior year to 500 or fewer transfers.  Remittance transfers are generally defined as electronic transfers of money from a consumer in the United States to an international location.
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The Fed Chairman Comments on Potential for a US-backed Digital Currency

Jerome Powell, Chairman of the Federal Reserve, wrote to Congress this week discussing the merits of implementing a central bank digital currency (CBDC) in the U.S. The letter responds to a number of questions posed by lawmakers regarding the value that a digital currency would provide and implementation challenges that would need to be overcome. Two Congressmen had expressed concern that the U.S. is being left behind in the wake of technological advances.

Chairman Powell indicates that the U.S. is not currently developing a CBDC, but the Fed is monitoring development elsewhere. Chairman Powell noted that some of the motivating factors for  a digital currency in foreign countries do not necessarily exist in the U.S. Specifically, the demand for cash in the U.S. “remains robust” and there are fast and reliable digital payment services available that are not available in certain other countries.
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OCC to Host Innovation Office Hours During Money20/20

On October 28, 2019, the Office of the Comptroller of the Currency (“OCC”) will hold Innovation Office Hours in Las Vegas, Nevada at The Venetian Hotel during the Money20/20 conference (October 27-30).

During the Innovation Officer Hours, the OCC’s Office of Innovation staff meets one-on-one with fintech firms and other companies that partner with banks to discuss new products or services to facilitate responsible innovation in the federal banking system.  You can request an Office Hours session here until October 18, 2019.
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Increase to the Management Interlock Threshold Rule Approved

The Office of the Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System (the “Federal Reserve”), and the Federal Deposit Insurance Corporation (“FDIC”) approved a change to the thresholds in the major assets prohibition for management interlocks stated in the Depository Institution Management Interlocks Act (“DIMIA”). Prior to the final rule, the DIMIA prohibited a management official of a depository organization that had total assets exceeding $2.5 billion from simultaneously serving as a management official of an unaffiliated depository organization that had total assets exceeding $1.5 billion (referred to as the “major assets prohibition”). The approved change now increases the respective $2.5 billion and $1.5 billion thresholds to $10 billion each.
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CFPB and FTC to Host Credit Reporting Accuracy Workshop

The Federal Trade Commission (“FTC”) and the Consumer Financial Protection Bureau (“CFPB”) recently announced that they will be hosting a public workshop on December 10, 2019 to discuss issues related to the accuracy of credit reports and background screening reports for employment and housing rental purposes. The FTC published a study on accuracy in credit reporting in 2012, the same year the CFPB began supervising large credit reporting agencies (“CRAs”) and furnishers of credit reports. Additionally, a 2015 multi-state settlement required CRAs to follow stricter standards for accuracy in credit reports. The workshop will include numerous stakeholders, including industry representatives, consumer advocates, and regulators. Comments may be submitted to the FTC until January 10, 2020 about topics for discussion during the workshop. If you would like to review any comment with us, please contact Sam Boro (SBoro@perkinscoie.com) or Nick Lundgren (NLundgren@perkinscoie.com).
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