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.Read More
A new special administration regime is being introduced in the UK for insolvent payment institutions (PIs) and electronic money institutions (EMIs).
The key purposes of the Regulations are to ensure that in the event of an institution’s insolvency (a) funds are returned to customers quickly and (b) shortfalls in the amounts returned are minimised. Since 2018, six PIs and EMIs have entered insolvency but only one has returned customer funds.Read More
The UK Financial Conduct Authority (FCA) commenced, on 28 January 2021, a consultation (CP21/3) on various changes to the UK regulation of payment services and electronic money. The proposals include amendments to the substantive regulatory requirements as well as changes to the FCA guidance. Similar to an Advance Notice of Proposed Rulemaking (ANPR) in the US, the consultation seeks industry and public feedback, and is fully expected to lead to formal regulation in the near future.Read More
On September 17, the Conference of State Bank Supervisors (CSBS) announced that at least 40 states will establish a joint examination process for “nationwide payments firms” for the 2021 examination cycle. Known as “MSB Networked Supervision,” the initiative will allow 78 licensed payments companies, including some cryptocurrency exchanges, to undergo one joint examination rather than separate examinations for each state in which they are licensed. The examinations will be conducted by a group of examiners from multiple states but led by one designated state’s regulator. To be eligible, companies must be licensed in at least 40 states. This initiative follows the “One Company, One Exam Pilot” that was completed earlier this year and is part of CSBS Vision 2020, an initiative to create “a networked system of nonbank licensing and supervision.”Read More
The Consumer Financial Protection Bureau (CFPB) recently announced settlements with two remittance transfer providers for violations of the Electronic Funds Transfer Act (EFTA) and the Remittance Rule, part of the regulation that implements the EFTA—an area in which there isn’t typically much CFPB enforcement activity.Read More
On June 25, 2020, Acting Comptroller Brian Brooks announced in an American Bankers Association’s podcast that the Office of the Comptroller of the Currency (the “OCC”) is planning to introduce “Payments Charter 1.0”, which would effectively be a “national version of a state money transmission license.”Read More
On May 29, 2020, the Office of the Comptroller of the Currency (“OCC”) issued a final rule (https://www.occ.gov/news-issuances/federal-register/2020/nr-occ-2020-71a.pdf) to clarify that, when a federal or state-chartered savings association transfers a loan portfolio, interest permissible on the loans before the transfer continues to be permissible after the transfer. In this way, the OCC hopes to resolve the uncertainty created by the Madden v. Midland Funding, LLC decision (“Madden”).Read More
Several states exempt from their money transmission law, either through statute or regulatory guidance, an “agent of the payee.” California is one such state. In general, the exemption applies to a party that a payee has appointed as its agent for purposes of receiving payment from a payor. The Department of Business Oversight (“DBO”), the agency that enforces California’s money transmitter law, has invited comments on a proposed rule making regarding the scope of the exemption. Comments are due by April 9, 2019.Read More
By Jim Bulling and Elise Hamblin
Contactless payment technology has expanded beyond traditional credit or debit cards to include smart watches and phones that are fitted with “Near Field Communication” technology. Westpac is now the first major bank in Australia to embrace “PayWear” as the next development in this space.
What is “PayWear”?
PayWear allows a consumer to make payments by tapping a “Smart” accessory to a contactless payment terminal. For example, Westpac’s “Centsitive Objects” range has reimagined the traditional Debit Mastercard as an accessory. Other smaller banks have also recently introduced PayWear options for consumers, including Heritage Bank’s wearable wrist band and Bankwest’s payment ring.
On 23 February 2016 our London office hosted a seminar discussing the future of payments and money transfer and the opportunities and challenges for businesses in this space, featuring talks from leading industry experts Anthony Watson of Uphold Inc. and Jean-Stéphane Gourévitch of Matchi.biz, alongside our partners Jacob Ghanty and Tom Wallace. Find a link to the audio recording and slides of the event here.