FinTech Law Watch

At the Crossroads of Law, Innovation and Commerce

 

1
CFPB Issues Advisory Opinion Strictly Interpreting Permissible Purpose for Consumer Reports
2
Cryptocurrency Market Downturn and Australian Regulation Update
3
Forthcoming New York Law Expands Protections For Credit Card Reward Points
4
MiCA is Here:  European Ground-breaking Rules for the Cryptocurrencies Market
5
Louisiana Proposes Administrative Rules for Virtual Currency Businesses
6
Change Is Constant* and There’s a lot of Regulatory Change Happening in the UK – Impacting Fintechs and Crypto Asset companies.
7
UK Regulator Ready to Take on Visa/MasterCard Payment Networks
8
On Heels of Crypto Legislative Activity, NYDFS Follows Up With Crypto Stablecoin Guidance
9
New York Legislators Address Crypto Head-On
10
Let Me In: Wyoming Special Purpose Bank Sues Fed for Access to Payments System

CFPB Issues Advisory Opinion Strictly Interpreting Permissible Purpose for Consumer Reports

By Grant F. Butler

On July 12, 2022, the Consumer Financial Protection Bureau (“CFPB”) issued an advisory opinion that states its strict interpretation of the permissible purposes for which a consumer reporting agency may provide a consumer report and for which consumer report users may obtain consumer reports.  Section 604(a) of the Fair Credit Reporting Act (“FCRA”) identifies the “permissible purposes” for which a consumer reporting agency may furnish a consumer report. 

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Cryptocurrency Market Downturn and Australian Regulation Update

By Daniel Knight and Kithmin Ranamukhaarachchi

In the wake of the drawn out cryptocurrency market downturn, increased regulation of the sector seems inevitable. With nearly one million Australians transacting in cryptocurrencies last year, there have been widespread calls to enact additional protections for retail investors.

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Forthcoming New York Law Expands Protections For Credit Card Reward Points

By Jeremy M. McLaughlin and Joshua Durham

Last year, on December 10, 2021, New York governor Kathy Hochul signed into law Senate Bill S133B, which is set to take effect on December 10, 2022.  Among other things, it provides a 90-day grace period for the use of credit card reward points before an account is modified, cancelled, closed, or terminated.

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Louisiana Proposes Administrative Rules for Virtual Currency Businesses

By Jeremy M. McLaughlin and Christian A. Zazzali

The Louisiana Office for Financial Institutions (“OFI”) has proposed administrative rules governing the licensing process for virtual currency businesses. Louisiana’s Virtual Currency Business Act (the “Act”) became effective in August 2020 and granted OFI broad supervisory and enforcement powers.  The Act also required OFI to promulgate rules regarding licensing.  Roughly two years later, OFI has done so. Those wishing to submit written comments on the proposed rules may do so through 5:00 pm on July 10, 2022.  It’s expected the rules will be adopted later this year.

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Change Is Constant* and There’s a lot of Regulatory Change Happening in the UK – Impacting Fintechs and Crypto Asset companies.

By Kai Zhang

Critical third party regime

This is to address the concentration issue where financial services firms outsource key functions/services to a few large service providers (e.g. cloud service providers). HM Treasury will designate which third party service providers are considered “critical”. Then the relevant regulators will be given power to make rules supervising them with respect to certain “material services”. See policy statement of 8 June.

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UK Regulator Ready to Take on Visa/MasterCard Payment Networks

By Judie Rinearson and Kai Zhang

The UK Payment System Regulator (“PSR”), which is becoming increasingly assertive, issued on 21 June 2022 two consultations taking a closer look at the Visa and Mastercard “schemes” in the UK.[1] The PSR proposes two market reviews: one into how Visa and Mastercard set the interchange fees; the other into how Visa and Mastercard set their scheme and processing fees. The market reviews will be conducted after the consultations close on 2 August 2022.

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On Heels of Crypto Legislative Activity, NYDFS Follows Up With Crypto Stablecoin Guidance

By Jeremy M. McLaughlin, Andrew M. Hinkes, and Christian Zazzali

On June 8, 2022, the New York State Department of Financial Services (“NYDFS”) released regulatory guidance applicable only to payment stablecoins that are backed by the U.S. Dollar and issued by entities regulated by NYDFS. The guidance comes one day after Senators Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) released a bill calling for dramatic changes to federal regulation of the cryptocurrency industry (see our quick analysis here) and less than a week after New York’s legislature passed two bills aimed at crypto regulation. Focusing on three criteria—redeemability, reserves, and attestation—the NYDFS stablecoin guidance is intended to ensure that payment stablecoin issuers remain solvent so holders of those payment stablecoins can timely exercise their right to redeem. This guidance does not address a stablecoin’s trading price and does not mandate that the issuer take any active measures to ensure the price of the asset on markets.

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New York Legislators Address Crypto Head-On

By Jeremy M. McLaughlin, Christian A. Zazzali, and Josh Durham

On Friday June 3, 2022, New York lawmakers passed two cryptocurrency bills, whose fate now lie in the hands of Gov. Kathy Hochul. Together, they would impose a moratorium on certain cryptocurrency mining operations and establish a cryptocurrency and blockchain task force. If successful, the mining ban would make New York the first state to enact such a moratorium.

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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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