Banking and Consumer Regulatory Digest

Editor's Note
The following newsletter provides a roundup summarizing enforcement actions, guidance, rulemakings, and other public statements taken by a federal and/or state financial services regulatory agency, specifically focusing on: (1) the source of the development (regulator, legislative body, etc.), (2) the subject matter (consumer lending, money transmission, capital markets, etc.), and (3) the general issue covered.

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Regulatory Developments

• Interagency (Federal). Fintech. Regulators from the FRB (Vice Chairman Barr & Director Gibson), OCC (Written Statement) and NCUA testified before a House Financial Services Subcommittee regarding their agencies' perspectives and activities towards regulation and supervision of financial institutions' use of new and emerging financial technologies.
• Federal Reserve Board. Agency Activities. FRB Gov. Bowman spoke at the Aspen Institute on building a more inclusive financial system, mentioning agency actions on small-dollar lending, supporting mission-driven organizations, and indigenous inclusion.
• Federal Deposit Insurance Corporation. Basel III. FDIC Director McKernan gave remarks at a conference on Basel III implementation, covering regulators' objectives, the potential for a phased approach, and other aspects of the Endgame proposal for increasing capital requirements for mortgage loans.
• Office of the Comptroller of the Currency. Buy Now Pay Later (BNPL). OCC published a bulletin to provide guidance to banks on managing the risks associated with BNPL lending and in offering BNPL loans in a responsible manner.
• Treasury Department. Safety and Soundness. Treasury Under Secretary for Domestic Finance spoke at a think tank regarding how Treasury with FSOC and the Office of Financial Research currently approach data collection, standardization, and risk measurement for safeguarding financial stability and recent initiatives.
• Treasury Department. Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT). Treasury Under Secretary for Terrorism and Financial Intelligence gave remarks to an AML/CFT working group meeting covering risks and vulnerabilities posed by virtual assets and virtual asset service providers, the implementation of AML/CFT frameworks to address those risks, and sanctions implementation challenges for regulators.
• Treasury Department. Combatting the Financing of Terrorism (CFT). Treasury Assistant Secretary for Terrorist Financing and Financial Crimes gave testimony to a House Financial Services Subcommittee on efforts at CFT, including the use of illicit digital assets by non-state actors.
• California Department of Financial Protection and Innovation. Digital Assets. CA DFPI provided a reminder, effective January 1, 2024, of the filing requirements for digital financial asset transaction kiosk operators in the state.

Enforcement and Litigation

• Consumer Financial Protection Bureau. Debt Collection. CFPB issued a consent order and stipulation against a debt collection firm regarding allegations that the company tried to collect unverified medical debts after consumers disputed the validity of the debts.
• Office of Foreign Assets Control. Sanctions & Cryptocurrency. OFAC announced a $1.2 million settlement with a cryptocurrency exchange to resolve liability from allegedly processing nearly 1000 transactions in violation of the agency's Russia/Ukraine sanctions.
• California Department of Financial Protection and Innovation. Commercial Financing Disclosures. CA DFPI announced that a federal court ruled in favor of the agency's motion for summary judgment in a case over the legality of the state's commercial financing disclosure regulations.

Research & Analysis

• Office of the Comptroller of the Currency. Safety and Soundness. OCC released its Semiannual Risk Perspective for Fall 2023, assessing key issues facing the federal banking system.
• Office of the Comptroller of the Currency. Agency Activity Report. OCC published its 2023 annual report providing Congress with an overview of the condition of the federal banking system, discussing the agency's strategic priorities and initiatives, and sharing the agency's financial management and condition.

Michael Buckalew is a regulatory analyst with Davis Wright Tremaine LLP.