Fintech

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On August 21, the CFPB filed a complaint and stipulated final judgment in the U.S. Bankruptcy Court for the Central District of California against a fintech service provider in Chapter 11 proceedings. The Bureau alleged violations of the Consumer Financial Protection Act (CFPA), asserting the company engaged in unfair acts and practices by failing to maintain accurate custodial records of consumer funds. The stipulated order, entered with the consent of the Chapter 11 Trustee, permanently bars the company from participating in a range of consumer financial activities.Continue Reading CFPB Secures Permanent Ban on Fintech Service Provider for Alleged Unfair Practices

On August 21, the Consumer Financial Protection Bureau published an advance notice of proposed rulemaking (ANPR) in the Federal Register to reconsider its Personal Financial Data Rights Rule under Section 1033 of the Dodd-Frank Act. The Bureau stated that it is reopening the rule in light of policy changes under new leadership and a court-ordered stay in ongoing litigation challenging the 2024 final rule.Continue Reading CFPB Reopens Data Rights Debate with New 1033 Rulemaking

On April 9, the Federal Reserve Bank of Kansas City published a research briefing examining how video game platforms are reshaping the digital payments landscape. As in-game purchases and platform-based transactions grow in volume and complexity, these developments are raising new regulatory concerns for both federal and state banking regulators.Continue Reading Kansas City Federal Reserve Bank Explores Regulatory Risks in Gaming Ecosystems

Following President Trump’s March 6 Executive Order establishing a Strategic Bitcoin Reserve, released alongside a White House Briefing, the U.S. government has taken its most formal step yet toward integrating digital assets into national economic and security policy. The order outlines a broader strategy to manage and expand the federal government’s holdings of Bitcoin and other designated cryptocurrencies through the creation of a Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile.Continue Reading From Seizures to Strategy: The U.S. Government’s Move Toward a National Crypto Reserve

The CFPB is facing pushback from the U.S. Senate over two final rules issued under the Biden administration: one expanding oversight of nonbank digital payment providers and another limiting the reporting of medical debt. Both efforts invoke the Congressional Review Act (CRA), a legislative mechanism that allows Congress to roll back recently finalized federal regulations.Continue Reading GOP Senators Moving to Invoke the Congressional Review Act Over Biden-Era Rules

On October 30, two leading fintech industry trade associations submitted comments (see comment letters here and here) in response to a joint Request for Information (RFI) issued by the Office of the Comptroller of the Currency (OCC), the Federal Reserve System (Fed), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the “Agencies”) (see here for our previous discussion on the RFI). The RFI seeks input on the nature of bank-fintech arrangements, effective risk management practices, and the implications of such arrangements, including whether enhancements to existing supervisory guidance may be helpful in addressing associated risks. The comment period concluded on October 30.Continue Reading Fintech Industry Trade Associations Respond to Federal Regulators’ Joint RFI on Bank-Fintech Partnerships

On August 28, the CFPB issued a Consumer Advisory warning that it believes video game companies are targeting children for monetary gain. With 45.7 million U.S. children engaged in video gameplay, the agency is concerned about the financial risks that games and virtual worlds pose, especially to young consumers. This Advisory highlights a growing focus on the game industry’s practices, which allegedly mimic traditional banking systems but lack corresponding consumer protections. Continue Reading The CFPB Continues to Reshape Consumer Protection in the Digital Arena 

On July 25, federal regulators issued a joint statement to further put banking organizations on notice of the inherent risks of collaborating with fintechs in offering deposit products and services. This guidance aims to ensure the stability and integrity of the banking-as-a-service (“BaaS”) business model.Continue Reading Federal Regulators Issue Joint Statement and Request for Information Emphasizing Caution with BaaS Model

On June 14, the Federal Reserve Board (Fed) released a cease and desist order against an Arkansas-based banking-as-a-service (BaaS) provider for compliance and risk management failures. As part of the order, the bank is prohibited, without prior approval, from (i) establishing any new fintech partners, subsidiaries, business lines, products, programs, services, or program managers, or (ii) offer new products, programs, or services to an existing fintech partner, program manager, or subsidiary.Continue Reading Federal Reserve Board Issues Cease and Desist Order Against Banking-As-A-Service Provider

On May 16, the Maryland Office of Financial Regulation (“OFR”) announced a settlement with a Missouri-based bank and its fintech partners for engaging in unlicensed lending, credit repair, and debt collection activities. 

In the OFR’s January 2021 Charge Letter, the agency alleged that the bank and its fintech partners violated Maryland law by its failure to hold a lending, debt collection, and credit repair license. According to the OFR, the bank offered in-store retail credit financing as well as store-branded credit cards to Maryland consumers. Continue Reading Maryland Banking Regulator Settles with Bank/Fintech Partnership For Unlicensed Lending, Credit Repair, and Debt Collection Activities