Header graphic for print

MoFo Reenforcement

The Enforcement Blog

Attorneys General Push Against OCC’s Attempts to Codify “Valid When Made” Rule

Posted in Credit Cards, Regulatory Developments
On January 21, 2020, twenty-two State Attorneys General and the Hawaii Office of Consumer Protection submitted a comment letter to the Office of the Comptroller of the Currency in opposition to its proposed rulemaking to resolve the “confusion” stemming from the Second Circuit’s 2015 decision in Madden v. Midland Funding LLC.

Read our client alert.

California Regulator Reiterates that Credit Sales Cannot be Used to Evade Financing Law

Posted in Regulatory Developments

In two recent actions, the California Department of Business Oversight (DBO) addressed whether companies that purchase retail installment contracts should be considered bona fide purchasers of credit sales or whether those transactions should be considered loans subject to the California Financing Law (CFL). In doing so, the DBO reiterates existing case law and sets forth the factors that the DBO will consider when determining whether a purchase of a retail installment contract should be recharacterized as a loan.

Read our client alert.

Are You a Money Transmitter in Massachusetts? In Rhode Island?

Posted in Regulatory Developments

As we enter 2020, the payments and money transmission regulatory landscape continues to evolve on a state-by-state basis.  Newly adopted regulations in Massachusetts affirm that “agent of a payee” transactions meeting certain criteria, as well as funds transfer services provided to business customers, are not subject to regulation under the state’s money transmission law. Additionally, Rhode Island’s updated money transmission licensing law took effect on January 1st. While it does not provide for an express agent of a payee exemption, it excludes funds transfer services provided to business customers.

Read our client alert.

The DBO Notifies CFL Lenders of New Rate and Other Limitations Imposed by AB 539

Posted in Regulatory Developments

The California Department of Business Oversight (DBO) has issued a Release that summarizes the provisions of California Assembly Bill 539 and addresses some implementation issues. This bill was chaptered as Chapter 708 of the 2019 Statutes and is effective January 1, 2020. Our earlier Client Alert discussed the new law in detail.

Read our client alert.

Federal Regulators Issue Joint Guidance on Banking Hemp-Related Businesses

Posted in Regulatory Developments

According to new guidance released on December 3, 2019, banks are not required to file suspicious activity reports on customers solely because they are engaged in the legal growth or cultivation of hemp. The guidance was issued by the federal banking agencies and the Financial Crimes Enforcement Network in consultation with the Conference of State Bank Supervisors. We discuss the key takeaways from the new guidance and how it impacts banks and their customers.

Read our client alert.

Long Awaited HVCRE Rule Clarifies Capital Treatment of Certain Real Estate Loans

Posted in Regulatory Developments

On November 19, 2019, the federal banking agencies issued a final rule that incorporates a new definition of an “HVCRE exposure” into the U.S. regulatory capital rules. The new definition is substantially that of an “HVCRE ADC loan” from Section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, enacted into law on May 24, 2018. The final rule is scheduled to go into effect on April 1, 2020.

Read our client alert.

After Madden, OCC and FDIC Propose to Reaffirm “Valid When Made” Rule

Posted in Regulatory Developments

The Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation have taken steps to reaffirm the “valid when made” doctrine in response to Madden. We discuss the key takeaways from the agencies’ proposed rules and how this will affect all national banks and state banks.

Read our client alert.

Is Payroll Processing Money Transmission? New York May Be Weighing In

Posted in Electronic Payments, Regulatory Developments, State Regulators

It seems like a natural progression for a company that provides any sort of payments-related information processing to migrate from handling data about payments to seeking to handle the payments themselves. But it can be a challenge for any company, particularly a younger one, to determine whether a payments-related service it wishes to offer — even if it is only part of a larger suite of services — is subject to regulation as money transmission. This question is important because nearly every state regulates money transmission under its own state-specific licensing framework, and the statutory definitions of money transmission can be construed broadly to cover any entity that “receives” or “transfers” money.

Read our client alert.

California Enacts Interest Rate and Other Restrictions on Consumer Loans

Posted in Credit Reports, Regulatory Developments

As expected, California has enacted legislation imposing interest rate caps on larger consumer loans. The new law, AB 539, imposes other requirements relating to credit reporting, consumer education, maximum loan repayment periods, and prepayment penalties. The law applies only to loans made under the California Financing Law (CFL). Governor Newsom signed the bill into law on October 11, 2019. The bill has been chaptered as Chapter 708 of the 2019 Statutes.

Read our client alert.

Uncharted Waters: California Regulator Issues Draft Commercial Financing Disclosure Regulation

Posted in Regulatory Developments

On July 26, the California Department of Business Oversight (DBO) issued a draft regulation and draft disclosures to implement the state’s first-of-its-kind commercial financing disclosure law enacted last year. With this draft regulation, the DBO wades into uncharted waters in implementing the first law requiring disclosures of key terms in connection with certain commercial financings by non-banks.

Read our client alert.