Category: FinTech Industry & Regulation

1
Let Me In: Wyoming Special Purpose Bank Sues Fed for Access to Payments System
2
10 Impactful Provisions of the Lummis-Gillibrand Bill
3
California Soliciting Comments on Potential Regulation of Crypto Products and Services
4
UK Payments Landscape Review
5
Nebraska’s Play for a Piece of the Digital Asset Pie
6
The Future of Stable (Bank) Coins?: President’s Working Group on Financial Markets Urges Legislation Limiting Stablecoins to Insured Banks
7
California Imposes Additional Requirements on Money Transmitters
8
Satoshi Goes to Washington : Senator Toomey Issues RFI to Inform Digital Asset Legislation
9
Never Ending True Lender Uncertainty
10
Taking Bitcoin to the Bank: FDIC Seeks Comments on Bank Services for Digital Assets

Let Me In: Wyoming Special Purpose Bank Sues Fed for Access to Payments System

By Grant F. Butler, Andrew M. Hinkes, and Robert M. Tammero, Jr.

Custodia Bank (“Custodia”) filed a complaint against the Federal Reserve Board (“FRB”) and the Federal Reserve Bank of Kansas City (“FRBKC”) in Wyoming federal court alleging that the FRB and FRBKC are unlawfully refusing to act on Custodia’s application for a master account.  A Federal Reserve master account allows banks to directly access the Federal Reserve and utilize the Federal Reserve System’s payment, clearing and settlement services. 

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10 Impactful Provisions of the Lummis-Gillibrand Bill

By Andrew Hinkes, Eden Rohrer, and Judie Rinearson

The “Lummis-Gillibrand Responsible Financial Innovation Act,” announced this morning, lays out a bold agenda for legal reform across multiple regulatory regimes aimed at clarifying legal requirements for regulated entities to issue, trade, and provide services related to certain digital assets. Although a point by point summary of the 69 page bill is beyond the scope of this post, here’s a brief summary of 10 impactful provisions from the Bill:

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California Soliciting Comments on Potential Regulation of Crypto Products and Services

By Jeremy McLaughlin and Christian A. Zazzali

On May 4, 2022, California Governor Gavin Newsom issued an executive order on digital assets, which seeks sensible, transparent regulation through engagement with developers of digital asset-related products and services. For a detailed discussion on the executive order, see our prior blog here. In response, California’s financial regulator, the Department of Financial Protection and Innovation (DFPI), issued an invitation to submit comments on crypto-asset related products and services under the California Consumer Financial Protection Law (CCFPL).  The deadline for submission is August 5, 2022.

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UK Payments Landscape Review

By Kai Zhang

In July 2020, HM Treasury published a “Payments Landscape Review: Call for Evidence” for a strategic review of the UK payments sector. Following feedback from the industry, HM Treasury published its Response to the Call for Evidence in October 2021 which sets out a number of initiatives to ensure the payment sector stays at the “forefront” of technology and innovation.

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Nebraska’s Play for a Piece of the Digital Asset Pie

By Jeremy McLaughlin

On October 1st, Nebraska ingratiated itself to the digital asset industry when the Nebraska Financial Innovation Act (The Act) became effective. The Act offers two pathways for an entity wishing to offer certain digital asset services: a state-chartered bank may create a digital asset division or a digital asset depository may be created under a new charter.

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The Future of Stable (Bank) Coins?: President’s Working Group on Financial Markets Urges Legislation Limiting Stablecoins to Insured Banks

By Judith Rinearson, Jeremy M. McLaughlin, and Daniel S. Nuñez Cohen

On 1 November 2021, the President’s Working Group on Financial Markets (PWG), in conjunction with the Federal Deposit Insurance Corporation and the Comptroller of the Currency, issued a long-awaited joint “Report on Stablecoins” (Report). Per the press release (and a speech by Undersecretary of Treasury Nellie Liang), the Report is intended to “identify regulatory gaps related to “payment stablecoins” (defined as stablecoins that are designed to maintain a stable value and “therefore have potential to be used as widespread means of payment”), and to present recommendations for addressing those gaps.”

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California Imposes Additional Requirements on Money Transmitters

By Jeremy M. McLaughlin

Under a newly-enacted law, money transmitters licensed in California must comply with new customer service requirements starting on July 1, 2022. Under the requirements, a licensee must “prominently display on its internet website a toll-free telephone number through which a customer may contact the licensee for customer service issues and receive live customer assistance.” The line must be operative at least 10 hours a day, Monday through Friday. In addition, California law currently requires a money transmitter to provide a receipt for transactions. Under the new requirements, the receipt must also provide the telephone number through which the customer may contact the licensee for customer service issues.

Satoshi Goes to Washington : Senator Toomey Issues RFI to Inform Digital Asset Legislation

By Jeremy M. McLaughlin, Judith Rinearson, and Daniel S. Cohen

As we have noted in the past, federal regulation of the digital asset/cryptocurrency/DeFi community is evolving and there are many perspectives on what direction it should take. For instance, earlier this week, the House Democratic leadership and a group of moderate House Democrats agreed to a compromise that would prevent the House of Representatives from amending the Senate-passed “Infrastructure Investment and Jobs Act” (H.R. 3684), thereby preserving the bill’s provisions expanding the definition of “broker” under the Internal Revenue Code to apply to various digital asset market participants.

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Never Ending True Lender Uncertainty

By Jeremy McLaughlin and John Reveal

On June 24, 2021, the U.S. House of Representatives passed a resolution to overturn the Office of the Comptroller of the Currency’s (“OCC”) “true lender” regulation that had been finalized on October 30, 2020. This resolution revives the uncertainty regarding the enforceability of loan terms when a national bank or federal savings association assigns loans to third parties.   President Biden is expected to sign the resolution. 

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Taking Bitcoin to the Bank: FDIC Seeks Comments on Bank Services for Digital Assets

By: Judie Rinearson, Jeremy McLaughlin, and Daniel S. Cohen

The Federal Deposit Insurance Corporation (FDIC) has issued a “Request for Information and Comment on Digital Assets” (RFI) to learn more about the “novel and unique considerations related to digital assets….[g]iven that banks are increasingly exploring the emerging digital asset ecosystem.” A key theme of the RFI is the development of a framework to promote “responsible innovation.” Comments are due by July 16, 2021.

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