On May 17, the FDIC and the CFPB took parallel actions to combat the misuse of  the name or logo of the FDIC and deceptive representations about deposit insurance.  The FDIC approved a final rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo.  The CFPB followed suit by releasing Consumer Financial Protection Circular 2022-02 providing that company’s likely violate the CFPA’s prohibition on deception acts or practices if they misuse the name or logo of the FDIC or engage in false advertising or make misrepresentations to consumers about deposit insurance, regardless of whether such conduct (including the misrepresentation of insured status) is engaged in knowingly.
Continue Reading FDIC and CFPB Take Action to Protect Against Misrepresentations about FDIC Insured Status and Misuse of Name and Logo

On April 8, the acting comptroller of the currency, Michael J. Hsu, discussed many aspects of stablecoins (we previously discussed the President’s Working Group report on stablecoins and Hsu’s comments here). In his speech at the Georgetown University Law Center, Hsu remarked that stablecoins are a “hot topic” among policymakers and posed three considerations that speak to the architecture of stablecoins.
Continue Reading Acting Comptroller Discusses Architecture of Stablecoins

On March 17, the OCC and FinCEN issued civil monetary penalties against a federal savings bank for “willfully” failing to meet minimum compliance program requirements and shoddy suspicious transaction reporting. The consent orders read like a veritable “how not to” for reviewing anti-money laundering alerts.
Continue Reading OCC and FinCEN Issue $200 Million in Penalties for BSA-AML Violations

On February 8, the House Financial Services Committee held a hearing titled, “Digital Assets and the Future of Finance: The President’s Working Group on Financial Markets” to consider legislative recommendations from the President’s Working Group (PWG) report on stablecoins (we previously discussed the report in an earlier Consumer Finance & FinTech Blog post here).   
Continue Reading House Financial Services Committee Focuses on PWG Stablecoin Report

On November 3, Acting Comptroller of the Currency, Michael J. Hsu, remarked at the BritishAmerican Business Transatlantic Finance Forum 2021-2022 Executive Roundtable about the regulation of stablecoins and other crypto-assets (we discussed Hsu’s previous remarks on crypto trends and risks in earlier Consumer Finance & FinTech Blog posts here, here, and here). In his remarks, Hsu emphasized the following:

Continue Reading OCC: Bank Regulation Would Mitigate Crypto Risk

On December 16, 2021, the Office of the Comptroller of the Currency (“OCC”) and the Financial Crimes Enforcement Network (“FinCEN”) issued civil monetary penalties against a Texas community bank for violations of the Bank Secrecy Act (“BSA”).  The consent orders read like a veritable “how not to” for reviewing anti-money laundering alerts.

Continue Reading OCC and FinCEN Issue $9 Million in Penalties for BSA-AML Violations

On November 18, the Chief Counsel of the Office of the Comptroller of the Currency (OCC) issued a fourth interpretive letter (Letter 1179) regarding whether it is permissible for national banks and federal savings associations to engage in certain cryptocurrency, distributed ledger, and stablecoin activities.  The letter clarifies ambiguities in the previous three letter including  the authority of a bank to engage in certain cryptocurrency activities and the authority of the OCC to charter a national trust bank.

Continue Reading OCC Chief Counsel Clarifies Bank Authority to Engage in Crypto

On November 23, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency (“banking agencies”) released a joint statement recognizing that the emerging crypto-asset sector presents potential opportunities and risks for banking organizations, their customers, and the overall financial system.

Continue Reading Banking Agencies Provide Crypto-Asset Roadmap as a Result of Interagency “Policy Sprints”

Building on his remarks to the Blockchain Association and the American Fintech Council earlier this month, the Acting Comptroller of the Currency, Michael J. Hsu, issued a statement on November 16 before the Federal Reserve Bank of Philadelphia Fifth Annual Fintech Conference (we discussed Hsu’s previous remarks in an earlier Consumer Finance & FinTech Blog post here).  As in his prior statement, Hsu points to concerns that the rapidly growing FinTech industry and crypto firms, which currently sit outside of the so-called bank regulatory perimeter, ought to be proactively regulated and supervised in order to avert another 2008-like financial crisis.  In particular, Hsu calls for the regulation of non-banks and fintechs that “provide seemingly the full suite of banking and investment services—including in cryptocurrencies—with the convenience of tech.”  Hsu states that “[t]hese fintechs are reassembling the three legs of banking [by taking deposits, making loans, and facilitating payments] synthetically, outside of the bank regulatory perimeter” or what he refers to as “synthetic banking.”

Continue Reading OCC: Modernize the Bank Regulatory Perimeter on Bank-Fintech Partnerships

On November 3, Acting Comptroller of the Currency, Michael J. Hsu, remarked at the American Fintech Council’s Fintech Policy Summit 2021 about the growth in the digitalization of banking including the trend and attendant risks associated with keeping cryptocurrency outside of the bank regulatory system (we discussed Hsu’s previous remarks on crypto trends and risks in an earlier Consumer Finance & FinTech Blog post here).  Hsu noted that the cryptocurrency space includes “synthetic banking providers” (SBPs) who “operate out of the reach of bank regulators and free of bank rules.”  Hsu explained that “[m]any of these universal crypto firms hold themselves out as regulated.  But this is a half-truth.”  Hsu also argued that the “rebundling” of banking activities of taking deposits, making loans and facilitating payments by fintechs and the fragmented supervision of universal crypto firms pose significant risks to consumers, businesses, and financial stability.

Continue Reading OCC Calls for Regulation of Crypto Banking

On November 1, the President’s Working Group on Financial Markets (PWG), the FDIC, and the OCC announced the release of a report on stablecoins — virtual currencies that, unlike Bitcoin, are backed by assets like gold or fiat currency. Stablecoins aim to eliminate the hesitation many consumers have about mainstream cryptocurrencies, namely their unpredictable volatility.

Continue Reading President’s Working Group Releases Report on Stablecoins