Archives: Financial Services Regulation – U.S.

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Senators Announce Bipartisan Deal to Ease Banking Regulations

On November 13, 2017, Senate Banking Committee Chairman Mike Crapo, along with several Democratic senators, announced an agreement on bipartisan financial reform legislation. The proposed legislation aims to lower the number of banks considered “systemically important” and thus subject to enhanced bank supervision rules.  The legislation also contains provisions aimed at easing the regulatory burdens … Continue Reading

Digital Assets Have Existing Laws Applied by SEC and CFTC

Nine years after Satoshi Nakamoto circulated his whitepaper and introduced the world to bitcoin, regulated bitcoin derivatives are about to be introduced in the United States. CME Group recently announced that it will begin to offer bitcoin futures based on the CME CF Bitcoin Reference Rate later this year[1] and the Chicago Board Options Exchange … Continue Reading

Financial Institutions’ IT Systems Receives New Regulatory Requirements from BaFin

On 3 November 2017, the German regulator for the financial sector, the Federal Financial Supervisory Authority (“BaFin”), published a new circular titled Rundschreiben 10/2017 (BA) vom 3. November 2017 – Bankaufsichtliche Anforderungen an die IT (in English: Circular 10/2017 – Regulatory Requirements for IT-Systems – “BAIT”). The BAIT is available in German language at the BaFin’s website. The … Continue Reading

NJ Governor-Elect Murphy Has Businesses Prepared for Change

Democrat Phil Murphy has been elected as the next Governor of the State of New Jersey. Murphy comes into the office with a double-digit victory over departing lieutenant governor Kim Guadagno (R), and the backing of a state legislature controlled by Democrats.  Governor-Elect Murphy, who has never served in elected office, promises to take the … Continue Reading

Digital Currency Company Receives SEC Complaint After Bitcoin Conversion Scheme

On October 30, 2017, the U.S. Securities and Exchange Commission (“SEC”) filed a complaint in federal court against a day trader for allegedly committing fraud and market manipulation during which the trader utilized a digital currency exchange in a supposed attempt to cover his tracks. The SEC claims that defendant’s associate obtained unauthorized access to … Continue Reading

Prize-Linked Savings Laws Spread Across States

With Americans’ saving habits in the news as the federal government considers caps on retirement contributions, financial institutions should be aware that many states are passing laws making it easier to incentivize saving. To date, 26 states have enacted legislation that liberalizes their approaches to games of chance in support of good consumer saving practices. … Continue Reading

Banks, Fintechs and Consumer Data: The CFPB Weighs In

On October 18, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) entered  into the long simmering debate over consumer-authorized data sharing.  This debate pits mainstream financial institutions, which are typically reticent to share customer data with third parties, against data aggregators and other fintechs.  Those newer companies provide services directly to consumers—or to enhance the … Continue Reading

Senate Nullifies Arbitration Rule in Huge Setback to CFPB

Late Tuesday evening the Senate voted to nullify the Consumer Financial Protection Bureau’s (“CFPB” or “Bureau”) controversial Arbitration Agreements Rule (“Rule”).  All but two Senate Republicans supported a resolution to repeal the Rule pursuant to the Congressional Review Act.  While there were rumors that one or two Democrats might also lend their support, none ultimately … Continue Reading

Treasury Report Takes Aim at CFPB Arbitration Rule

The CFPB’s Arbitration Agreements Rule (“Rule”), which was finalized on July 18, 2017, came under fire today in a report released by the U.S. Department of Treasury (“Treasury”).  The 18-page report details the “extraordinary costs” the Rule will impose if implemented—more than $500 million in additional legal defense fees, $330 million in payments to plaintiffs’ … Continue Reading

Educational Tool on Virtual Currencies released by CFTC

On October 17, 2017, the U.S. Commodity Futures Trading Commission’s (“CFTC”) LabCFTC released a primer on virtual currencies, available here.  The primer is an “education tool” that provides an overview of the virtual currency landscape and is “not intended to describe the official policy or position of the CFTC, or to limit the CFTC’s current … Continue Reading

Blunt Talk on Marijuana Banking in New Jersey

On Wednesday, October 11, 2017, Reed Smith Princeton attorneys Travis Nelson and Kristy Keiser will lead a discussion at the quarterly meeting of the Banking Law Section of the New Jersey State Bar Association. In addition to the meeting’s regularly scheduled agenda items, including planning for future CLE programs, and discussion of recent and pending … Continue Reading

Final Payday Lending Rule Released by the CFPB

On Thursday October 5, the Consumer Financial Protection Bureau (CFPB) issued a long-awaited final rule governing certain short-term loans and longer term loans involving balloon payments, better known as the payday lending rule. The rule is expected to dramatically impact the short-term loan industry, imposing numerous new restrictions on both short-term lenders (including “payday” lenders … Continue Reading

Crypto Token Cyber Crimes the New Focus for SEC

September 28, 2017 Two months after its Investor Bulletin stating that U.S. securities laws may apply to digital token sales, the Securities Exchange Commission (“SEC”) announced Monday two new initiatives to address cyber-based threats and protect retail investors.  The SEC’s press release outlined the creation of the Cyber Unit (“Unit”) and the Retail Strategy Task … Continue Reading

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
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