Travis Nelson to Speak on BSA/AML Enforcement and Cannabis Banking at NJ Bankers Conference

On Wednesday, June 20, 2018, Travis Nelson, a partner in Reed Smith’s Financial Services Regulatory Group, will present a lecture at the 2018 New Jersey Bankers Association’s Compliance University on two hot topics in bank regulation.  In the area of Cannabis Banking, the current political and regulatory environment has left many banks and their legal and compliance departments dazed and confused over whether or not they may serve this rapidly emerging industry.  This issue is complicated by the fact that there is no “typical” marijuana-related business against which banks can design their cannabis lending policy, or evaluate their cannabis lending risk.  In the area of BSA/AML enforcement, now more than ever banks and their compliance officers need to appreciate the risk of federal examination and enforcement of anti-money laundering laws.  Not only does BSA/AML enforcement pose significant reputational risk for banks, but also a comparatively heightened risk for enforcement actions against compliance and BSA officers personally.

Travis Nelson is a partner resident in the Princeton and Philadelphia offices of Reed Smith, Co-Chair of the Firm’s Anti-Money Laundering & Trade Sanctions Group, and Vice-Chair of the Firm’s Cannabis Law Team.  Travis’ practice focuses on bank corporate transactions, consumer and non-consumer bank regulation, examinations and enforcement defense, BSA/AML compliance, and more.  Prior to joining Reed Smith, Travis served in the Enforcement Division of the Office of the Comptroller of the Currency, the U.S. Treasury Department agency that regulates federally-chartered banks.  Travis is also Chair of the New Jersey State Bar Association’s Banking Law Section, adjunct faculty at Villanova Law School and Temple Law School where he teaches courses on financial services regulation, and an active speaker on banking issues at national and regional banking conferences.

For information on registering for the conference, see:  https://www.njbankers.com/Shared_Content/Events/Event_Display.aspx?EventKey=2018COMPL

Travis Nelson Re-Elected Chair of New Jersey Bar Association’s Banking Law Section

At the recent Annual Meeting of the New Jersey State Bar Association, Travis Nelson was re-elected Chair of the Banking Law Section. Travis, a partner in the firm’s Princeton and Philadelphia offices, previously served as Vice Chair and Secretary of the Banking Law Section.  Upon his re-election, Travis noted: “Over the course of the past year, we have increased the size of our Section’s leadership team, added new junior attorneys to help usher-in the next generation of banking law professionals, and worked to build partnerships with other stakeholders around the bar association and the region.”  Travis further outlined his priorities for his second term: “I look forward to increasing our relationships with the New Jersey Bankers Association, regional bar associations, and working with my counterparts in the Philadelphia Bar Association and the City Bar of New York to increase dialog on key banking issues impacting our nation and our region.  I also plan to steer the Section to focus more on including in-house counsel and current law students into the Section’s committees and events.”

Len Bernstein, Chair of Reed Smith’s Financial Services Regulatory Group, and a former Chair of the NJ Bar’s Banking Law Section, said: “Travis has been a vital member of our banking team, and we look forward to supporting him in his efforts to increase the discussion of emerging issues throughout the New Jersey banking community. From commercial lending, to consumer finance, to bank M&A, to financial technology, to regulatory enforcement, the Banking Law Section will benefit from the broad experience and expertise that Travis brings to this leadership role.”  Paul Jaskot, a member of the Firm’s Executive Committee who regularly works with Travis in leading the Firm’s bank M&A practice, noted: “Travis’ re-election as chair of the New Jersey Bar’s Banking Law Section reflects our team’s thought leadership in the financial services industry, and I congratulate him on this achievement.”

Travis serves financial institutions, and their directors and officers, in M&A transactions, regulatory compliance, examinations and enforcement, and litigation. Prior to joining Reed Smith, Travis served in the Enforcement Division at the Office of the Comptroller of the Currency, in Washington, D.C.  Travis is also adjunct faculty at the Villanova University School of Law, where he teaches a course on regulation of financial institutions, is co-editor of the ABA’s Banking Law Committee Journal, and is a frequent speaker on bank regulatory and enforcement issues.  In addition to his bank regulatory practice, Travis is the Co-Chair of Reed Smith’s Anti-Money Laundering and Trade Sanctions Group, and Vice-Chair of the Firm’s Cannabis Law Team.

State Attorneys General Zero in on Elder Abuse, Financial Exploitation

The 2018 National Association of Attorneys General (NAAG) Presidential Initiative, “Protecting America’s Seniors: Attorneys General United Against Elder Abuse,” has come to a close with a summit held April 17-18 in Manhattan, Kansas, capping off an eight-month campaign during which state AG offices have augmented and sharpened their tools for investigating exploitation of this vulnerable population.

The initiative, selected by current NAAG president  Derek Schmidt, Kansas Attorney General, has brought AGs from around the country together to build state expertise on this issue and to fight elder abuse, neglect and exploitation. It has included a focus on financial exploitation as part of a broader look at how financial services industry interacts with the elderly.

