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MoFo Reenforcement

The Enforcement Blog

Could Strong Consumer Authentication Weaken Consumer Demand?

Posted in Electronic Payments, Regulatory Developments

From 14 September 2019, certain electronic and remote payments must be subjected to two-factor, or “strong customer authentication”, under regulatory standards covering the European Economic Area relating to the second EU Payment Services Directive, which took effect in January 2018. Retailers are uncertain whether these new European anti-fraud measures will cause consumers to abandon online purchases. Read our client alert for guidance on transactions that might be impacted or exempt.

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In a First, FinCEN Assesses Civil Money Penalty Against Peer-to-Peer Virtual Currency Exchanger

Posted in Enforcement Actions, Regulatory Developments

The Financial Crimes Enforcement Network (“FinCEN”) issued a press release announcing a civil money penalty for violations of the Bank Secrecy Act against Eric Powers, an individual who acted as a peer-to-peer virtual currency exchanger. The enforcement action is the first-ever penalty assessed by FinCEN against a peer-to-peer virtual currency exchanger. Our alert discusses this recent action by FinCEN and its implications.

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Federal Reserve Proposes New Control Regulations

Posted in Regulatory Developments

The Board of Governors of the Federal Reserve System  released a proposed rule to revise regulations related to the determination of “control” under the Bank Holding Company Act (“BHC Act”) and the Home Owners’ Loan Act. The Proposed Rule would incorporate existing interpretations under the “controlling influence” prong of the control definition into Federal Reserve regulations and would make certain adjustments to historical Federal Reserve practice in this area.

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Banking Agencies Propose a More Tiered Approach to Large Foreign Bank Supervision

Posted in Regulatory Developments

On April 8, 2019, the federal banking agencies released two proposals which, if adopted, would further tailor the approach to supervision of large foreign banking organizations (FBOs). For FBOs with a more significant U.S. presence, the proposals would establish categories for the application of requirements based on size and certain other risk-based indicators. These categories would parallel the tailored framework proposed for the supervision of large domestic banking organizations released in November 2018.

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Federal Reserve and FDIC Issue Proposed Changes to Resolution Plan Requirements for Foreign and Domestic Banking Organizations

Posted in Regulatory Developments

On April 8 and 16, 2019, the Federal Reserve and the FDIC published proposed changes to resolution plan (or “living will”) requirements applicable to U.S. and foreign banking organizations. The regulatory changes are necessary because the 2018 Regulatory Relief Act raised the asset thresholds for applicability of the living will requirements. The proposal would apply different filing frequency and informational content requirements based on the risk a firm poses to the U.S. financial system.

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Unanimous but Narrow SCOTUS Ruling on Fair Debt Collection Practices Act

Posted in Foreclosure, Mortgage, Regulatory Developments

On March 20, 2019, the Supreme Court unanimously ruled in Obduskey v. McCarthy & Holthus LLP that a business engaged in non-judicial foreclosure is not subject to all of the requirements and prohibitions applicable to “debt collectors” under the Fair Debt Collections Practices Act. We discuss The Supreme Court’s decision and how this ruling is limited to situations where a business’s actions are required by state law governing enforcement of security interests.

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Financial Services Report – Spring 2019

Posted in Arbitration, CFPB, Credit Cards, Credit Reports, Electronic Payments, Enforcement Actions, Fair Lending, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, Student Lending

In the words of Willie Wonka: “Wait a minute — strike that, reverse it!” As loyal readers will recall, in our last issue, we tried to stay current in referring to the CFPB by what Mick Mulvaney declared would be its new name: the Bureau of Consumer Financial Protection. Well, what a difference a director makes. Shortly after Kathy Kraninger was confirmed by the Senate as the second Director of the agency, she scrapped the name change. We’ll wait to see what happens to the big “bcfp” sign in the lobby of the CFPB’s headquarters! Since Kraninger was confirmed we’ve seen the Bureau issue its first consent orders since former Director Cordray resigned. CFPB-watchers have noted that only one of these consent orders included restitution. A change in direction? A sub rosa recognition of self-reporting and self-remediation? We’ll have to wait and see.

This quarter also brought an about-face by the CFPB on part of the controversial small-dollar loan rule. Consumer advocates and industry trade groups alike are threatening suit on different parts of the proposed rule. Does that indicate it’s a good compromise? Again, we’ll have to wait and see.

Read on to catch up on these and other developments in Washington, D.C. and beyond.

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California Invites Comments on Agent of a Payee Exemption—Rulemaking to Follow

Posted in Regulatory Developments

The California Department of Business Oversight (“DBO”) has issued an Invitation for Comments relating to the scope of the “agent of a payee” exemption under the Money Transmission Act, Cal. Fin. Code § 2000 et seq. Comments are due on April 9. According to the DBO, it is seeking comments because it intends to develop regulations to “clarify the applicability” of the exemption.

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CFPB Proposes Revisions to Small-Dollar Loan Rule

Posted in CFPB, Regulatory Developments

On February 6, 2019, amidst strong opposition from representatives of consumer groups and some members of Congress, the Consumer Financial Protection Bureau (CFPB) issued a proposed rule to revise its controversial November 2017 small-dollar loan rule (2017 Rule). The proposed rule would effectively rescind the 2017 Rule’s requirement that lenders determine a borrower’s ability to repay prior to extending small-dollar and certain other types of covered loans.

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CFPB Issues FAQs for the TRID Rule

Posted in CFPB, Regulatory Developments

The Consumer Financial Protection Bureau (CFPB) recently posted a new compliance tool on its website – answers to frequently asked questions (FAQs) about the TILA-RESPA Integrated Disclosure Rule (“TRID Rule”). The FAQs were posted without advance notice or comment, signaling that perhaps the CFPB will dispense with lengthy processes when providing written guidance. What follows is a brief summary of the FAQs.

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