Archives: Financial Services Regulation – U.S.

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ISDA Considers the Suitability of Swaps Documentation to the Blockchain

On August 3, 2017, the International Swaps and Derivatives Association (“ISDA”) released a whitepaper that considers whether derivative contracts could operate on a blockchain (the “Whitepaper”).[1]  The Whitepaper, titled “Smart Contracts and Distributed Ledger – A Legal Perspective,” concludes that many of the provisions of the ISDA Master Agreement and related documentation can be translated … Continue Reading

Robert Jaworski to Speak on TRID Compliance at MBA Conference

Bob Jaworski will be speaking at the Mortgage Bankers Association of America’s annual Regulatory Compliance Conference in Washington, D.C.. The conference will be held on September 17-19, 2017 at the Grand Hyatt, Washington. Bob will be part of a Monday afternoon panel on “TRID Compliance Issues,” which will look at the major issues faced by compliance … Continue Reading

Nevada Passes FinTech Law

A number of states have jumped into the FinTech fray by enacting legislation or issuing guidance regarding new technologies and digital currencies. The latest of these technology-forward states is Nevada. Following the example set by Arizona, Nevada recently passed a bill clarifying blockchain’s legal status under state law. The law, Senate Bill 398, was signed … Continue Reading

New Jersey Giveth And Taketh Away: Recent Steps to Reduce And To Increase Regulatory Burden On Home Mortgage Lenders

Recently, the State of New Jersey has taken a small step in the direction of less regulation over home mortgage lenders and, virtually at the same time, a potentially more significant step in the opposite direction. Details are set forth below. NJDOBI Proposes to Eliminate a Regulation Yes, you read that right! On June 5, … Continue Reading

New Policies Released Under the Illinois Transmitters of Money Act

On June 13, 2017, the Illinois Department of Financial and Professional Regulation (“IDFPR”) released guidance outlining its policies with respect to the treatment of digital currencies under the Illinois Transmitters of Money Act (“TOMA”).  The guidance document offers a clear distinction between traditional currencies, which it considers “money,” and digital currencies, which it states are … Continue Reading

Agencies Offer Solutions to Shortage of Residential Real Estate Appraisers

On May 31, 2017, acting through interagency guidance, the federal bank regulatory agencies (the “Agencies”) highlighted two approaches for addressing a perceived scarcity of licensed residential real estate appraisers. Federal law requires use of a state certified or licensed appraiser for most federally related transactions (“FRTs”).  For example, federal regulations require appraisals to be conducted … Continue Reading

Travis Nelson Elected Chair of New Jersey State Bar Banking Law Section

On May 19, 2017, at the Annual Meeting of the New Jersey State Bar Association, Travis Nelson was elected Chair of the Banking Law Section. Travis, who is resident in the firm’s Princeton and New York offices, previously served as Vice Chair and Secretary of the Banking Law Section.  Upon his election, Travis noted: “I … Continue Reading

“LabCFTC” Launched by the CFTC

On May 17, 2017, Commodity Futures Trading Commission (“CFTC”) Acting Chairman J. Christopher Giancarlo announced an “important step forward” in bringing the CFTC’s regulations into the “digital world of the 21st century.”  The CFTC’s new FinTech initiative, LabCFTC, will facilitate cooperation between the CFTC and FinTech innovators. Read Reed Smith’s full report on our sister … Continue Reading

D.C. Circuit Court Strikes Opt-Out Notice Requirement For Certain Faxes

On Friday, in a decision certain to please the business community as well as the Chair and new majority of the Federal Communications Committee, the D.C. Circuit struck down parts of the FCC’s October 30, 2014 Order, 29 F.C.C. Rcd. 13998 (FCC 14-164), requiring that solicited faxes (those sent with consent of the recipient) must … Continue Reading

Second Bitcoin ETF Rejected by SEC

On March 28, 2017, the U.S. Securities Exchange Commission (“SEC”) issued a second denial of a bitcoin exchange-traded fund (“ETF”), following its rejection of the Winklevoss Bitcoin Trust earlier this month (Reed Smith commentary is available here). SolidX Bitcoin Trust would hold bitcoin as its primary asset, together with smaller amounts of cash.  Theft of … Continue Reading

SEC Rejects Bitcoin ETF Proposal Citing Lack of Regulation

On March 10, 2017, the U.S. Securities Exchange Commission (“SEC“) issued an order disapproving BATS BZX Exchange’s proposal to list and trade shares of the Winklevoss Bitcoin Trust. The proposal, if granted, would have established a bitcoin exchange-traded fund (“ETF“) that market participants could invest in through the BATS BZX Exchange platform. The SEC rejected … Continue Reading

Alternative Data and Credit Scores: Will it Trigger CFPB Enforcement?

