On Oct. 28, the U.S. Court of Appeals for the Fourth Circuit vacated and remanded for reconsideration a district court order certifying a class of mortgage borrowers. The decision, which relies on the U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez, provides further ammunition for the argument that all putative class members must have a
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Federal Reserve Exercises Broad Disciplinary Authority to Sanction Former Bank Employees Who Committed PPP Loan Fraud
On October 13, 2022, the Board of Governors of the Federal Reserve System (“Board”) announced multiple enforcement actions against former employees of several financial institutions because the former employees made false statements to obtain economic injury disaster loans and grants from the U.S. Small Business Administration (“SBA”) or paycheck protection loans from SBA-approved lenders. The…
CFPB Charges Schools With “Abusive” Act of Denying Academic Transcripts to Students With Debts
The Consumer Financial Protection Bureau’s recent guidance on withholding transcripts from students with debts revealed that the CFPB is using a broad definition of “private education loan” that may apply to the practices of some not-for-profit schools. Additionally, while the CFPB characterized this practice as “abusive,” its analysis suggests that these practices may also be…
Bank Regulators Remind Financial Institutions Not to Take a One-Size Fits All Approach to Assessing AML Risks from Customer Relationships
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively the “Agencies”) issued a Joint Statement on July 6, 2022, reminding banks[1] of the “risk-based approach to assessing customer relationships…
FinCEN Issues Statement on BSA Due Diligence for Independent ATM Owners and Operators
On June 22, 2022, the Financial Crimes Enforcement Network (FinCEN) issued a Statement on Bank Secrecy Act Due Diligence for independent ATM owners and operators. The purpose of the statement is to “provide clarity to banks on how to apply a risk-based approach to conducting customer due diligence (CDD) on independent Automated Teller Machine (ATM)…
FinCEN Proposes No-Action Letter Process
On June 3, 2022, the Financial Crimes Enforcement Network (FinCen) issued an Advance Notice of Proposed Rulemaking proposing public comment on the enactment of a no-action letter process. This Advanced Notice follows FinCen’s Report to Congress submitted in June 2021 that was based on FinCen’s consultation with the Attorney General, State bank supervisors, State credit…
Is the Future of the Dollar Digital? The Fed Talks Updating Greenbacks to the Blockchain
On May 26, three days into her term as Vice Chair of the Federal Reserve, Lael Brainard testified about the Federal Reserve’s Examination of the Benefits and Risks of a U.S. Central Bank Digital Currency (CBDC) before the House Committee on Financial Services. Vice Chair Brainard’s comments reinforced many of the themes from the Fed’s…
Opportunity Financial’s Lawsuit Against California’s Financial-Services Regulator Signals Continued Fight Over “True Lender” Principles
Fintech lender Opportunity Financial (“OppFi”) and the Department of Financial Protection and Innovation (“DFPI”), California’s financial-services regulator, filed dueling claims as they battle over state efforts to enjoin the company’s branded loans, which exceed California’s 36% interest-rate cap. This is the latest effort by fintech lenders to cement the True Lender Rule against state opposition.…
New York State Department of Financial Services Takes Aim at Blockchain Entities Circumventing Sanctions on Russia
Blockchain regulation continues to be the topic du jour, with increasing scrutiny from government agencies across the board. The latest comes from the New York State Department of Financial Services (DFS), which has been a leader in the space since the 2015 “BitLicense” framework under the New York Financial Services Law. On April 28,…
SEC Signals Enhanced Focus on Crypto Assets by Expanding the Enforcement Unit Tasked With Protecting Crypto Markets
Reflecting its determination to monitor the crypto markets, the Security and Exchange Commission has renamed the Cyber Unit the “Crypto Assets and Cyber Unit” and is nearly doubling its size from 30 to 50 members, according to a May 3 press release from the agency. The additional permanent positions will include investigative staff attorneys, trial…