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Proposed TRID Title Insurance Clarification: Senator Warren Cries Wolf

Recently, I came across an article written by Senator Elizabeth Warren entitled “Don’t Make Bad Bill on Bank Deregulation Worse.”  In this article, the Senator warned against efforts by the House to add additional deregulation measures to the bill that was approved by the Senate (S-2155, “The Economic Growth, Regulatory Relief and Consumer Protection Act”), opining that such efforts, if successful, would make the Senate bill even more dangerous than it already was.

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New Jersey AG Attempts to Fill Perceived Void Left By CFPB Retrenchment

On March 27, 2018, the New Jersey Attorney General, Gurbir S. Grewal, announced the appointment of Paul R. Rodriguez to be the new Director of the New Jersey Division of Consumer Affairs.  Mr. Rodriguez, a New Jersey native, previously served as Acting Council for New York City Mayor, Bill de Blasio, and a member of his senior management team.  Before that, he was an associate at Simpson, Thatcher & Bartlett, LLP in New York City.  He is a New Jersey native and a Yale Law graduate.

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Want to Vent About Regulations Adopted By the CFPB?

The CFPB recently issued a formal invitation (a Request for Information [RFI] for you to do just that, as well as to comment about any of the new regulatory authorities given to the CFPB by the Dodd-Frank Act.  In its March 14 press release about the RFI, the CFPB indicates that the RFI’s purpose to assist the CFPB in considering whether it should amend any rules it has issued since its creation or issue rules under new rulemaking authority provided for by the Dodd-Frank Act and to provide an opportunity for the public to submit feedback and suggest ways to improve outcomes for both consumers and covered entities.

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California City to Explore Blockchain-Based Financing

The City of Berkeley, California will be the first U.S. city to explore blockchain-based financing to tackle social issues such as affordable housing.  Mayor Jesse Arreguin and Councilmember Ben Bartlett are collaborating with the UC Berkeley Blockchain Lab and San Francisco-based financial startup Neighborly for the Berkeley Blockchain Initiative (“BBI”) to develop a tokenized municipal bond.  According to Forbes, Berkeley had a similar idea twenty years ago with a local currency called “Berkeley Bucks.”  This time, Neighborly explains, “[t]he initiative will explore how to harness the power of blockchain and cryptocurrencies to democratize access to public finance and improve social outcomes.”

 

Read the full report on our sister site, the FinTech Update.

With States Stepping Up Enforcement, Mulvaney Offers CFPB’s Partnership and Deference

Consumer Financial Protection Bureau (“CFPB”) Director Mick Mulvaney spoke to the National Association of Attorneys General winter meeting in D.C. on February 28, addressing the agency’s priorities under his leadership. He emphasized the different role that the CFPB will be playing under the Trump Administration, focusing mostly on targeting clearly illegal acts rather than making new law or policy, and said that he will be relying more on the states to take the lead in enforcement. Several Democratic AGs visibly grimaced during his remarks, particularly when he described the differences between his priorities and those of his predecessor, former CFPB director Richard Cordray, who had served as the Democratic AG of Ohio prior to his CFBP tenure and who brought many staffers to the agency who had previously held career consumer protection positions at various state AG offices.

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Statement Released That Multiple Crypto Exchanges Warned by Hong Kong Securities Commission

On February 9, 2018, the Hong Kong Securities and Futures Commission (“SFC”) released a statement which, among other things, informs the marketplace that the SFC sent letters to seven Hong Kong cryptocurrency exchanges warning against listing instruments that qualify as “securities” under the Securities and Futures Ordinance (“SFO”) without a required license.[1]  Additionally, the SFC sent letters to seven crypto token issuers inquiring about compliance with the securities laws.

In response to the letters, most cryptocurrency exchanges and initial coin offering (“ICO”) crypto token issuers either confirmed compliance or immediately took remedial measures,  according to the SFC statement.

To read the full post, please visit our sister site, The FinTech Update.

Treasury Secretary Suggests Greener Pastures for Marijuana Banking

On Tuesday February 6, 2018, U.S. Treasury Secretary Steven Mnuchin, in a speech before the House Financial Services Committee, offered some insights into how the Treasury Department may respond the growing area of marijuana banking. As we reported in a January 5th client alert, the Justice Department rescinded Obama-era policies that provided guidance to federal prosecutors on marijuana enforcement in states where the distribution of marijuana is legal under state law. Those Obama-era policies guided prosecutors to commit scarce federal resources to those areas where the public harm is the greatest, such as selling marijuana to children, using violent crime in operating a marijuana business, transporting marijuana from those states where it is legal to those states where it is not, and distributing marijuana on federal land. The Justice Department’s rescission of the Obama-era policies not only created uncertainty as to whether marijuana businesses in states where it is legal may continue to operate unobstructed by federal law enforcement, but also called into question the continued validity of the marijuana banking guidance issued by the Financial Crimes Enforcement Network (FinCEN) in 2014 that gave banks some flexibility in providing account and payment services to the marijuana industry.

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