The Consumer Financial Protection Bureau (“CFPB” or “Bureau”) recently announced an effort to better understand how “alternative data” could be used to expand access to credit. Through a formal notice and request for information just published, the CFPB is trying to learn more about the potential to use of what it calls “non-traditional” or “alternative” … Continue Reading

NY Proposed Budget Would Expand NYDFS Authority over FinTech Lending Companies

Lender license requirements recently included in the New York governor’s proposed 2017-2018 budget would expand the jurisdiction of the New York State Department of Financial Services (NYDFS) to cover many financial technology (FinTech) credit-lending companies that are currently exempt from license requirements.  The proposed budget would prohibit businesses that are not registered as licensed lenders … Continue Reading

ESMA Publishes Report on Distributed Ledger Technology

On February 7, 2017, the European Securities and Markets Authority (“ESMA”) released a Report on Distributed Ledger Technology (“DLT”) (also known as “blockchain” technology) Applied to Securities Markets (the “Report”) that considers DLT’s effect on securities markets and fit to existing regulatory infrastructure.  The Report ultimately concludes that while many of the laws and regulations … Continue Reading

FINRA Issues Report on Distributed Ledger Technology

The Financial Industry Regulatory Authority (“FINRA”) published a report on January 18, 2017, regarding Distributed Ledger Technology (“DLT”) (also known as blockchain technology) that provides an overview of different DLT use cases and related regulatory considerations for market participants (the “Report”).  The Report provides valuable guidance to both the financial services industry and the broader … Continue Reading

Illinois Releases Proposed Guidance on Application of State Money Transmission Law to Digital Currency Activities

On November 30, 2016, the Illinois Department of Financial and Professional Regulation (IDFPR) issued a proposed “Digital Currency Regulatory Guidance” (the Guidance) regarding the application of the Illinois Transmitters of Money Act (TOMA) to various digital currency activities. The Guidance applies only to “decentralized digital currencies,” which are not issued by a particular person or … Continue Reading

State AGs Double Down Focus on Financial Services, including FinTech

State attorneys General (AGs) continue to emerge as major regulators of financial services and show little sign of being cowed by their federal counterparts….or efforts to preempt state authority. This past week, representatives of the consumer protection divisions of the AGs of nearly all 50 states plus officials from the FTC and CFPB met in … Continue Reading

Maria Earley, Experienced CFPB Lawyer Joins Reed Smith in D.C.

On October 3rd, Maria Earley, a former enforcement attorney at the Consumer Financial Protection Bureau (CFPB), joined Reed Smith as a partner in the firm’s global Financial Industry Group (FIG) in Washington, D.C. “Reed Smith is proud to have earned the trust of some of the top banking and financial institutions in the world,” said FIG leader … Continue Reading

Federal Regulator Issues Proposed Rule Aimed at Incentive Compensation Policies of Banking Organizations

On April 21, 2016, the National Credit Union Administration (collectively, with the Office of the Comptroller of the Currency, Treasury, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Federal Housing Finance Agency, and U.S. Securities and Exchange Commission, the “Regulators”), issued a proposed rule (the “Proposed Rule”) designed to ensure that … Continue Reading

2015 FinCEN Enforcement Trends

To read a review of FinCEN’s enforcement efforts in 2015 and 2014 , which reveal a marked trend away from its longstanding focus on depository institutions and toward otherwise unregulated financial institutions, as well as an increased focus on pursuing penalties against individuals, view the Reed Smith client alert here.… Continue Reading

Fourth Circuit Rules FDCPA Does Not Apply to Consumer Finance Company Collecting Debt on Its Own Behalf, Even if It Acquired the Debt After Default

Reed Smith secured a precedential victory in the Fourth Circuit for client Santander Consumer USA Inc., holding that the Fair Debt Collection Practices Act (“FDCPA”) does not apply to a consumer finance company trying to collect debts owed to itself. In Henson v. Santander Consumer USA Inc., No. 15-01187, the court held that such a … Continue Reading

OCC Announces Shift in Enforcement Policy: Increased Focus on Internal Risk Management and Personal Liability of Bankers

The Office of the Comptroller of the Currency (“OCC”), the primary federal regulator for most large banks, recently issued a new policy on agency enforcement actions seeking civil money penalties (“CMPs”) against institutions and individuals.  There are several key developments that will directly affect institutions and the directors, officers, employees, major shareholders, and vendors associated … Continue Reading

New “Senior Managers Regime” to be introduced for all financial services firms, including the fund management sector

The Government has confirmed that it will be pushing forward with extending the Senior Managers and Certification Regime to all financial services firms (including investment firms and fund managers), following the Fair and Effective Markets Review (FEMR) report’s recommendation (and Mark Carney’s Mansion House speech indication) of the extension of the SMR to fixed income, … Continue Reading
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