Header graphic for print

MoFo Reenforcement

The Enforcement Blog

California SB1-Plus? GDPR-Like? Considerations for Financial Institutions in Evaluating the California Consumer Privacy Act

Posted in Privacy, Regulatory Developments

Financial institutions in the United States are no strangers to privacy regulations, particularly given the obligations imposed by the federal Gramm-Leach-Bliley Act (“GLBA”) and the California Financial Information Privacy Act (“SB1”).  More recently, financial institutions have been focused on whether and/or the extent to which the EU’s GDPR may apply to their U.S. operations.  Many financial institutions, however, have yet to consider an equally important U.S. privacy development—the California Consumer Privacy Act (“Act”), a ballot initiative likely to appear on the November ballot.

If approved by voters, the Act would impose notice obligations on covered businesses to disclose the categories of personal information (“PI”) they collect, sell, and share about California consumers, and give those consumers a right to say “no” to the “sale” of their information. We discussed the Act and its potential requirements and related risks, including litigation arising from alleged violations of the Act, in greater detail in an earlier alert.

Here, we highlight certain considerations that are unique to financial institutions and evaluate the potential impact of the Act on financial institutions, particularly given their existing privacy obligations under the GLBA and SB1.  Below are six key considerations for financial institutions to keep in mind as they navigate the interplay between the Act, the GLBA, and SB1.

Read our client alert.

Financial Regulatory Reform Legislation Proceeds through Congress

Posted in Regulatory Developments

On May 22, 2018, the U.S. House of Representatives passed S. 2155, the “Economic Growth, Regulatory Relief, and Consumer Protection Act.” The bill was passed on a bipartisan basis with a vote of 258-159. The bill was previously passed by the U.S. Senate on March 14, 2018. Now that identical legislation has passed both houses of Congress, the bill will go to President Trump for his signature, which is expected in the coming days. Once effective, the new law will provide modest regulatory relief to regional and community banks.

Read our client alert.

HUD to Reconsider Disparate Impact Rule

Posted in Disparate Impact, Fair Lending

The U.S. Department of Housing and Urban Development announced that it will “shortly” seek public comment on whether its controversial disparate impact rule is consistent with the Supreme Court’s Inclusive Communities decision. In Inclusive Communities, the Supreme Court held that disparate impact is a cognizable theory of discrimination under the Fair Housing Act. Thus, a defendant may be liable for a practice that is facially neutral but that nevertheless has a discriminatory impact, unless there is a legally sufficient justification for the practice. Inclusive Communities did not decide the standard for evaluating disparate impact claims; rather, it provided several guideposts for “necessary” “limitations.” HUD’s disparate impact rule is arguably inconsistent with those limitations and the Supreme Court’s decision in several respects. The agency’s announcement suggests it is now considering revising the rule to conform to the Supreme Court’s holdings.

Read our client alert.

South Carolina’s Money Transmission Law Comes into Effect

Posted in Regulatory Developments, State Regulators

Yesterday, the Office of the South Carolina Attorney General issued a press release announcing that it has created a Money Services Division within the AG’s office and that, effective May 14, the Division is accepting applications for licensure under South Carolina’s money transmission law. This law, officially known as the South Carolina Anti-Money Laundering Act, will formally take effect on May 25, the date the regulations promulgated to implement the Act are scheduled to be published in final form in the State Register. This will occur nearly two years after the Act’s passage on June 9, 2016.

Read our client alert.

EVENT: ETA Spotlight Call: Key Elements of Strategic Partnership Agreements

Posted in Events

Wednesday, May 16, 2018
3:00 p.m. – 3:30 p.m. EDT

Please join Morrison & Foerster attorneys Trevor Salter and Crystal Kaldjob as they speak on key elements of strategic partnership agreements. The speakers will discuss the benefits and drawbacks of partnerships, getting the legals right in your partnership agreements, and best practices from their experience advising major financial institutions and merchants in these transactions.

Please note this call is only open to Electronic Transactions Association members.

EVENT: ETA TRANSACT – Understanding Blockchain & Cryptocurrencies

Posted in Events

Wednesday, April 18, 2018
4:30 p.m. – 5:00 p.m.

Mandalay Bay Convention Center
3950 Las Vegas Boulevard South
Las Vegas, NV 89119

As the adoption of blockchain technology becomes a worldwide phenomenon heading towards mass adoption, it is not surprising that regulators are monitoring all market participants. Since tokens are not a homogeneous asset class – they may feature characteristics of securities, commodities, currency units, or a combination thereof, there is uncertainty and a critical need for experts to offer clear advice. Please join us at ETA TRANSACT for “Understanding Blockchain & Cryptocurrencies,” a compelling talk by Dario de Martino, Co-Chair of Morrison & Foerster LLP’s Blockchain Group, for a discussion on what market participants can do to ensure compliance with applicable laws and regulations.

Click here to register.

CFPB Issues RFI on Guidance and Implementation Support

Posted in CFPB

On March 29, 2018, the CFPB issued a Request for Information on the CFPB’s guidance and implementation support. The RFI is the tenth in a series that solicits public feedback on the Bureau’s operations and the regulations for which it is responsible. A press release accompanying the RFI states that the Bureau will be “assessing the overall effectiveness and accessibility of its guidance materials and activities” and “considering whether it would be appropriate to make changes to the formats, processes, and delivery methods for providing this guidance,” as well as the “disclaimers used on certain forms of guidance.”

Read our client alert.

CFPB Issues RFI on Inherited Regulations

Posted in CFPB

On March 26, 2018, the CFPB published a Request for Information on the CFPB’s inherited regulations and inherited rulemaking authorities. The RFI is the ninth in a series that solicits public feedback on the Bureau’s operations, and the regulations for which it is responsible. Comments on the RFI regarding inherited regulations are due by June 24, 2018.

Read our client alert.

CFPB Requests Feedback on Adopted Regulations

Posted in CFPB

On March 21, 2018, a CFPB Request for Information on the CFPB’s adopted regulations and rulemaking authorities was published in the Federal Register. This RFI is the eighth in a series that, collectively, solicits public input on the full scope of the Bureau’s operations. In this latest RFI, the CFPB seeks input on whether it should “amend those rules it has promulgated since [the Bureau’s 2011] creation or issue certain new rules.” Comments are due by June 19, 2018.

Read our client alert.

EVENT: LendIt Fintech USA 2018

Posted in Events

Tuesday, April 10, 2018
11:10 a.m. – 11:50 a.m.

Moscone West Convention Center
800 Howard St.
San Francisco, CA 94103

On April 10, Senior Counsel Oliver Ireland will moderate the “How Central is Fintech to the Central Bank? Feds Perspective on Fintech” panel at Lendit Fintech USA 2018.

Click here for more information.